Final results for the year ended 31 December 2025
Summary by AI BETAClose X
17 March 2026
Yü Group PLC
("Yü Group" or the "Group")
Final results for the year ended 31 December 2025
DELIVERING GROWTH AND SUSTAINABLE VALUE
Yü Group PLC (AIM; YU.), the independent supplier of gas and electricity, and meter asset owner and installer of smart meters, to the UK corporate sector announces its final audited results for the year to 31 December 2025.
The Group reports another year of increased revenue, adjusted EBITDA, earnings per share, cash generation and forward contracted customer book. The Board announces significant investment to support the launch of a new three-year plan to double the market share and revenues of the Company. The investment of an incremental c.£9m will be entirely self-funded from existing cash generation, tempering profit growth in 2026.
Financial & operational highlights
|
31 December |
2025 |
2024 |
Change |
|
£'m unless stated |
|
|
|
|
|
|
|
|
|
Financial: |
|
|
|
|
Revenue |
700 |
646 |
+8% |
|
Adjusted EBITDA1 |
51 |
49 |
+4% |
|
Profit before tax |
49 |
45 |
+9% |
|
Earnings per share: |
|
|
|
|
Adjusted, fully diluted |
216p |
210p |
+6p |
|
Statutory, basic |
214p |
200p |
+14p |
|
Dividend per share (interim & final) |
67p |
60p |
+7p |
|
Operating cash inflow |
36 |
72 |
-36 |
|
Cash |
106 |
85 |
+21 |
|
Overdue customer receivables (days)2 |
4 |
3 |
+1 day |
|
|
|
|
|
|
Operational: |
|
|
|
|
Meter points supplied (#'k) |
131 |
88 |
+49% |
|
Equivalent volume of energy supplied |
2.5 TWh |
2.2 TWh |
+14% |
|
Market share3 |
3.5% |
2.7% |
+0.8% |
|
Average monthly bookings |
46 |
43 |
+7% |
|
Contracted revenue: |
|
|
|
|
For next FY |
668 |
566 |
+18% |
|
In aggregate |
1.4bn |
1.0bn |
+40% |
|
Trustpilot score (#) |
3.9 |
4.2 |
-0.3 |
|
Smart meter: |
|
|
|
|
Installations in year (#'k) |
16.4 |
22.9 |
-6.5 |
|
Index-linked annualised recurring revenue from asset ownership ("ILARR") |
2.2 |
1.3 |
+0.9 |
Financial performance
· Revenue of £700m, up 8% in year (2024: £646m), with organic meter point growth of 49% to 131k (2024: 88k) and equivalent volume of energy supplied growth of 14% to 2.5 TWh (2024: 2.2 TWh).
· Adjusted EBITDA¹ at £51m (2024: £49m), with a normalising gross margin of 14.3% (2024: 14.5%), highly effective customer collection rates despite declining economic conditions and continuing leverage of operational overheads through Digital by Default.
· Profit before tax increased 9% to £49m (2024: £45m).
· Cash balance of £106m at 31 December 2025 (2024: £85m).
· Smart meter rollout continues to deliver benefits to the Group with a long-term index-linked annuity income ("ILARR"), of £2.2m at 31 December 2025 (2024: £1.3m).
· Adjusted earnings per share, fully diluted, increased to 216p (2024: 210p).
· Final recommended dividend of 45p per share (2024: 41p), providing a total 2025 dividend of 67p per share (2024: 60p) and continuing our progressive dividend policy whilst retaining cover of >3.0x on adjusted diluted EPS.
Operational delivery
· The Group has delivered record-breaking meter growth, delivering 43k net additions (2024: 35k) and growing market share to 3.5% (2024: 2.7%). Market opportunity remains with 3.6m meter points and a £50bn B2B addressable market.
· Yü Group continues to significantly over-index in acquisition of available switchers, acquiring 11% of market switchers in the B2B market in 2025 (2024: 7%).
· Yü Smart has had a transformational year, with significant investment in systems and processes as well as engineer training through our technical training and development centre to streamline the meter install process and deliver a seamless customer experience.
· During 2025, the Group entered a new strategic partnership with HSBC to provide banking arrangements to the Group, offering enhanced capabilities and commercial terms, as well as a clear route to flexible competitive financing arrangements where required.
· Yü Energy was recognised for a third year in a row in the Sunday Times Top 100 Places to Work.
Current trading and outlook
· Strong momentum from 2025 has continued into 2026 with record revenue, EBITDA and record cash balance in Q1, despite market uncertainty.
· Strong contract book as we enter 2026. £668m contracted revenue at end of 2025 for 2026 delivery, with commodity prices expected to fluctuate dependent on geopolitical and macroeconomic factors with some planned growth in non-commodity prices as a result of UK policy. Total contract book of £1.4bn (2024: £1.0bn).
· 2026 kicks off the three-year plan to deliver at least 7% market share, with a self-funded incremental £9m+ planned opex investment to grasp the market opportunity planned in year.
· Management targets growth in 2026:
o Over 175k meter points under contract and over 60k smart meter assets owned.
o Contract book growth to over £1.75bn by 31 December 2026.
o Revenue to be in a range of £850m - £875m.
o Adjusted EBITDA and PBT in line with 2025, with growth of underlying profitability tempered by overhead investment to support future growth opportunity.
o Cash expected to decline marginally due to early ROC payment and further investment in sales acquisition costs.
· Progressive dividend policy expected to remain, trending towards the 3x dividend cover on adjusted diluted EPS.
Bobby Kalar, Chief Executive Officer, stated:
"2025 has been another successful year with growth in revenues, profits and cash whilst being disciplined in our approach. The market opportunity remains substantial for Yü Group and we are focussed on continuing to scale in the markets we serve as a customer-centric business with a growth-minded challenger ethos.
As commodity markets normalised during 2025, we continued to expand our market share growing our meter base by 49% to supply 131,00 meters at year end. This could not have been achieved without the hard work and dedication of our staff. Our ambitious and entrepreneurial DNA are key to the success of the group where we encourage and empower our employees. I am delighted that his been recognised again by The Sunday Times "Best Places to Work" list.
In 2024 Yü Group secured a transformational hedging facility with Shell Energy Limited, we have continued to build out this relationship and in 2025 we were delighted to secure the services of HSBC as our preferred corporate banking partner. This marked a further milestone to support our ambitions to become the largest and fastest-growing independent energy supplier in the UK. We are now commencing an ambitious three-year plan to double our current market share.
Our strong cash generation will finance the investment required to deliver against these goals whilst also enabling us to support our progressive dividend policy as we seek to deliver even better shareholder returns."
Analyst presentation and publication of annual report
An analyst presentation will be held at the offices of Osbourne Clark, One London Wall, London EC2Y 5EB at 9am today.
An electronic version of the full annual report will be published on the Group's website, www.yugroupplc.com, later today (17 March 2026).
1 Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, non-recurring costs and share based payments. See reconciliation in note 7 to the financial statements below.
2 Overdue customer receivables is expressed in days of sales, and relates to the total balance, net of provisions, of accrued income which is outside of the normal billing cycle, plus overdue trade receivables (net of VAT and CCL).
3 Analysis based on Cornwall Insight market share report, October 2025.
For further information, please contact:
|
Yü Group PLC Bobby Kalar Andy Simpson
|
+44 (0) 115 975 8258 |
|
Panmure Liberum Bidhi Bhoma Edward Mansfield Satbir Kler Gaya Bhatt |
+44 (0) 20 3100 2000 |
Notes to editors
Information on the Group
Yü Group PLC is a leading 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. The Group has achieved a compound annual growth rate of c.47% over the last five years and has significantly improved margin and profitability performance. In 2023 the Group launched Yü Smart to support growth through new opportunities in smart metering installation, including through the ownership of smart meter assets to generate a recurring index-linked annuity income over a 15+year period.
Chairman's Statement
CONSISTENT DELIVERY SUPPORTING SUSTAINABLE VALUE
A seasoned and committed team sharing the determination to scale organic growth within a framework of robust corporate governance and effective risk management.
Dear Shareholders,
It is my pleasure to again report success to you in the meeting of our targeted financial and operational results.
The new performance records achieved this year evidence the ongoing roll out of ambitious strategic initiatives devised, and now being delivered upon, by our teams.
As we continue to scale in the markets we serve, customer-centric innovation and a growth-minded challenger ethos remain the core traits of Yü Group.
Our approach is designed to make robust and intelligent corporate governance a guarantor of long-term value and an engine of growth in pursuit of the Group's high organic growth objectives.
Significant and ambitious short, medium and long-term growth plans are well developed, and I have great confidence in the teams' abilities to break further records, across a broad range of key metrics, under the energetic and vigilant leadership of our Chief Executive Officer, the indomitable Bobby Kalar.
The Group continues to scale at pace. Revenue increased to £700m (2024: £646m) and was delivered via organic growth despite the effects of lower commodity markets.
Our UK market share is now 3.5%, up from 2.7% in 2024, and our forward contract book increased 40% to £1.4bn (2024: £1.0bn).
Profit before tax increased 9% to £49m (2024: £45m) while earnings per share (on a statutory reported basis) grew to 214p (2024: 200p).
Our cash increased to £106m (2024: £85m), and we have increased dividends per share by 12% to 67p (2024: 60p).
Board composition, evolution and succession planning
During 2025, our succession plan for the role of Chief Financial Officer was implemented. Andy Simpson, after an induction and hand-over period which began in February 2025, was welcomed to the Board in September. Andy brings with him deep experience in the financial management of fast-scaling B2B businesses and is delivering significant added value as a valuable member of our executive management team.
Concomitantly and as planned, Paul Rawson was appointed to the role of non-executive director, thereby enabling the Group to continue to benefit from his clarity of insight and his deep experience. Paul also continues to serve as Board and Company Secretary.
Two independent non-executive directors, John Glasgow and Tony Perkins, raised their intention in 2025, after a suitable transitional period, to retire from the Group during the course of 2026.
Over the previous decade and since the Group was listed in 2016, John Glasgow has made a truly invaluable contribution, through thick and thin, to getting the Group to where it is today. Tony Perkins has contributed to a significant and positive evolutionary development of the Group's audit and risk management over the past six years. I wish them both all the best for the future and sincerely thank them for the exceptionally fine work that they have done in furthering the Group's success. Our succession and selection plans will ensure that incoming Directors bring key evolutionary skills and depth of experience to the Board.
The executive management and wider senior leadership teams have continued to grow in number, in depth, and in maturity of experience. They continue to deliver controlled yet significant growth as the Group enthusiastically builds out new capabilities.
I am proud to note the exemplary and continued evolution of the Group's management team: its strength in depth is one of our key strategic enablers.
Delivering for our shareholders and stakeholders
Your Company has again been recognised by The Sunday Times "Best Places to Work" list, and the Group's ethos and pace of growth continues to allow us to attract first-rate talent into our ranks. Navaz Dean, our HR Director, continues to make a notable contribution to our ongoing success and to maintaining and developing the foundations of future success, viz; our people.
