Business
Trading Statement and Accounting Review
Trading Statement and Accounting Review.
About this update from Yu Group Plc
[{"type":"text","content":"\n \nRNS Number : 9669E Yu Group PLC 24 October 2018 \n\nYü Group PLC\n(the \"Group\" or \"Company\")\n \nTrading Statement and Accounting Review \n \nYü Group PLC, the independent supplier of gas and electricity to the UK corporate sector, announces that after an internal review of the performance of the Group, the Board have identified several areas of significant concern relating to the:\n \n· Recognition of historic accrued income;\n· Impairment of Trade Debtors; and\n· Gross margins being achieved against prior expectations.\n \nThe Board estimates the combined adjustments will lead to around a £10 million reduction in profitability when compared with current market expectations, with the Company reporting a loss for the current financial year.\n \nThe Group has significant cash reserves (£11.5 million at 30 September 2018) and has no debt outstanding.\n \nAccrued Income\nIn line with normal market practices, the Group routinely invoices revenue in the first working days following the month for which the consumption of energy relates, and accrues such revenue in the balance sheet within the Accounts Receivable balance. \n \nThe Accrued Income balance in the Company's Annual Accounts is income accrued which is not invoiced shortly following the consumption month, being \"Aged Accrued Income\". Such balances totalled £4.2 million in the Annual Accounts for the year ended 31 December 2017 and £4.3 million in the Interim Results as at 30 June 2018.\n \nThe 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. 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.\n \nTrade Debtor Recoverability\nThe Board has also reviewed the level of Trade Debtors held. The Board have concluded that the level of non-payment being experienced is significantly above that which has been previously provided for. The requirement for an increase in the bad debt provision held is in addition to any provision required due to the first adoption of IFRS 9 (as disclosed in the Compa...