Monday 16 December 2019 2:09 pm

Yü Group shares skyrocket on energy supply deal with Smartest

Yü Group, the supplier of energy and utilities services to UK businesses, saw its share price rise by nearly 50 per cent today after it announced an energy supply arrangement with Smartest Energy.

The hedging facility with Smartest will provide Yü with a credit line up to £13m, which will grow in line with the business.

Read more: Yu Group leaks a year after accounting scandal

The firm will exclusively purchase energy from Smartest at market competitive and transparent prices to meet its customers’ requirements over a five-year term.

The new arrangement will free up cash flow for Yü as it will no longer have to post cash to support the forward purchasing of energy.

Instead the group will use the newly accessible funds to drive Yü’s growth and enhance shareholder value.

Reducing cash volatility was a priority for the company’s board in last year’s annual report.

Bobby Kalar, chief executive officer of Yü Group, commented: “This agreement means we no longer have a need to tie up our cash and instead use our position to unlock new opportunities whilst scaling our customer base.

“Our industry has seen some turbulent times recently and this strategic partnership with Marubeni’s UK subsidiary Smartest Energy supports the company as it pursues its growth ambitions.

“I am delighted that we have concluded this new arrangement to unlock a multi-million cash benefit with such a well-respected strategic partner whose ambitions are in line with ours.”

Earlier this year Yü was forced to “reset” after discovering accounting errors cost the company £10m last year.

Read more: Yu Group soars as FCA drops investigation into firm

Loss before tax more than tripled over the period to £3.25m from £895,000, even as revenues grew strongly by 70 per cent to £56.5m.

The Financial Conduct Authority opened an investigation into Yü’s accounting error, but the probe was later dropped.