Our shareholders now include a greater number of institutional investors with increasing levels of holdings. We continue to maintain our stakeholder engagement programme, which is carefully designed to benefit existing, future and long-term shareholders.
Summary
Your Board will continue to ensure an appropriate environment within which to deliver growth and innovation whilst maintaining high standards of governance and risk management.
I look forward to the Group continuing to break this year's newly set records as the benefits from various strategic plans and innovative projects flow through to an increase in your company's value.
Robin Paynter Bryant
Chairman
Chief Executive Officer's Statement
DELIVERING GROWTH AND SUSTAINABLE VALUE
A new record performance for the Group as we continue to take market share.
I am pleased to report another year of strong growth and profitability. This marks our fifth consecutive year of profitable growth, reinforcing my confidence that our strategy continues to deliver value to our growing investor base.
Yü Energy
Our gas and electricity supply business has performed strongly, delivering year on year organic meter point growth of 49% and combined volume growth ("EQVS") of 14%, increasing our market share to 3.5%.
Whilst I'm pleased with our full year performance and confident in the strength and predictability of our forward-facing business model, supported by our Digital by Default strategy, I believe we can grow even faster and deliver even better shareholder returns. To this end, my team and I have secured a Board-approved mandate to invest a further £9m to deliver our next three year business plan.
I have been clear in my ambition to significantly scale the Group and showcase the business as a standout success story. Achieving our stated target of 7% market share is firmly within our control. In 2025 alone, we successfully contracted 11% of all market switching activity. Additional routes to market are now in motion with increased technology integration across the business, I believe 7% represents a prudent and achievable target. Further validation of this trajectory comes from the recent independent leading consultancy for the industry, The Cornwall Report, which confirms that Yü Energy is the fastest-growing B2B supplier in the UK.
It is important to recognise that the demand for supplying and distributing business gas and electricity to the end user will not diminish with the introduction of technology or predatory pricing but instead will become more competitive. Suppliers who are not agile or entrepreneurial will over the course of the next few years struggle to maintain market share as underinvestment and creaking systems begin to take their toll. While our focus remains to "stick to our knitting" through strategic and sustainable organic growth, we remain wide awake and attentive for book purchasing opportunities.
Yü Smart and meter ownership
Our Smart business, which primarily focuses on the installation and maintenance of smart meters to help customers better manage their energy usage and payment behaviour, continues to complement our supply business. That said, I am disappointed that we did not meet our installation targets this year.
During the year, we implemented automated booking and engineering scheduling capabilities to support future demand. However, we were slow to adapt to these changes, and the transition from manual spreadsheets to automation created temporary delays. We also underestimated the level of resourcing required to support the increasing installation demand generated by our retail business.
I am confident that these short-term growing pains are now behind us and that we are well positioned to deliver our 2026 installation targets.
Growing strategic partnerships
I'm pleased to welcome HSBC as the Group's preferred corporate banking partner, following a significant and robust RFI tender process involving a number of top-tier corporate finance institutions.
HSBC has demonstrated a particularly strong appetite for, and understanding of, our business operations and is well aligned with the Group's corporate banking requirements as we pursue our ambition to become the largest and fastest-growing independent energy supplier in the UK.
Additionally, our partnership with Shell Energy remains strong. Our significant volume growth over the past few years has been applauded by Shell and corroborates our strong alignment for market growth within our respective businesses. Our collaborative alliance and strong working relationship will continue to bear fruit.
It should also be noted that a significant factor in selecting the counterparty that best aligned with and supported our needs did not hinder our growth. We will not again be beholden to, or have our strategy dictated by, trading or banking counterparties who are not aligned with the Group's interests.
Three year business plan
As Chief Executive of this exceptional business, I have carefully reflected on the Group's long-term trajectory, the pace of growth we can responsibly achieve, and the sustainable value that growth can create for our shareholders, customers and communities.
Being mindful that over the past five years we have delivered a consistent, disciplined performance. Our focus on operational excellence, service quality, prudent financial management and robust risk controls have positioned the Group as a reliable, predictive operator and a value creating investment for long-term shareholders. Importantly, this growth has been underpinned by strong governance and a clear commitment to regulatory compliance. Whilst my team has remained rightly focused on delivering cyclical results, we have also been preparing deliberately for the next phase of our growth. Behind the scenes, we have strengthened our operational capabilities, enhanced systems resilience, invested in leadership capacity and refined our capital allocation framework, positioning us in 2026 to further invest in additional value creating opportunities.
Our three year business plan, SS2B, maintains the same disciplined approach that has characterised our success to date. We will continue to prioritise high standards of service, operational efficiency, prudent debt management and strict adherence to trading and risk mandates.
SS2B, reflects a step-change in our ambition. I am confident in our ability to deliver against our three year business plan and take advantage of the opportunity to expand our market presence within the UK.
Our approach to capital allocation will remain disciplined, with all projects self-funded via in-year earnings. We will prioritise projects that enhance resilience, improve efficiency, strengthen the long-term value of our asset base and underpin a stable and predictable earnings profile.
This approach enables sustainable cash generation and prudent leverage to support reinvestment in sales and technology, maintain a robust balance sheet, strengthening liquidity, and deliver attractive long-term shareholder returns. Sustainable growth is not a separate initiative, it's embedded within our operating model and long-term planning.
Our business has been built for durability. The investments we are making this year are designed to enhance resilience, scale and sustainability over the coming years, not simply reporting cycles. With strong foundations, disciplined execution and a clear strategic roadmap, we are confident in our ability to deliver consistent performance, and long-term value for all stakeholders. Central to our medium-term success is the Group's ability to pivot towards value creating opportunities and while we have achieved success domestically, I am pleased to have established a subsidiary 'hub of talent' and office presence in the UAE.
Our UAE office represents an exciting new opportunity for us to deliver operational improvements and efficiencies through the development of robotic technology and AI automation that will accelerate our growth ambitions while positioning ourselves as the tech outlier and disruptor in the B2B energy space.
I am personally leading this strategy and, as such, I am spending more time in the UAE supported by my fantastic UK team, and I look forward to updating you on progress in due course.
We have made a great start to 2026, and with a strong forward‑contracted order book already locked in and a focused and capable workforce to help deliver the full year targets, I am confident the Group will enjoy continued growth in our key performance indicators, and I look forward to the year ahead with confidence.
Summary
Finally, it takes a special kind of individual to thrive in a fast-paced, entrepreneurial environment with high expectations and slim margins for error. I am proud to lead an entire workforce of such people, all of whom are dedicated to my quest and ambition for this Group. To my team, thank you for your extraordinary efforts in helping the business achieve its 2025 targets.
Bobby Kalar
Chief Executive Officer
Finance Review
STRONG AND SUSTAINABLE EARNINGS ALONGSIDE SIGNIFICANT GROWTH
Providing sustainable, profitable growth, with strong momentum into 2026.
In overview
· Revenue increased 8% to £700m (2024: £646m)
· Adjusted EBITDA increased 4% to £51m (2024: £49m)
· Profit before tax increased 9% to £49m (2024: £45m)
· Net cash inflow of £21m (2024: £53m, including one-off £50m return of cash collateral)
· Closing cash of £106m, representing 631p per share (2024: 508p)
· Adjusted fully diluted EPS of 216p, up 3% (2024: 210p)
· Delivering on progressive dividend policy, with return increased by 12%
· Final dividend of 45p per share recommended, following 22p interim payment
· Forward contracted revenue of £1.4bn (2024: £1.0bn)
· Investment in smart meters providing ILARR3 of £2.2m (2024: £1.3m)
|
Financial metrics |
|
|
|
|
£'m unless stated (* % of revenue) |
2025 |
2024 |
Change |
|
Revenue |
700.4 |
645.5 |
+8.5% |
|
Gross margin* % |
14.3% |
14.5% |
-0.2% |
|
Net customer contribution1* % |
11.7% |
12.5% |
-0.8% |
|
General overheads* % |
(4.4%) |
(4.9%) |
+0.5% |
|
Adjusted EBITDA* % |
7.2% |
7.6% |
-0.4% |
|
Adjusted EBITDA2 |
50.6 |
48.8 |
+1.8 |
|
Profit before tax |
48.7 |
44.5 |
+4.2 |
|
Net cash flow |
20.7 |
52.7 |
-32.0 |
|
Cash |
105.9 |
85.2 |
+20.7 |
|
Earnings per share (adjusted, fully diluted) |
216p |
210p |
+6p |
|
Dividend per share (interim and final) |
67p |
60p |
+7p |
|
Other metrics |
|
|
|
|
£'m unless stated |
2025 |
2024 |
Change |
|
One year forward contracted revenue4 |
668 |
566 |
+18% |
|
Aggregate contracted revenue4 |
1.4bn |
1.0bn |
+40% |
|
Equivalent volume of energy supplied5 |
2.5 TWh |
2.2 TWh |
+14% |
|
Smart meter assets, ILARR3 |
2.2 |
1.3 |
+0.9 |
|
Overdue customer receivables6 |
4 days |
3 days |
+1 day |
Results summary
I am pleased to report the Group has continued to deliver sustained profitable growth, as well as significant growth in both market share and cash generation. The energy market had continued to normalise through 2025 after significant market turmoil over the previous five years, with the Group delivering ongoing revenue growth despite declining market prices. Recent global events have created renewed uncertainty to commodity prices. Continued growth in EPS and cash generation, the dividend for 2025 of 67p (including a 45p recommended final dividend) per share is up 12% from 2024.
Delivering organic volume and meter growth
Revenue of £700m (2024: £646m) is an increase of 8%, with revenue achieving a compound annual growth rate ("CAGR") of 47% since 2020.
Meter points contracted grew by 49% to 131k at the end of 2025, with the average number of meter points supplied during the year up 29%. Average consumption per meter fell by 12% during 2025 from 31.2 MWh ("megawatt hours") to 27.6 MWh, as a result of which EQVS to customers increased by 14% to 2.5 TWh. Revenue per MWh of EQVS has decreased 6% from £292 in 2024 to £275 in 2025 as a result of lower global commodity prices.
The Group's forward contract book provides ongoing visibility and security of future revenues which underpin 2026 and 2027 revenues. As the energy market normalised, customer demand for increased contract length is growing with 8% growth from 2024, increasing certainty but reducing the annualised bookings with reduced customer renewal opportunities as they hold longer contracts. The aggregate contract book grew 40% to £1.4bn of secured future revenue, of which £668m will be delivered in 2026.
We have seen H2 2025 bookings and forward contracted revenue converging at a price around 5% below that delivered in 2025, demonstrating that the historical high prices have now largely washed through. Based on current market conditions, it is expected that commodity prices will fluctuate dependent on geopolitical and macroeconomic factors with some planned growth in non-commodity prices as a result of UK government policy.
