Thank Yu very much: Yu Group soars as FCA drops investigation into £10m accounting black hole
Yu Group shares jumped by more than four fifths today as the Financial Conduct Authority dropped an investigation into the energy company.
The FCA decided to take no action against Yu over an accounting error which cost the company £10m last year.
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The group’s shares increased by as much as 81 per cent today to 272.5p after the news.
The FCA said in December it may open an investigation into Yu’s books after the accounting error sent shares down by 82 per cent.
A review by DLA Piper and PwC later found that Yu had inadequate and inconsistently applied internal controls.
Shore Capital analyst Robin Speakman said the latest announcement would be “welcome news” for the under-fire company.
It comes just a day after Yu delivered its annual report for 2018, showing revenues up 77 per cent to £80.6m. However the company’s £711,000 profit from 2017 turned into a £6.2m loss, it said.
“The accounting and system failings uncovered in the second half of 2018 have had a major impact on the Group and I would personally like to apologise to all our stakeholders for the mistakes made. We have made significant progress in implementing new systems and processes and the Board is confident that we have weathered the storm,” chief executive Bobby Kalar said yesterday.
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The company said it has implemented new control, accounting and governance processes with support from PwC.
Speakman said: “With a determination of returning the group to profitability and economic rates of return, slower sales growth is guided for the current year over last year, reflecting a more disciplined approach to new business.”