UK energy supplier Yu Group shares plunge 80 per cent as it warns profits will vanish on bad debt and accounting concerns
Shares in gas and electricity provider Yu Group collapsed today, plunging by as much as 80 per cent in early morning trading after a profit warning.
The energy supplier to the UK’s corporate sector told investors that profits would fall by £10m, leading to a loss for this financial year.
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Shares fell from 580p at yesterday’s close to 117p in early morning trading.
The company found several areas of “significant concern” that will hit its bottom line, including problems in how it recognises historic accrued income, higher levels of trade debt that cannot be paid back to Yu Group, and a squeeze in market conditions.
Chief executive Bobby Kalar said: "As founder and majority shareholder, nobody is more disappointed in this development than me.
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“Our booked revenue from new sales remains strong and contracted revenue for 2019 is already £67m as at the end of September 2018. We have improved internal controls around working capital management and the board is absolutely focused on restoring the profitability of the business."
Yu predicted it would not return to profitability until the end of 2019, and even then warned that its profit margin would be lower than previous expectations.