Sustainable profitability as we scale
Adjusted EBITDA has increased by 4%, with net profit increasing by 7%. This has led to growth in earnings per share of 7% on a basic, reported basis and 3% (to 216p) on an adjusted, diluted basis.
Profitability met management expectations, with adjusted EBITDA of £51m (2024: £49m), representing a 7.2% margin (2024: 7.6%); and 7.0% profit before tax margin (2024: 6.9%).
Gross margin decreased, as expected, to 14.3% (2024: 14.5%) as industry and commodity costs continued to stabilise with resultant less volatile commodity prices increasing competition and therefore squeezing margins. Gross margin on the over £1.4bn of contracted revenue continues to be underpinned by the Group's closely managed commodity hedging strategy, which locks in contract margin on signing of new contracts.
With changes to National Insurance and ongoing economic uncertainty, we have taken a cautious view of the bad debt charge, increasing from 2.1% of revenue in 2024 to 2.6% in 2025. While the bad debt percentage has increased for the Group as a result of the impact of wider market challenges on our customers, we remain confident that our internal approaches and strategies continue to mitigate the risk and help deliver the right customer outcome.
General overheads decreased to 4.4% of revenue (2024: 4.9%) from the leverage benefit of the Group's digital strategy, with cost to serve, systems and certain fixed costs not increasing with revenue growth as tight control of costs ensures the business scales appropriately.
|
Adjusted EBITDA reconciliation |
|
|
|
£'m |
2025 |
2024 |
|
Adjusted EBITDA |
50.6 |
48.8 |
|
% of revenue |
7.2% |
7.6% |
|
Adjusted items: |
|
|
|
Non-recurring operational costs |
(0.6) |
(1.4) |
|
Share-based payment charges |
(2.1) |
(4.0) |
|
Depreciation and amortisation |
(2.9) |
(2.5) |
|
Statutory operating profit |
45.0 |
40.9 |
|
Net finance income |
3.7 |
3.6 |
|
Profit before tax |
48.7 |
44.5 |
As further disclosed in note 7 of the financial statements, adjusted EBITDA provides management with a profitability measure based on business trading performance. It excludes £0.6m of costs that have been incurred by the Group diversifying and investing into operations that are outside of the normal course of business and therefore excluded from adjusted EBITDA.
Adjusted EBITDA also excludes £2.1m (2024: £4.0m) of share-based payment charges as they are not related to business operational trading which provides clearer views of operating cash generation in the year.
Net finance income remained relatively flat at £3.7m (2024: £3.6m) with the improvement in the Group's cash balance offset by the reducing Bank of England base rate. Profit before tax increased £4m to £49m (2024: £45m).
Increasing cash, whilst investing for future returns
Cash has continued to grow, increasing from £85m to £106m. This significant cash generation, supported via the commodity arrangement with Shell, allows for strategic investments to unlock additional value without any requirement for additional debt, whilst increasing shareholder distribution.
Movement in cash
|
Cash flow £'m |
2025 |
2024 |
|
Adjusted EBITDA |
50.6 |
48.8 |
|
Commodity trading cash collateral |
- |
49.8 |
|
Early payment of industry ROC liability |
- |
(9.0) |
|
ROC liability movement |
17.4 |
13.5 |
|
Customer acquisition costs |
(19.1) |
(12.3) |
|
Corporation tax payments |
(11.1) |
(11.3) |
|
Other working capital movement |
(1.5) |
(7.4) |
|
Operating cash flow |
36.3 |
72.1 |
|
Investment in smart meter assets |
(3.3) |
(4.5) |
|
Other investing activities |
(5.5) |
(5.2) |
|
Share buy-back |
- |
(4.0) |
|
Dividends paid |
(10.6) |
(9.4) |
|
Other financing activities |
3.8 |
3.7 |
|
Net cash movement in year |
20.7 |
52.7 |
|
Closing cash balance |
105.9 |
85.2 |
|
Opening cash balance |
85.2 |
32.5 |
Corporation tax payments totalled £11m (2024: £11m), with tax losses now utilised.
In total, operating cash flow of £36m (2024: £72m) provides a continued strong base despite significant investments in operating costs to drive growth and/or margin improvement.
Net current assets increased by £14m to £60m (2024: £46m), reflecting the strength of the Group's cash position and balance sheet.
The Group continues to drive its investment in smart meter activities, with £3.3m capital investment (2024: £4.5m). In addition to the clear customer benefits of smart meters, they also provide the Group with increased hedging and customer outcome benefits, as well as an index-linked annuity income stream. The Group exited 2025 with an ILARR of £2.2m (2024: £1.3m), providing a growing impact on forward EBITDA secured by a long-term capital-based return. The Group continues to plan additional investment going forward and is expected to significantly increase this income stream.
The cash balance of £106m (2024: £85m) includes £74m of future liabilities (2024: £55m); annual ROC liability payment of £53m (2024: £35m) payable in August 2026 and quarterly HMRC liabilities of £21m (2024: £20m).
The Group's Capital Allocation Strategy remains strong, with our focus remaining to use our earnings to continue funding customer acquisition, smart meters and system investment, as well as targeted investments to support the long-term Digital by Default strategy and deliver improved products and services to our customers. We continue to deliver a progressive dividend strategy whilst funding ongoing organic growth.
Other financing activities include repayments of certain lease obligations in respect of vehicles together with interest on borrowings wholly secured on the investment in smart meters. The Group entered into an additional £10m loan facility agreement in June 2025, in addition to an existing £5.2m facility agreed during 2023 with Siemens Finance in relation to the finance of such meters.
Increased shareholder distributions and progressive dividend policy
The Group's cash performance enabled continued growth in dividend payments, the total awarded rising by 13% to £10.6m (2024: £9.4m).
An interim dividend of 22p (2024: 19p) per share is to be supplemented by a final recommended dividend of 45p (2024: 41p) per share. The Group has previously announced a progressive dividend policy, increasing returns with expected EPS growth, and maintaining dividend cover at 3x over the short to medium term.
The final recommended dividend of 45p per share is payable on 18 June 2026. The shares will go ex-dividend on 28 May 2026, and the record date is 29 May 2026.
Summary: continued financial progression
In summary, the Board is very pleased with the continued delivery of sustained operational and financial growth, cash generation and again being the fastest growing B2B supplier in the UK. We have increased our market share to 3.5% and contract book by 40%, as we continue to deliver upon our Digital by Default strategy and take market share from the Big 6 providers. The scale of opportunity to the Group remains both exciting and deliverable. With the foundations in place, the Board has agreed a new three year plan which will see a step-change in our ambition to accelerate our growth to more than double our market share and continue to deliver shareholder value.
As the Group continues to grow, our partners' support has grown with us. Shell continues to provide a highly supportive commodity hedging agreement. We have also invested in our banking arrangements in 2025, establishing a strategic relationship with HSBC to support our growth plans as needed through our next three year plan. It is pleasing to see the ongoing support and commitment of our strategic partners.
The introduction of market-wide half hourly settlement combined with the consultation from Ofgem to universally implement smart-contingency contracts from 2027 underpins our investment and strategy in Yü Smart. Meter ownership continues to provide a beneficial investment case with a valuable 15+ year annuity income stream, already at £2.2m at the end of 2025. The ongoing relationship with Siemens Finance, which was increased by £10m in 2025, continues to support this growth.
The development of smart meters provides material benefits in risk management and optimisation in our supply business, alongside customer benefits.
Dividends and shareholder distributions have continued to increase year on year to £10.6m (2024: £9.4m), enabled by strong cash generation. The Board is confident that the stated progressive dividend policy and strong positioning of the Group provide substantial onward potential for dividend and distribution growth in 2026 and beyond.
Andy Simpson
Chief Financial Officer
1. Net customer contribution represents gross margin less bad debt.
2. Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, non-recurring operating costs and share-based payment. See reconciliation in note 7 to the financial statements below.
3. ILARR: Index-linked, annualised recurring revenue, estimated from investment in smart meters.
4. The estimated revenue value from agreed contracts with customers.
5. Equivalent volume of energy supplied ("EQVS") based on electricity volume equivalent where 1 MWh of electricity is worth approximately 4 times a MWh of gas (in revenue terms) as per Ofgem analysis.
6. Overdue customer receivables is expressed in days of sales, and relates to the total balance, net of provisions, of accrued income which is outside of the normal billing cycle, plus overdue trade receivables (net of VAT and CCL).
