The boss of fast-growing challenger supplier Yu Group believes the Big Six “should be worried” by his company’s success, with the energy firm posting another round of robust profits and revenues in its latest half-year results.
Bobby Kalar, chief executive of the business to business supplier told City A.M. that his company was “agile” and “entrepreneurial” compared to its contenders, which were “slow to adapt” and “archaic.”
“We don’t have any legacy systems or issues in terms of growing organically like the Big Six have. They should be very worried,” he said.
While the company currently has a 1.2 per cent market share, Kalar predicts Yu Group will continue to take customers from bigger suppliers as it scale its business.
The big six energy firms in the business to business market are typically considered to be Centrica-owned British Gas, EDF Energy, EON, Npower, Scottish Power and SSE.
His confidence is based on the company’s ‘digital by default’ approach, which has enabled the company to scoop up customers at a lower financial burden compared to rivals.
It has invested in bespoke software to manage services, with the company open to utilising artificial intelligence to improve its offering in the coming years.
Kalar considered this to be the next step for “disruptive” and “transformative” digital services, and hopes the company is one of the early adopters.
“I think energy is a product, and how it is sold, distributed, measured and scaled has technology and digitialisation written all over it,” he said.
Yu Group, which is listed on the FTSE AIM All-Share, has seen its share price rise 462 per cent from 215p per share to 995p per share over the past 12 months of trading.
While other smaller suppliers collapsed in the domestic energy crisis, Yu Group flourihed – taking on energy users from Ampower, Whoop Energy, and Xcel Power Limited.
It is up 4.7 per cent this afternoon on the London Stock Exchange today after unveiling a sharp upturn in profits and revenues.
The company posted a year-on-year 51 per cent rise in revenues, rising from £129.2m to £194.9m, while pre-tax earnings climbed 62 per cent from £5.5m to £8.9m.
Yu Group has brought in a three pence per share dividend, having seen earnings per share skyrocket 480 per cent from 10p per share to 58p per share.
Kalar also lent his support to calls for further regulation of energy brokers, third party operators in the business market.
Brokers act as advisors for businesses and are contracted to help them find the best deals from energy suppliers – but their role is under increasing scrutiny amid spiralling bills.
Ofgem is currently pushing the government for more powers to regulate brokers, but is consulting on extending protections offered to micro-businesses to all businesses – so that energy bills spell out what is being paid to energy brokers.
“I share Ofgem’s concerns. There needs to be more transparency. I am a fan of creating more transparency and giving the customer every opportunity to understand and agree what they are being charged above and beyond their supply contract,” he said.