Prior to publication the information communicated in this
announcement was deemed by the Company to constitute inside
information for the purposes of article 7 of the Market Abuse
Regulations (EU) No 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations No 2019/310 ('MAR').
With the publication of this announcement, this information is now
considered to be in the public domain.
23 February
2024
Yü Group
PLC
("Yü
Group" or the "Group")
Entry into transformational new Hedging
Facility with Shell Energy Europe Limited
Yü Group PLC (AIM: YU.), the independent
supplier of gas, electricity, meter asset owner and installer of
smart meters to the UK business sector, is delighted to announce
that it has (through a wholly owned subsidiary, Yü Energy Retail
Limited) entered into a new structured trading agreement
("Hedging Facility") with
Shell Energy Europe Limited ("Shell Energy") with an initial
five-year term.
Entry into the Hedging Facility represents the
conclusion of a twelve-month selection and due diligence process
and is effective immediately. The Hedging Facility replaces the
previous arrangement entered into in 2019 with
SmartestEnergy Limited ("Old
Facility").
The Old Facility enabled
Yü Group to effectively scale up and formed a
key tenet of the Group's risk management approach allowing the
business to procure gas and electricity at fixed prices to support
its growing customer base.
The unprecedented volatility in the energy
markets, and Yü Group's rapid growth, has
recently resulted in the Group exceeding its available credit under
the Old Facility resulting in the requirement for the Group to post
cash on deposit to support its hedging strategy, with £49.8m posted
as collateral at 31 December 2023.
The Hedging Facility with Shell Energy has
several significant benefits for Yü
Group. It is structured to allow access to
commodity markets to support the Group's ambitious growth agenda,
and has the potential to support further expansion opportunities
should they arise.
Further, while the Group meets its ongoing
obligations in the Hedging Facility, Yü Group will not be required
to deposit cash as collateral to support mark to market movements,
due to energy price fluctuations, as has been required under the
Old Facility. Finally, Yü Group will benefit from Shell's leading
and considerable commodity trading access to liquid commodity
markets, at market reflective prices.
The Hedging Facility fundamentally
transforms Yü Group's working capital
profile releasing cash that would previously have to be held on
balance sheet to support the Group's robust hedging policy. £52.25m
of cash previously lodged under the Old Facility has now flowed
back to Yü Group, with further material
cash benefits to be realised over the next month.
Notice of
Results
The Group will announce its results for the
year ended 31 December 2023 on 19 March 2024
Bobby Kalar,
Chief Executive Officer of Yü Group, commented:
"I'm very excited for the future of the Group
and look forward to working with Shell Energy Europe
Limited, one of Europe's largest traders of gas, power and
environmental products. This new strategically
important facility is the result of a thorough selection process
and is further validation of the strength and maturity of
Yü Group following the extensive due diligence
and stress-testing of our business model.
The new hedging facility unlocks over £50m of
cash currently posted as collateral and removes a material working
capital constraint to the business lifting exposure to mark to
market movements from future energy market fluctuations. This
provides us with substantial strategic and financial benefits,
enabling increased distributions whilst continuing to invest to
deliver our ambitious growth agenda.
I recognise it's been a very busy period for my
team and would like to thank them for their continued support. I
look forward to the future with absolute confidence."
For further
information, please contact:
|
Yü
Group PLC
Bobby Kalar
Paul Rawson
|
+44 (0) 115 975
8258
|
|
Liberum -
Nominated Adviser and
Broker
Edward Mansfield
Satbir Kler
Anake Singh
|
+44 (0) 20 3100
2000
|
|
Teneo
Giles Kernick
Tom Davies
|
+44 (0) 20 7353
4200
|
Notes to Editors
Information on the Group
Yü Group PLC is a leading challenger
supplier of gas and electricity focused on servicing the corporate
sector throughout the UK. We drive innovation through a combination
of user-friendly digital solutions and personalised, high quality
customer service. The Group plays a key role supporting businesses
in their transition to lower carbon technologies with a commitment
to providing sustainable energy solutions.
Yü Group has a clear strategy to
deliver sustainable profitable growth (in a £50bn+ addressable
market) and value for all of our stakeholders, built on strong
foundations and with a robust hedging policy. In 2023 the Group
launched Yü Smart to support growth through new opportunities in
smart metering installation.