Consolidated statement of profit and loss and other comprehensive income
For the year ended 31 December 2025
|
|
|
Notes |
31 December 2025 £'m |
31 December 2024 £'m |
|
|
|
Revenue |
|
700.4 |
645.5 |
|
|
|
Cost of sales |
|
(600.3) |
(551.6) |
|
|
|
Gross profit |
|
100.1 |
93.9 |
|
|
|
Operating costs before non-recurring items and share-based payment charges |
|
(34.0) |
(34.1) |
|
|
|
Operating costs - non-recurring items |
7 |
(0.6) |
(1.4) |
|
|
|
Operating costs - share-based payment charges |
25 |
(2.1) |
(4.0) |
|
|
|
Total operating costs |
|
(36.7) |
(39.5) |
|
|
|
Net impairment losses on financial and contract assets |
19 |
(18.4) |
(13.5) |
|
|
|
Operating profit |
4 |
45.0 |
40.9 |
|
|
|
Finance income |
5 |
4.3 |
4.2 |
|
|
|
Finance costs |
5 |
(0.6) |
(0.6) |
|
|
|
Profit before tax |
|
48.7 |
44.5 |
|
|
|
Taxation |
9 |
(12.8) |
(11.0) |
|
|
|
Profit and total comprehensive income for the year |
|
35.9 |
33.5 |
|
|
|
Earnings per share |
|
|
|
|
|
|
Basic |
8 |
214p |
200p |
|
|
|
Diluted |
8 |
201p |
187p |
|
Consolidated balance sheet
At 31 December 2025
|
|
|
|
|
Notes |
31 December 2025 £'m |
31 December 2024 £'m |
|
ASSETS |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
Goodwill |
|
|
|
12 |
2.0 |
0.2 |
|
Intangible assets |
|
|
|
13 |
5.8 |
2.8 |
|
Property, plant and equipment |
|
|
|
14 |
15.8 |
12.3 |
|
Right-of-use assets |
|
|
|
15 |
1.0 |
1.8 |
|
Deferred tax assets |
|
|
|
17 |
1.8 |
2.8 |
|
Trade and other receivables |
|
|
|
19 |
24.5 |
11.8 |
|
Investment in subsidiaries |
|
|
|
16 |
- |
- |
|
|
|
|
|
|
50.9 |
31.7 |
|
Current assets |
|
|
|
|
|
|
|
Inventory |
|
|
|
18 |
0.4 |
0.4 |
|
Trade and other receivables |
|
|
|
19 |
117.7 |
97.1 |
|
Cash and cash equivalents |
|
|
|
20 |
105.9 |
85.2 |
|
|
|
|
|
|
224.0 |
182.7 |
|
Total assets |
|
|
|
|
274.9 |
214.4 |
|
LIABILITIES |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Trade and other payables |
|
|
|
21 |
(160.7) |
(133.7) |
|
Corporation tax payable |
|
|
|
9 |
(3.0) |
(2.5) |
|
Borrowings |
|
|
|
22 |
(0.5) |
(0.2) |
|
|
|
|
|
|
(164.2) |
(136.4) |
|
Non-current liabilities |
|
|
|
|
|
|
|
Trade and other payables |
|
|
|
21 |
(3.1) |
(2.9) |
|
Borrowings |
|
|
|
22 |
(9.8) |
(4.8) |
|
|
|
|
|
|
(12.9) |
(7.7) |
|
Total liabilities |
|
|
|
|
(177.1) |
(144.1) |
|
Net assets |
|
|
|
|
97.8 |
70.3 |
|
EQUITY |
|
|
|
|
|
|
|
Share capital |
|
|
|
24 |
0.1 |
0.1 |
|
Share premium |
|
|
|
24 |
- |
- |
|
Merger reserve |
|
|
|
24 |
- |
- |
|
Retained earnings |
|
|
|
24 |
97.7 |
70.2 |
|
|
|
|
|
|
97.8 |
70.3 |
|
|
|
|
|
|
|
|
Consolidated statement of changes in equity
For the year ended 31 December 2025
|
|
Share capital £'m |
Share premium £'m |
Merger reserve £'m |
Retained earnings £'m |
Total £'m |
|
Balance at 1 January 2025 |
0.1 |
- |
- |
70.2 |
70.3 |
|
Total comprehensive income for the year |
|
|
|
|
|
|
Profit for the year and other comprehensive income |
- |
- |
- |
35.9 |
35.9 |
|
|
- |
- |
- |
35.9 |
35.9 |
|
Transactions with owners of the Company |
|
|
|
|
|
|
Contributions and distributions |
|
|
|
|
|
|
Equity-settled share-based payments |
- |
- |
- |
1.9 |
1.9 |
|
Deferred tax on share-based payments |
- |
- |
- |
0.3 |
0.3 |
|
Equity dividends paid in the year |
- |
- |
- |
(10.6) |
(10.6) |
|
Total transactions with owners of the Company |
- |
- |
- |
(8.4) |
(8.4) |
|
Balance at 31 December 2025 |
0.1 |
- |
- |
97.7 |
97.8 |
|
Balance at 1 January 2024 |
0.1 |
11.9 |
(0.1) |
34.9 |
46.8 |
|
Total comprehensive income for the year |
|
|
|
|
|
|
Profit for the year and other comprehensive income |
- |
- |
- |
33.5 |
33.5 |
|
|
- |
- |
- |
33.5 |
33.5 |
|
Transactions with owners of the Company |
|
|
|
|
|
|
Contributions and distributions |
|
|
|
|
|
|
Equity-settled share-based payments |
- |
- |
- |
0.9 |
0.9 |
|
Deferred tax on share-based payments |
- |
- |
- |
2.0 |
2.0 |
|
Proceeds from share issues |
- |
0.4 |
- |
- |
0.4 |
|
Buy-back of shares |
- |
- |
- |
(4.0) |
(4.0) |
|
Share premium cancellation |
- |
(12.3) |
- |
12.3 |
- |
|
Transfer from reserve |
- |
- |
0.1 |
- |
0.1 |
|
Equity dividends paid in the year |
- |
- |
- |
(9.4) |
(9.4) |
|
Total transactions with owners of the Company |
- |
(11.9) |
0.1 |
1.8 |
(10.0) |
|
Balance at 31 December 2024 |
0.1 |
- |
- |
70.2 |
70.3 |
|
|
|
|
|
|
|
Consolidated statement of cash flows
For the year ended 31 December 2025
|
|
31 December 2025 £'m |
31 December 2024 £'m |
|
Cash flows from operating activities |
|
|
|
Profit for the financial year |
35.9 |
33.5 |
|
Adjustments for: |
|
|
|
Depreciation of property, plant and equipment |
1.0 |
0.7 |
|
Depreciation of right-of-use assets |
0.8 |
1.0 |
|
Amortisation of intangible assets |
1.1 |
0.8 |
|
Decrease in inventory |
- |
0.2 |
|
Increase in trade and other receivables |
(14.4) |
(11.2) |
|
Increase in customer acquisition costs |
(19.1) |
(12.3) |
|
Decrease / (increase) in industry related deposits |
0.6 |
(2.6) |
|
Decrease in cash collateral for commodity trading arrangements |
- |
49.8 |
|
Increase / (decrease) in trade and other payables |
8.8 |
(4.9) |
|
Increase in renewable obligation liability |
17.4 |
13.5 |
|
National Insurance on share options exercised |
- |
(0.6) |
|
Finance income |
(4.3) |
(4.2) |
|
Interest received |
4.1 |
4.1 |
|
Finance costs |
0.6 |
0.6 |
|
Taxation charge |
12.8 |
11.0 |
|
Corporation tax paid |
(11.1) |
(11.3) |
|
Share-based payment charge |
2.1 |
4.0 |
|
Net cash from operating activities |
36.3 |
72.1 |
|
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment |
(0.2) |
(2.2) |
|
Smart meter asset capital expenditure |
(3.3) |
(4.5) |
|
Smart meter assets under construction |
(1.0) |
(1.7) |
|
Payment of software development costs |
(2.1) |
(1.3) |
|
Payment for acquisition of subsidiary, net of cash acquired |
(2.2) |
- |
|
Net cash used in investing activities |
(8.8) |
(9.7) |
|
Cash flows from financing activities |
|
|
|
Borrowings drawn down |
5.6 |
4.6 |
|
Interest paid on borrowings |
(0.5) |
(0.2) |
|
Interest paid on lease obligations |
(0.1) |
(0.2) |
|
Repayment of principal element of borrowings |
(0.3) |
(0.1) |
|
Repayment of principal element of lease obligations |
(0.9) |
(0.8) |
|
Net proceeds from share option exercises |
- |
0.4 |
|
Cash paid on repurchase of shares |
- |
(4.0) |
|
Dividends paid |
(10.6) |
(9.4) |
|
Net cash used in financing activities |
(6.8) |
(9.7) |
|
Net increase in cash and cash equivalents |
20.7 |
52.7 |
|
Cash and cash equivalents at the start of the year |
85.2 |
32.5 |
|
Cash and cash equivalents at the end of the year |
105.9 |
85.2 |
|
|
|
|
Notes to the consolidated financial statements
1. Significant accounting policies
Yü Group PLC (the "Company") is a public limited company incorporated in the United Kingdom, with company number 10004236. The Company is limited by shares and the Company's ordinary shares are traded on AIM. The Company is limited by shares and the Company's ordinary shares are traded on AIM.
These condensed consolidated financial statements ("Financial Statements") as at and for the year ended 31 December 2025 comprise the Company and its subsidiaries (together referred to as the "Group"). The Group is primarily involved in the supply of electricity, gas and water to small and medium sized entities ("SMEs") and larger corporates in the UK, and the installation, ownership and service of smart meters.
Basis of preparation
Whilst the financial information included in this preliminary announcement has been prepared on the basis of the requirements of UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006 and effective at 31 December 2025, this announcement does not itself contain sufficient information to comply with International Accounting Standards.
The financial information set out in this preliminary announcement does not constitute the Company's statutory financial statements for the years ended 31 December 2025 or 2024 but is derived from those financial statements.
Statutory financial statements for 2024 have been delivered to the registrar of companies and those for 2025 will be delivered in due course. The auditors have reported on those financial statements; their reports were (i) unqualified and (ii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The condensed consolidated Financial Statements are presented in British pounds sterling (£), which is the presentation currency of the Group. All values are rounded to the nearest million (£'m), except where otherwise indicated.
Going concern
The financial statements are prepared on a going concern basis.
At 31 December 2025 the Group had net assets of £97.8m (2024: £70.3m), cash of £105.9m (2024: £85.2m) and net current assets of £59.8m (2024: £46.3m).
Management prepares detailed budgets and forecasts of financial performance and cash flow (including capital commitments) over the coming 14 months. The Board has confidence in achieving such targets and forecasts and has performed comprehensive analysis of various risks (including those set out in the Strategic Report) and sensitivities in relation to performance, the energy market and the wider economy.
The Group continues to demonstrate significant progress in its results. This has led to adjusted EBITDA (note 7) in 2025 of £50.6m (2024: £48.8m), which continues the momentum in the Group's results occurring since 2018. Management is confident in continuing this improvement in profitability based on its business model.
Profitability metrics remain strong in 2025, and the Group continues to drive sustainable, profitable growth. The Group's hedging strategy, approach to bad debt, and investment in digital technologies all contribute to achieving acceptable levels of profitability over the medium term.
Group cash liquidity is strong, with continued growth in cash reserves to £105.9m at year end (2024: £85.2m). The five-year commodity trading agreement entered into in February 2024 with the Shell Energy Europe Limited ("Shell") provides significant access to commodity markets whilst preserving Group liquidity, and the contract is performing well.
The Board actively seeks to utilise the Group's cash reserves to further their strategic operational aims, delivering the Group's strategic priorities through investment in subscriber acquisition costs, Digital by Default and other opportunities within the Capital Allocation Framework. Significant capital investment continues in smart meter assets to provide a long-term annuity income.
The Board has assessed risks and sensitivities and potential mitigation steps available to it in detail and continues to monitor risk and mitigation strategies in the normal course of business. These considerations include the following:
Customer receivables and bad debt
The Board considers customer receivable risks in view of the wider market, the energy price environment and the Group's ability to contract and protect its position in respect of late or non-payment.
The Board performed sensitivities on material changes to customer payment behaviour including the timing of payments or if bad debt levels were to increase.
The Group has extensive mitigating actions in place. These include credit checks at point of sale and throughout the customer lifecycle, the requirement for some customers to pay reasonable security deposits at the point of sale, and the offering (ensuring compliance with regulation and good industry practice) of pay as you go products which enable certain customers to access more favourable tariffs. The Group also supports customers with payment plan arrangements, for those customers who will, when able, provide payment, and will ultimately (for some customers, as appropriate based on the circumstances) progress legal and/or disconnection proceedings to mitigate further bad debt.
In view of the Group's effective hedging strategy against volatile market prices, and the Group's ability to manage debt through various mitigating actions, the Board is confident that there will be no material impact relevant to the going concern assumption. While the bad debt percentage has increased for the Group as a result of the impact of wider market challenges on our customers, our internal approaches and strategies have mitigated this risk over the year and forecast to continue to do so going forward.
