Share values for business energy supplier Yu Group doubled in early trading after the company said losses for the full year 2018 would be no worse than anticipated.
The firm’s value plunged 80% in October when it notified the stock market of an accounting black hole that would lead it to post a loss. The issue related to bad debt; a higher number of customers that would not pay their bills than it had made provision for.
After a “forensic review”, the company states that the adjusted loss before tax will be between £7.35 and £7.85m.
The company said that level of loss was based on the assumption that it will not restate profits for 2017 or prior years. Should the board decide a restatement is required, the loss for full year 2018 would decrease accordingly.
Yü said group revenue for 2018 is expected to be around £89m. It currently has £85m of revenue contracted for 2019, no debt and holds £14.6m in cash.
Yü Group has also appointed RSM UK Audit LLP as new external auditors.
The firm’s share value remains a fraction of the 595p commanded before the October announcement. However and major shareholder Bobby Kalar expressed confidence in business fundamentals.
Kalar described the past three months as “challenging”. He said the company was now “more selective and prudent” in acquiring customers, but continues to secure new business at “reasonable” margin.
“With a strong balance sheet and a focussed and dedicated workforce, I remain confident in the underlying business, the significant market opportunity available to us, and the long term success of our proposition and I am absolutely driven to put us back on track,” he said.