Yu shares plunge as energy firm warns over profits

Shares in Yu Group collapsed on Wednesday as the energy firm warned that it would take a £10 million hit after uncovering accounting irregularities.

The small electricity and gas supplier said that problems with the way historic accrued income is recognised and higher-than-expected non-payments from trade debtors will push it to an annual loss.

“The group has reviewed the level of the aged accrued income for each customer account, and compared it with the amounts that have been or can be subsequently invoiced,” a spokesman said.

“The review has highlighted that a significant amount of the aged accrued income is not recoverable and requires adjustment, thereby reducing profitability in the current year.”

Shares were down more than 80% at 100p in morning trade.

In addition, Yu flagged challenging market conditions which “continue to compress the gross margins available to energy suppliers”.

Looking ahead, despite being “extremely disappointed” to reveal the profitability drop, Yu added that it expects to achieve a profit in 2019.

Chief executive Bobby Kalar said: “As founder and majority shareholder, nobody is more disappointed in this development than me.

“Our booked revenue from new sales remains strong and contracted revenue for 2019 is already £67 million 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.”