Hedging arrangements and Trading Agreement
A five-year commodity trading arrangement between Shell and the main entities of the Group (including Yü Group PLC, Yü Energy Holding Limited and Yü Energy Retail Limited), signed February 2024 ("the Trading Agreement"), enables the Group to purchase electricity and gas on forward commodity markets. The Trading Agreement enables forecasted customer demand to be hedged in accordance with an agreed risk mandate (further detailed in the Group's risks and uncertainties reporting in the Strategic Report). This hedging position and the Board-defined risk strategy has mitigated, and is expected to continue to mitigate, the impact on the Group from underlying movements in global commodity markets.
As part of the Trading Agreement, and is customary for such arrangements, Shell provides access to commodity products and holds security over the main trading assets of the Group which could, ultimately and in extreme and limited circumstances, lead to a claim on some or all of the assets of the Group. In return, Shell provides market access without the need to post cash collateral in the normal course of operation.
The Board carefully modelled in detail, and continues to monitor, certain covenants related to profitability, net worth and liquidity associated with the Trading Agreement to assess the likelihood of any breach of such agreement and the impact any such breach would likely have. Such scenarios include reduced gross margin and increased bad debt, and the impact these might have on the ability to maintain compliance with covenants.
After a detailed review, the Board has concluded that liquidity or covenant compliance scenario issues to be remote based on worst-case scenario modelling that would impact the going concern status of the Group.
Summary
Following an extensive review of the Group's forward business plan and associated risks and sensitivities to these base forecasts (and available mitigation strategies), the Board concludes that it is appropriate to prepare the financial statements on a going concern basis. The Board also considers that there is sufficient headroom to ensure the Group meets covenants based on various downside scenarios assessed.
Basis of consolidation
The consolidated accounts of the Group include the assets, liabilities and results of the Company and subsidiary undertakings in which Yü Group PLC has a controlling interest. All intra-Group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
Revenue recognition
The Group enters into contracts to supply gas, electricity and water to its customers, and provides availability of smart meter assets. Revenue represents the fair value of the consideration received or receivable from the sale of actual and estimated gas, electricity and water supplied during the year, net of discounts, climate change levy and value-added tax. Revenue is recognised on consumption, being the point at which the transfer of the goods or services to the customer takes place and based on an assessment of the extent to which performance obligations have been achieved.
Due to the nature of the energy supply industry and its reliance with some traditional (non-smart) meter types upon estimated meter readings, gas, electricity and water revenue includes the directors' best estimate of differences between estimated sales and billed sales. The Board remain focused upon the smart meter roll out through Yü Smart to mitigate this risk. The Group makes estimates of customer consumption based on available industry data, and also seasonal usage curves that have been estimated from industry available historical actual usage data, as appropriate for each site supplied by the Group.
Revenues for the supply of metering services or the installation of metering assets are, where for Group companies, eliminated on consolidation.
Government support to customers
The Energy Bills Discount Scheme ("EBDS"), implemented by HM Government through BEIS, was in place from 1 April 2023 to 31 March 2024 and resulted in customers being provided financial support through a contribution to their energy charges. The scheme has now closed.
Under the EBDS arrangement, amounts receivable from BEIS do not impact the Group's contract with customers; therefore, the amounts contributed under the schemes are treated as a cash payment towards customer bills. As such, revenue recognised is based on the amount chargeable per the contract with customers which is gross of the amount contributed through EBDS.
Costs to obtain a contract
Under IFRS 15 "Revenue from Contracts with Customers", the incremental costs of obtaining a contract are recognised as an asset if they are expected to be recovered. These costs include expenditures that would not have been incurred if the contract had not been secured and include broker sales commissions payable for energy contracts with customers.
Financial instruments
Non-derivative financial instruments
Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents and trade and other payables.
Trade and other receivables
Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any specific impairments and expected credit losses.
Impairment
The Group has elected to measure credit loss allowances for trade receivables and accrued income at an amount equal to lifetime expected credit losses ("ECLs"). Specific impairments are made when there is a known impairment need against trade receivables and accrued income. When estimating ECLs, the Group assesses reasonable, relevant and supportable information, which does not require undue cost or effort to produce. This includes quantitative and qualitative information and analysis, incorporating historical experience, informed credit assessments and forward-looking information. Loss allowances are deducted from the gross carrying amount of the assets.
Trade and other payables
Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and short-term deposits (monies held on deposit are accessible with one month's written notice). Cash and cash equivalents exclude any cash collateral posted with third parties and bank accounts which are secured by the Group's bankers (or others).
Derivative financial instruments
The Group uses commodity purchase contracts to hedge its exposures to fluctuations in gas and electricity commodity prices. The Group's main commodity trading activities are expected to be delivered entirely to the Group's customers and therefore the Group classifies them as "own use" contracts and outside the scope of IFRS 9 "Financial Instruments". This is achieved when:
• a physical delivery takes place under all such contracts;
• the volumes purchased or sold under the contracts correspond to the Group's operating requirements; and
• no part of the contract is settled net in cash.
This classification as "own use" allows the Group not to recognise the commodity purchase contracts, at fair value, on its balance sheet at the year end.
To the extent that any commodity purchase contracts do not meet the criteria listed above, then such contracts are recognised at fair value under IFRS 9. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss.
Classification of financial instruments issued by the Group
Financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions:
(a) they include no contractual obligations upon the Group to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and
(b) where the instrument will or may be settled in the Group's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company's own equity instruments or is a derivative that will be settled by the Company exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the Company's own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares.
Details of the sensitivity analysis performed in relation to the Group's financial instruments are included in note 23.
Business Combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
For business combinations, the Group recognises any non-controlling interest in the acquiree at the non-controlling interest's proportionate share of the acquiree's net assets. For business combinations where the Group has entered into a put and call option arrangement over future equity interest, the present obligation to acquire the equity interest is recognised as a financial liability in accordance with IAS 32 and not recognised as non-controlling interest.
If the Group acquires a controlling interest in a business in which it previously held an equity interest, that equity interest is remeasured to fair value at the acquisition date with any resulting gain or loss recognised in profit or loss or other comprehensive income, as appropriate.
Consideration transferred as part of a business combination does not include amounts related to the settlement of pre-existing relationships. The gain or loss on the settlement of any pre-existing relationship is recognised in profit or loss.
Assets acquired and liabilities assumed are measured at their acquisition-date fair values.
Goodwill
Goodwill represents the excess of the cost of a business combination over the Group's interest in the fair value of identifiable assets, liabilities and contingent liabilities acquired.
Cost comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus the amount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree. Contingent consideration is included in cost at its acquisition date fair value and, in the case of contingent consideration classified as a financial liability, remeasured subsequently through profit or loss. Direct costs of acquisition are recognised immediately as an expense.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.
Goodwill is not amortised, as it is subject to impairment review.
Intangible assets
Intangible assets that are acquired separately by the Group are stated at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired in a business combination are initially recognised at their fair value at the acquisition date. After initial recognition, intangible assets acquired in a business combination are reported at their initial fair value less amortisation and accumulated impairment losses.
Software and system assets are recognised at cost, including those internal costs attributable to the development and implementation of the asset in order to bring it into use. Cost comprises all directly attributable costs, including costs of employee benefits arising directly from the development and implementation of software and system assets.
Amortisation is charged to the statement of profit and loss on a straight-line basis over the estimated useful lives of the intangible assets from the date they are available for use. The estimated useful lives are as follows:
• Licence - 35 years
• Customer contract books - Over the period of the contracts acquired (typically 2-3 years)
• Software and systems - 3 to 5 years
Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives for the current and comparative periods are as follows:
• Freehold land - Not depreciated
• Freehold property - 30 years
• Plant and machinery - 5 years
• Installed smart meter assets - 15 years
• Assets under construction - Not depreciated
• Computer equipment - 3 years
• Fixtures and fittings - 3 years
Smart meter assets
The Group's meter asset portfolio recorded within property, plant and equipment comprises both installed and uninstalled meter assets.
Newly purchased meter units and other significant ancillary parts which are critical for the meter unit to operate upon installation (such as regulators) are initially recognised within property, plant and equipment at cost.
Upon installation, an installed meter asset comprises three key components including the meter unit, the significant ancillary parts and the cost of installation (comprising labour and consumables).
Newly purchased uninstalled meter units and ancillary parts are not subject to depreciation as they are not yet available for use in the location and condition necessary to be capable of operating in the manner intended by management. Depreciation on newly purchased meter units and ancillary parts commences once the asset has been fully installed.
The estimated useful economic life of installed smart meter assets is defined above.
Upon removal of an installed meter asset, the meter unit condition is reviewed to determine re-installation viability and classified as temporarily idle until re-installed. The meter continues to be depreciated throughout. Meter units that are not deemed fit for re-use are disposed of.
Leased assets
The Group as a lessee
For any new contract entered into the Group considers whether a contract is, or contains, a lease. A lease is defined as "a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration". To apply this definition, the Group assesses whether the contract meets three key evaluations, which are whether:
• the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group;
• the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract; and
• the Group has the right to direct the use of the identified asset throughout the period of use. The Group assesses whether it has the right to direct "how and for what purpose" the asset is used throughout the period of use.
Measurement and recognition of leases as a lessee
At the lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease, if that rate is readily available, or the Group's incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in-substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term.
On the statement of financial position, right-of-use assets are separately identified and lease liabilities have been included in trade and other payables.
Impairment of goodwill, intangible assets and property, plant and equipment
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets to which it belongs for which there are separately identifiable cash flows; its cash generating units ('CGUs'). Goodwill is allocated on initial recognition to each of the Group's CGUs that are expected to benefit from a business combination that gives rise to the goodwill.
Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other comprehensive income. Impairment loss recognised for goodwill is not reversed.
Inventory
Inventory is held at the lower of cost, being all directly attributable costs, and net realisable value.
Share-based payments
Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the Group.
The cost of equity-settled transactions with employees is measured by reference to the fair value on the date they are granted. Where there are no market conditions attaching to the exercise of the option, the fair value is determined using a range of inputs into a Black-Scholes pricing model. Where there are market conditions attaching to the exercise of the options a Black-Scholes option pricing model is used to determine fair value based on a range of inputs. The value of equity-settled transactions is charged to the statement of comprehensive income over the period in which the service conditions are fulfilled with a corresponding credit to a share-based payments reserve in equity.
Cash-settled share-based awards are initially measured at fair value at the date of grant. Subsequently the awards are fair valued at each reporting date and a proportionate expense for the duration of the vesting period elapsed is recognised in profit and loss together with a liability on the balance sheet.
Employer's National Insurance costs arising and settled in cash on exercise of unapproved share options are included in the share-based payment charge in the profit or loss, with no corresponding credit to reserves in equity.
Pension and post-retirement benefit
The Group operates a defined contribution scheme which is available to all employees. The assets of the scheme are held separately from those of the Group in independently administered funds. Payments are made by the Group to this scheme and contributions are charged to the statement of comprehensive income as they become payable.
