10th Aug 2020 10:40
(Alliance News) - Yu Group PLC on Monday said it has agreed settlement terms with the London Stock Exchange PLC for its rule breaches in 2018 and announced a portfolio acquisition.
Shares in Yu were up 22% at 88.50 pence in London in morning trading.
Yu supplies gas, electricity and water to the UK business sector said the settlement terms include public censure and a GBP300,000 fine, waived in full, for its breaches of rules 10 and 31 of the AIM rules for companies between March and September of 2018.
"The events of 2018 leading up to the censure relate to the rapid expansion of the group, which had, at the time, outgrown the group's internal financial controls and reporting systems. This resulted in an inaccurate disclosure of the group's financial performance, which was identified by the new [chief financial officer] who was appointed in September 2018," Yu explained.
Since then, Yu has improved its board, procedures, and controls and has made sure these are overseen by independent non-executive directors, as well as embedding "appropriate corporate governance and financial controls" within its culture.
The fine was waived due to "the current economic uncertainty impacting the company".
These actions, Yu said, draw these matters to close with the company now taking a "forward-looking approach" and looking to scale up its business.
Separately, Yu announced it has acquired a business-to-business customer book from Bristol City Council subsidiary Bristol Energy Ltd. The buyout is expects to immediately enhance Yu's earnings.
The deal adds around another 4,000 meter points to Yu's existing meter portfolio of 9,800 for an approximately 40% increase in its current meter base. The B2B book includes a range of electricity and gas supply contracts running for as much as three years and servicing various public sector and business customers. It excludes Bristol Energy's forward commodity purchases.
Yu paid GBP1.2 million in cash on completion of the portfolio purchase and has acquired GBP1.0 million of receivables, with most due for payment to Yu in August 2020. Another GBP100,000 is payable by Yu, deferred by three months. Yu has also assumed GBP580,000 of liabilities payable August 2021.
The B2B book, in the financial year ended March 2020, showed GP15.2 million of revenue and generated a GBP480,000 operating loss.
Yu Chief Executive Bobby Kalar said: "Immediate opportunities to synergise the customer book will further our ability to extract value while keeping overheads down. Management's objective will be to transition Bristol Energy customers onto our platform quickly and seamlessly while enhancing value and creating a proven template for further value additive potential acquisitions.
"I remain convinced that there is a substantial market opportunity for Yu Group. With significant organic growth potential and a strong balance sheet, we see a great opportunity to increase market share and drive sustainable, profitable growth, creating value for all our stakeholders."
By Anna Farley; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Yu Energy