Taxation
Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the statement of profit and loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous periods.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and investments in subsidiaries where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that the temporary difference can be utilised against future available taxable profits.
Deferred tax assets and liabilities are only offset when there is both a legal right to set-off and an intention to settle on a net basis.
Treasury shares
Consideration paid/received for the purchase/sale of treasury shares is recognised directly in equity. Shares held by and disclosed as treasury shares are deducted from contributed equity.
Any excess of the consideration received on the sale of treasury shares over the weighted average cost of the shares sold is credited to share premium.
Fair value measurement
A number of assets and liabilities included in the Group's financial statements require measurement at, and/or disclosure of, fair value.
The fair value measurement of the Group's financial and non-financial assets and liabilities utilises market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the 'fair value hierarchy'):
· Level 1: Quoted prices in active markets for identical items (unadjusted)
· Level 2: Observable direct or indirect inputs other than Level 1 inputs
· Level 3: Unobservable inputs (i.e. not derived from market data)
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.
Management uses various valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible, but this is not always available. In that case, management uses the best information available.
Segmental reporting
In accordance with IFRS 8 "Operating Segments", the Group has made the following considerations to arrive at the disclosure made in this financial information.
IFRS 8 requires consideration of the Chief Operating Decision Maker ("CODM") within the Group. In line with the Group's internal reporting framework and management structure, the key strategic and operating decisions are made by the Executive Committee, which regularly reviews the Group's performance and balance sheet position and receives financial information for the Group as a whole and acts in accordance with the overall strategy as set by the Board of directors. Accordingly, the Executive Committee is deemed to be the CODM.
The Group's revenue and profit were predominantly delivered from its principal activity, which is the supply of utilities to business customers in the UK, and with an increasing additional revenue stream from the supply and installation of smart meters. The Group's operational segments are:
• Retail - being the supply of electricity, gas and water to business customers in the UK;
• Smart - being the provision of engineering and related services to install and maintain smart and other meters;
• Metering assets - being the ownership and rental of smart metering assets; and
• Group - representing centrally managed Group functions, and other items which are not directly attributable to the other operating segments.
Segmental profit is measured at two profit levels, being operating profit, as shown on the face of the statement of profit and loss, and adjusted EBITDA, as utilised by management to manage the business segment activity (and as reconciled to operating profit in note 7).
Assets, liabilities and cash flows related to the various segments are managed at the Group level and are therefore not allocated or disclosed for each segment. The Group does disclose non-current assets and additions of such assets, allocation of goodwill and trade and other receivables by segment in line with its management of the Group's operations.
Alternative Performance Measures ("APMs")
The Group discloses Alternative Performance Measures ("APMs") that are not defined by IFRS. The directors believe that the presentation of APMs provides stakeholders with additional helpful information on the performance of the business but does not consider them to be a substitute for or superior to IFRS measures.
The Group's APMs are used to assist in measuring the performance of the business. The APMs are determined to offer valuable insights to users of the Group's financial statements by highlighting key value drivers and the effects of certain events and transactions on the entity's performance, financial position and cash flows. Adjusted results exclude certain items, because if included, these could distort the understanding of the Group's performance. The definition, purpose and how the measures are reconciled to statutory measures are set out in note 7 and note 8.
Standards and interpretations
The Group has adopted all of the new or amended accounting standards and interpretations that are mandatory for the current reporting period.
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early.
The following amendments are effective for the annual reporting period beginning 1 January 2026:
· Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures)
· Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7)
The following standards and amendments are effective for the annual reporting period beginning 1 January 2027:
· IFRS 18 "Presentation and Disclosure in Financial Statements"
· IFRS 19 "Subsidiaries without Public Accountability: Disclosures".
The Group is currently assessing the effect of these new accounting standards and amendments. IFRS 18 "Presentation and Disclosure in Financial Statements", which was issued by the IASB in April 2024 supersedes IAS 1 and will result in major consequential amendments to IFRS Accounting Standards including IAS 8 "Basis of Preparation of Financial Statements" (renamed from "Accounting Policies, Changes in Accounting Estimates and Errors"). Even though IFRS 18 may not have any effect on the recognition and measurement of items in the consolidated financial statements, it is expected to have a significant effect on the presentation and disclosure of certain items. These changes include categorisation and sub-totals in the statement of profit or loss, aggregation/disaggregation and labelling of information, and disclosure of management-defined performance measures.
The Group does not expect to apply IFRS 19.
Significant judgements and estimates
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Judgements
• the assessment of forward energy commodity contracts as "own use" under IFRS 9;
The Group enters into forward purchase contracts to hedge its position to closely match customers' expected demand over the term of the contract and does not engage in speculative trading. Factors such as the shape/granularity of traded products available (which do not perfectly align with customer demand) and variations in energy consumed by customers (as a result of varying customer behaviour and activity, and (particularly for gas) the weather impact) can influence the demand of customers and the extent to which the Group's forward commodity hedged position matches such customer demand.
The Board considers the extent to which forward contracts are entered into and continue to be held for the purpose of delivery of energy that is matched to customer expected volume. Factors considered in making this judgement include recent trading experience; historical accuracy in demand forecasting; and growth in volumes supplied to customers. Based on an assessment of these factors during the years ended 31 December 2024 and 31 December 2025, the Board considers that the forward commodity trades outstanding at the balance sheet date are intended to be fully utilised for the Group's "own use" to meet expected customer demand in the normal course of business. The judgement in relation to forward contracts being for "own use" results in such contracts not being assessed at fair value and therefore with no unrealised financial derivative asset or liability recognised at the balance sheet date.
Estimates and assumptions
• the estimated consumption (in lieu of accurate meter readings) of energy by customers;
Revenue includes some sales invoices raised which, where no actual meter read has been available, are based on industry data and estimates or other source information. Such invoices can therefore represent estimates which are lower or higher than the actual out-turn of energy consumption once accurate meter readings are obtained. The utilisation of smart or automatic meters is significant and growing in the Group, which reduces the amount estimated on invoiced sales. Estimates of meter readings utilised for billing customers are also utilised for settlement of costs, and therefore an over or under-estimated revenue is largely mitigated by an opposite amendment to cost of sales.
A change in estimated meter consumption volumes of +/-10% would impact revenue and accrued income by £6.0m (2024: £4.2m), with an approximate £5.2m (2024: £3.6m) corresponding adjustment to cost of sales and accruals. The impact on gross profit for each +/-10% of estimated consumption is therefore £0.8m (2024: £0.6m).
• the accrual for certain energy and industry related costs;
Certain gas and electricity costs are based on industry or management estimates based on knowledge of the market, historical norms and estimates of the expected out-turn position which may be over or underestimated. There are a number of specific cost areas that are material to the Group and include elements of significant estimation and judgement to determine the carrying amounts.
Industry settlement and impact on energy and industry costs
The energy industry involves settlement of industry costs to balance each participant's position so that its purchased energy matches its used energy. For the Group, as with other energy suppliers, this settlement of industry to balance its position ("Settlement") occurs on the difference between energy supplied to customers and energy purchased to settle such liability. These costs can be reconciled over periods of several months and years, though typically such costs have larger estimates over periods of up to three months with Settlement adjustments reducing beyond that time period.
In addition to the cost of gas and electricity adjusted as part of the Settlement process, other non-commodity related costs can also be subject to adjustments based on the same or similar processes. Such costs include those under the renewables obligation scheme, which requires the Group to settle a liability based on its settled energy consumption; costs related to the distribution and transmission of energy to end customers; and certain green levies and other charges utilised in operating the energy network.
A change of +/-10% in settled volumes for the quarter preceding the year end, being the directors' view of the most material months subject to potential change (and which does not have a corresponding adjustment to revenue), would impact costs and accruals by £7.8m (2024: £8.3m).
Unidentified Gas
Unidentified Gas ("UIG") is the shortfall between the volume of gas that enters the National Grid and what is consumed by end users, which the industry spreads across market participants. The Group's cost is determined by estimating the extent to which UIG is expected to arise from historical consumption across the industry using market data available, settled UIG costs to date and determining the expected net position for further payment or rebate of cost. Expected UIG allocations have been volatile in 2020 as a result of the pandemic, and also in 2023 as a result of the out-turns of unexpected low gas demand caused by the energy crisis. This led to industry under allocating gas to energy suppliers, requiring an estimation of accruals in the prior year for industry settlement to 'catch up'. Energy prices have returned to more stable and expected levels in recent years, but continues to require significant directors' judgement in its estimation at year end.
A change of +/-10% in estimated UIG rates that are expected to be attributable to the Group for the month of December 2025 would impact costs and accruals by £4.9m (2024: £4.1m).
• the recoverability of trade receivables and accrued income and related expected credit loss provision;
The Group has continued to grow its revenue and customer base which in turn increases the levels of billed and unbilled debt as part of the customer collections cycle. The customer base of the Group changes over time and the expected impact of macroeconomic factors on our client base around increased costs, interest rates, inflation and pressures on businesses creates increased uncertainty over the recoverability of debt. New customers increase estimation uncertainty as the Group does not have specific historical backwards-looking data for these customers, and therefore may have a more delayed payment history, or that the Group provides extended payment terms to customers to secure new business.
Trade receivables and accrued income recoverability is estimated based on historical performance, forward-looking macroeconomic factors affecting the customers' ability to settle the amounts outstanding based on available information available at the reporting date about past events, current conditions and a forward-looking view of future economic conditions to determine the directors' estimate of losses over the Group's customer receivable balances. Management also conducts a detailed review of significant debtor balances at the year end, including exposure after recoverability of VAT and Climate Change Levy ("CCL"), Given the growing customer portfolio, estimation assumptions and factors noted above the carrying amount of trade receivable and accrued income net of expected credit losses is considered to be a significant estimate. Sensitivity analysis on expected credit loss estimates is provided in note 23.
2. Segmental analysis
Operating segments
The directors consider there to be three operating segments, being the supply of utilities to businesses ("Retail"), the installation and maintenance of energy meters and other assets ("Smart") and the ownership and rental of smart metering assets ("Metering assets"). In addition, the Group eliminates intra-segment trading, where one segment trades with another, and has central income, expenses, assets and liabilities ("Group") which are not directly attributable to the operating segments.
|
2025 |
Retail £'m |
Smart £'m |
Metering assets £'m |
Intra-segment trading £'m |
Group £'m |
Total £'m |
|
Revenue |
700.0 |
10.9 |
1.8 |
(12.3) |
- |
700.4 |
|
Cost of sales |
(603.4) |
(7.8) |
- |
10.9 |
- |
(600.3) |
|
Gross profit |
96.6 |
3.1 |
1.8 |
(1.4) |
- |
100.1 |
|
Operating costs, before non-recurring items, share-based payments and depreciation |
(28.4) |
(2.0) |
(0.1) |
- |
(0.6) |
(31.1) |
|
Non-recurring items |
- |
- |
- |
- |
(0.6) |
(0.6) |
|
Share-based payments |
- |
- |
- |
- |
(2.1) |
(2.1) |
|
Depreciation and amortisation |
(1.4) |
(0.9) |
(0.6) |
- |
- |
(2.9) |
|
Net impairment losses on financial and contract assets |
(18.3) |
- |
(0.1) |
- |
- |
(18.4) |
|
Operating profit / (loss) |
48.5 |
0.2 |
1.0 |
(1.4) |
(3.3) |
45.0 |
|
Adjusted EBITDA (note 7) |
50.0 |
1.2 |
1.7 |
(1.9) |
(0.4) |
50.6 |
|
Non-current assets |
32.2 |
1.3 |
11.3 |
- |
6.1 |
50.9 |
|
Non-current asset additions |
2.0 |
0.2 |
4.6 |
- |
3.6 |
10.4 |
|
Goodwill |
- |
0.2 |
- |
- |
1.8 |
2.0 |
|
Trade and other receivables |
141.0 |
0.1 |
0.7 |
- |
0.4 |
142.2 |
|
2024 |
Retail £'m |
Smart £'m |
Metering assets £'m |
Intra-segment trading £'m |
Group £'m |
Total £'m |
|
Revenue |
645.3 |
12.7 |
0.7 |
(13.2) |
- |
645.5 |
|
Cost of sales |
(559.8) |
(8.8) |
- |
17.0 |
- |
(551.6) |
|
Gross profit |
85.5 |
3.9 |
0.7 |
3.8 |
- |
93.9 |
|
Operating costs, before non-recurring items, share-based payments and depreciation |
(29.0) |
(2.7) |
(0.1) |
0.8 |
(0.6) |
(31.6) |
|
Non-recurring items |
(1.4) |
- |
- |
- |
- |
(1.4) |
|
Share-based payments |
(4.0) |
- |
- |
- |
- |
(4.0) |
|
Depreciation and amortisation |
(1.5) |
(0.9) |
(0.3) |
0.3 |
(0.1) |
(2.5) |
|
Net impairment losses on financial and contract assets |
(13.5) |
- |
- |
- |
- |
(13.5) |
|
Operating profit / (loss) |
36.1 |
0.3 |
0.3 |
4.9 |
(0.7) |
40.9 |
|
Adjusted EBITDA (note 7) |
42.9 |
1.2 |
0.6 |
4.7 |
(0.6) |
48.8 |
|
Non-current assets |
36.3 |
5.5 |
6.8 |
(34.3) |
17.4 |
31.7 |
|
Non-current asset additions |
3.4 |
5.4 |
4.9 |
(3.9) |
1.8 |
11.6 |
|
Goodwill |
- |
0.2 |
- |
- |
- |
0.2 |
|
Trade and other receivables |
134.3 |
3.7 |
0.8 |
(42.5) |
12.6 |
108.9 |
Disaggregation of Revenue
The Group has disaggregated revenue into various categories in the following table which is intended to:
· depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic data; and
· enable users to understand the relationship with revenue segment information
100% of Group revenue, for both financial years, is generated from sales to customers in the United Kingdom (2024: 100%).
The Group's revenue disaggregated by pattern of revenue recognition is as follows:
|
2025 |
Retail £'m |
Smart £'m |
Metering assets £'m |
Intra-segment trading £'m |
Total £'m |
|
Product type |
|
|
|
|
|
|
Energy supply |
700.0 |
- |
- |
- |
700.0 |
|
Meter installation |
- |
10.9 |
- |
(10.9) |
- |
|
Meter rental |
- |
- |
1.8 |
(1.4) |
0.4 |
|
Revenue from contracts with customers |
700.0 |
10.9 |
1.8 |
(12.3) |
700.4 |
|
Timing of transfer of goods and services |
|
|
|
|
|
|
Goods transferred over time |
686.0 |
- |
1.8 |
(1.4) |
686.4 |
|
Goods transferred at a point in time |
14.0 |
10.9 |
- |
(10.9) |
14.0 |
|
Revenue from contracts with customers |
700.0 |
10.9 |
1.8 |
(12.3) |
700.4 |
|
2024 |
Retail £'m |
Smart £'m |
Metering assets £'m |
Intra-segment trading £'m |
Total £'m |
|
Product type |
|
|
|
|
|
|
Energy supply |
645.3 |
- |
- |
- |
645.3 |
|
Meter installation |
- |
12.7 |
- |
(12.7) |
- |
|
Meter rental |
- |
- |
0.7 |
(0.5) |
0.2 |
|
Revenue from contracts with customers |
645.3 |
12.7 |
0.7 |
(13.2) |
645.5 |
|
Timing of transfer of goods and services |
|
|
|
|
|
|
Goods transferred over time |
631.2 |
- |
0.7 |
(0.5) |
631.4 |
|
Goods transferred at a point in time |
14.1 |
12.7 |
- |
(12.7) |
14.1 |
|
Revenue from contracts with customers |
645.3 |
12.7 |
0.7 |
(13.2) |
645.5 |
The Group has no individual customers representing over 10% of revenue (2024: none).
The following aggregated amounts of transaction prices relate to the performance obligations from existing contracts that are unsatisfied or partially unsatisfied as at 31 December 2025:
|
|
|
|
Within 1 year £'m |
2-5 years £'m |
After 5 years £'m |
Total £'m |
|
Revenue expected to be recognised |
|
|
668.2 |
759.9 |
2.9 |
1,431.0 |
|
|
|
|
668.2 |
759.9 |
2.9 |
1,431.0 |
3. Auditor's remuneration
|
|
2025 £'m |
2024 £'m |
|
Audit of these financial statements |
0.1 |
0.1 |
|
Amounts receivable by auditor in respect of: |
|
|
|
Audit of financial statements of subsidiaries pursuant to legislation |
0.1 |
0.1 |
|
|
0.2 |
0.2 |
4. Operating profit
|
|
2025 £'m |
2024 £'m |
|
Profit for the year has been arrived at after charging: |
|
|
|
Staff costs (see note 6) |
24.4 |
23.3 |
|
Costs to obtain customer contracts |
33.8 |
24.9 |
|
Depreciation of property, plant and equipment |
1.0 |
0.7 |
|
Depreciation of right-of-use assets |
0.8 |
1.0 |
|
Amortisation of intangible assets |
1.1 |
0.8 |
5. Net finance income/(expense)
|
|
2025 £'m |
2024 £'m |
|
Bank interest receivable |
4.1 |
3.4 |
|
Other interest received |
0.2 |
0.8 |
|
Total finance income |
4.3 |
4.2 |
|
Bank interest and other finance charges payable |
- |
(0.2) |
|
Interest on borrowings |
(0.5) |
(0.2) |
|
Interest on lease liabilities |
(0.1) |
(0.2) |
|
Total finance costs |
(0.6) |
(0.6) |
|
Net finance income |
3.7 |
3.6 |
Other interest received consists of amounts due on collateral posted with the Group's industry deposit arrangements.
6. Staff numbers and costs
The average number of persons employed by the Group (including directors) during the period, analysed by category, was as follows:
|
|
2025 Number |
2024 Number |
|
Engineering |
88 |
84 |
|
Sales |
39 |
41 |
|
Administration |
353 |
347 |
|
|
480 |
472 |
The aggregate payroll costs of these persons were as follows:
|
|
2025 £'m |
2024 £'m |
|
Wages and salaries |
21.6 |
19.4 |
|
Social security costs |
2.4 |
2.4 |
|
Pension costs |
0.4 |
0.4 |
|
Share-based payments |
2.1 |
4.0 |
|
|
26.5 |
26.2 |
|
Of which: |
|
|
|
Amounts charged to operating profit |
24.4 |
23.3 |
|
Amounts related to smart metering installation in property, plant and engineering assets |
2.1 |
2.9 |
There were four persons employed directly by the Company during the year ended 31 December 2025 (2024: three), being the non-executive directors. The Company had three (2024: two) executive directors who served during the year, all of which had service contracts with a wholly owned subsidiary of the Company while in this role. In 2025, one executive director transitioned to the role of non-executive director.
Key management personnel
The aggregate compensation made to directors and other members of key management personnel (being members of the Group's Executive Committee comprising the Chief Executive Officer, Chief Financial Officer and other senior leaders) is set out below:
|
|
2025 |
2024 |
|
|
£'m |
£'m |
|
Short-term employee benefits |
2.8 |
2.2 |
|
Social security and pension costs |
0.4 |
0.9 |
|
Share-based payments |
2.0 |
3.9 |
|
|
5.2 |
7.0 |
Remuneration of the executive and non-executive directors is as follows:
|
|
2025 |
2024 |
|
|
£'m |
£'m |
|
Short-term employee benefits |
2.0 |
1.4 |
|
Social security and pension costs |
0.2 |
0.5 |
|
Share-based payments |
1.5 |
2.0 |
|
|
3.7 |
3.9 |
The total remuneration received by the highest paid director was £1.8m in the year (2024: £2.8m).
7. Alternative Performance Measures
Adjusted EBITDA
Non-GAAP measure. Adjusted EBITDA represents profit before interest and tax, depreciation, amortisation, non-recurring business expense and equity-related share-based payment charges.
The directors utilise adjusted EBITDA to make Group financial, strategic and operating decisions. The measure separates out certain items from defined IFRS measures because these are determined to assist users of these financial statements to evaluate business performance from recurring and normalised profitability that better align to operational cash flow (before the impact of working capital movements) and to obtain profitability margins as a percentage of revenue. This measure is frequently used by external stakeholders to evaluate financial performance and compare performance of other industry competitors, and will assist users to understand and evaluate, in the same manner as management, the movement in Group's operational performance on a comparable basis.
As adjusted EBITDA can exclude significant costs or gains, it should not be regarded as a complete picture of the Group's financial performance, which is presented in its total results.
The reconciliation of operating profit and adjusted EBITDA is as follows:
|
|
|
2025 |
2024 |
|
|
Notes |
£'m |
£'m |
|
Adjusted EBITDA reconciliation |
|
|
|
|
Operating profit |
|
45.0 |
40.9 |
|
Add back: |
|
|
|
|
Non-recurring operational costs1 |
|
0.6 |
1.4 |
|
Share-based payments2 |
25 |
2.1 |
4.0 |
|
Depreciation of property, plant and equipment |
14 |
1.0 |
0.7 |
|
Depreciation of right-of-use assets |
15 |
0.8 |
1.0 |
|
Amortisation of intangibles |
13 |
1.1 |
0.8 |
|
Adjusted EBITDA |
|
50.6 |
48.8 |
1. The non-recurring operational costs excludes costs incurred in connection with the establishment of new business units, including early-stage development activities prior to the commencement of normal commercial operations. These costs do not relate to the performance of the Group in the year or the ongoing operating performance and are incurred as part of discrete strategic initiatives intended to generate future growth. As they are outside of the normal course of business are therefore considered exceptional to the trading result.
In 2024, non-recurring fees were incurred in the termination of the Group's previous commodity trading agreement. The five-year commodity trading arrangement between Shell Energy Europe Limited ("Shell") and the main entities of the Group (including Yü Group PLC, Yü Energy Holding Limited and Yü Energy Retail Limited) was signed February 2024. Given the non-recurring nature of these costs and basis for reporting the APM measure, these costs have not been charged to adjusted EBITDA.
2. Share-based payment charges on share options are excluded from adjusted EBITDA as they are not related to business operational trading which provides clearer views of operating cash generation in the year. Further details of the share-based payments are documented in note 25.
Adjusted earnings per share
Adjusted earnings per share is defined as earnings per share excluding adjusted items. The measure is determined by dividing profit after tax, adjusted for post-tax adjusted items (relating to non-recurring operational costs and share-based payment charges) by the weighted average number of ordinary shares in issue during the financial period, excluding treasury shares held, and on a basic and fully diluted basis. This APM is a measure of management's view of the Group's underlying earnings per share.
Refer to note 8 for a reconciliation between earnings per share and adjusted earnings per share.
8. Earnings per share
Basic earnings per share
Basic earnings per share is based on the profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding.
|
|
2025 £'m |
2024 £'m |
|
Profit for the year attributable to ordinary shareholders |
35.9 |
33.5 |
|
|
2025 |
2024 |
|
Weighted average number of ordinary shares |
|
|
|
At the start of the year |
16,784,337 |
16,741,195 |
|
Effect of shares issued in the year |
5,621 |
175,825 |
|
Effect of purchase of treasury shares |
- |
(146,861) |
|
Number of ordinary shares for basic earnings per share calculation |
16,789,958 |
16,770,159 |
|
Dilutive effect of outstanding share options |
1,071,836 |
1,170,383 |
|
Number of ordinary shares for diluted earnings per share calculation |
17,861,794 |
17,940,542 |
|
|
2025 p |
2024 p |
|
Basic earnings per share |
214p |
200p |
|
Diluted earnings per share |
201p |
187p |
Adjusted earnings per share
See note 7 for details on adjusted earnings per share.
|
|
2025 £'m |
2024 £'m |
|
Adjusted earnings per share |
|
|
|
Profit for the year attributable to ordinary shareholders |
35.9 |
33.5 |
|
Add back operating profit adjusting items (per note 7): |
|
|
|
Share-based payments after tax |
2.1 |
3.2 |
|
Non-recurring operational cost after tax |
0.5 |
1.0 |
|
Adjusted basic profit for the year |
38.5 |
37.7 |
|
|
2025 p |
2024 p |
|
Adjusted earnings per share |
229p |
225p |
|
Diluted adjusted earnings per share |
216p |
210p |
9. Taxation
|
|
2025 £'m |
2024 £'m |
|
Current tax charge |
|
|
|
Current year |
12.9 |
9.9 |
|
Adjustment in respect of prior years |
(1.4) |
(0.1) |
|
|
11.5 |
9.8 |
|
Deferred tax charge |
|
|
|
Current year |
0.6 |
1.1 |
|
Adjustment in respect of prior years |
0.7 |
0.1 |
|
|
1.3 |
1.2 |
|
Total tax charge |
12.8 |
11.0 |
|
Tax recognised directly in equity |
|
|
|
Current tax recognised directly in equity |
- |
- |
|
Deferred tax recognised directly in equity |
(0.3) |
(2.0) |
|
Total tax recognised directly in equity |
(0.3) |
(2.0) |
|
Reconciliation of effective tax rate |
|
|
|
Profit before tax |
48.7 |
44.5 |
|
Tax at UK corporate tax rate of 25% (2024: 25%) |
12.2 |
11.1 |
|
Expenses not deductible for tax purposes |
1.6 |
0.4 |
|
Tax relief on exercise of share options |
- |
(1.1) |
|
Fixed asset differences |
(0.3) |
0.6 |
|
Adjustments in respect of prior periods |
(0.7) |
- |
|
Tax charge for the year |
12.8 |
11.0 |
Deferred taxes at 31 December 2025 and 31 December 2024 have been measured using the enacted tax rates at that date and are reflected in these financial statements on that basis. The tax rate effective from 1 April 2023 is 25%.
The corporation tax payable by the Group at 31 December 2025 was £3.0m (2024: £2.5m).
10. Dividends
The Group paid the following dividends in the year ended 31 December 2025:
· An interim dividend of 22p per share totalling £3.7m
· Final dividend of 41p per share totalling £6.9m, proposed in the year ended 31 December 2024
The Group paid the following dividends in the year ended 31 December 2024:
· An interim dividend of 19p per share totalling £3.2m
· Final dividend of 37p per share totalling £6.2m, proposed in the year ended 31 December 2023
The directors propose a final dividend in relation to 2025 of 45p per share (2024: 41p per share).
11. Business Combinations
ELX Solutions Ltd
On 17 December 2025, the Group acquired 51% of the voting equity instruments and control of ELX Solutions Ltd ("ELX"), a company whose principal activity is the provision of energy software and metering services. The principal reason for the acquisition was to use the expertise and software to improve product services delivered to customers.
The details of the business combination are as follows:
|
|
|
£'m |
|
Fair value of consideration transferred |
|
|
|
Amount settled in cash |
|
2.2 |
|
Fair value of contingent consideration |
|
1.8 |
|
|
|
4.0 |
|
Recognised amounts of identifiable net assets |
|
|
|
Intangible assets |
|
2.0 |
|
Property, plant and equipment |
|
- |
|
Inventory |
|
- |
|
Trade and other receivables |
|
0.3 |
|
Cash and cash equivalents |
|
0.2 |
|
Trade and other payables |
|
(0.1) |
|
Borrowings |
|
- |
|
Corporation tax payable |
|
- |
|
|
|
2.4 |
|
Goodwill on acquisition (note 12) |
|
1.6 |
|
Net cash outflow on acquisition |
|
|
|
Consideration transferred settled in cash |
|
2.2 |
|
Cash and cash equivalents acquired |
|
(0.2) |
|
|
|
2.0 |
The total acquisition costs charged to expenses was £36,000. These have been recognised as part of administrative expenses in the statement of comprehensive income.
The purchase agreement includes a put and call option over the remaining 49% of the remaining equity interest. The put option is exercisable by the non-controlling interest from 1 April 2027 until 31 March 2028 and the contingent consideration is determined based on a multiple of the revenue of ELX for a set qualifying period based on exercise date. The call option is exercisable by the Group from 1 April 2028 until lapse on 31 March 2029.
The £1.8m contingent consideration liability recognised represents the present value of the Group's probability-weighted estimate of the cash outflow. It reflects management's estimate of a 43% probability that the targets will be achieved and is discounted using an interest rate of 8%. As at 31 December 2025, there have been no changes in the estimate of the probable cash outflow or change in fair value. The effects on the fair value of risk and uncertainty in the future cash flows are dealt with by adjusting the estimated cash flows rather than adjusting the discount rate.
No non-controlling interest has been recognised in relation to ELX. The Group has entered into a put and call option arrangement that gives rise to a present obligation to acquire the remaining 49% equity interest, which is accounted for as a financial liability in accordance with IAS 32.
The identifiable net assets on acquisition have a fair value equal to their carrying value.
Goodwill reflects growth expectations, expected future profitability and the substantial skill and expertise of ELX's workforce.
ELX has not generated significant disclosable results for the period from acquisition from 17 December 2025 to the reporting date. If ELX had been acquired on 1 January 2025, revenue of the Group for 2025 would have been £701.5m, and profit for the year would be £36.2m.
Toucan Energy Limited
On 20 June 2025, the Group acquired 100% of the equity instruments of Toucan Energy Limited ("Toucan"), thereby obtaining control. The acquisition was made to support the Group's strategic market growth ambitions.
The business combination was settled for £0.2m in cash on the acquisition date, for minimal identifiable net assets. The goodwill on acquisition was £0.2m and the net cash outflow of consideration less cash and cash equivalents acquired totalled £0.2m.
The total acquisition costs charged to expenses was £43,000.
12. Goodwill
The movements in the net carrying amount of goodwill are as follows:
|
Group |
2025 £'m |
2024 £'m |
|
Cost |
|
|
|
At 1 January |
0.2 |
0.2 |
|
Acquired through business combination |
1.8 |
- |
|
At 31 December |
2.0 |
0.2 |
|
Accumulated impairment |
|
|
|
At 1 January |
- |
- |
|
Impairment loss recognised |
- |
- |
|
At 31 December |
- |
- |
|
Net book value at 31 December |
2.0 |
0.2 |
Impairment testing
The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the determination of a discount rate in order to calculate the present value of the cash flows.
The carrying amount of goodwill is allocated to the cash-generating units (CGUs) as follows:
|
|
2025 £'m |
2024 £'m |
|
Goodwill allocated to cash-generating units |
|
|
|
Retail |
0.2 |
- |
|
Smart |
0.2 |
0.2 |
|
Software |
1.6 |
- |
|
|
2.0 |
0.2 |
Smart
Goodwill arose on the acquisition of the management and certain other assets of Magnum Utilities Limited in May 2022, forming the foundations for the Yü Smart business unit to deliver the Group's smart metering installation activities. The recoverable amount of the CGU does not hold a significant proportion of the Group's overall goodwill balance and management have concluded no material impairment indicators exist.
Toucan
Goodwill arose on the acquisition of Toucan Energy Limited as disclosed in note 11. The recoverable amount of the CGU does not hold a significant proportion of the Group's overall goodwill balance and management have concluded no material impairment indicators exist.
ELX
The recoverable amounts of all the above CGUs have been determined from value in use calculations based on cash flow projections from budgets covering a five-year forecast approved by management. The present value of the expected cash flows of each cash generating unit is determined by applying a suitable discount rate reflecting current market assessments of the time value of money. Other major assumptions are as follows:
|
|
|
|
|
2025 % |
2024 % |
|
2025 |
|
|
|
|
|
|
Discount rate |
|
|
|
8 |
- |
|
Operating margin |
|
|
|
47 |
- |
|
Growth rate |
|
|
|
2 |
- |
Discount rates are based on the Group's weighted average cost of capital to reflect management's assessment of market and specific risks related to the cash-generating unit.
Growth rates beyond the first five years are based on economic data pertaining to the cash-generating unit concerned. At this stage and considering the direct exposure of the Group to the climate changes, management has considered growth rates were not significantly affected and were still consistent with long-term perspectives of its industry and expectations from market participants.
Operating margins have been based on past experience and future expectations in the light of anticipated economic and market conditions.
The recoverable amount of the CGU is assessed to be £7.6m which exceeds its carrying amount by £3.9m.
If any one of the above key assumptions were to change by +/- 1%, no impairment would be recognised, and the recoverable amount would exceed the carrying amount by:
|
|
|
|
|
2025 £'m |
2024 £'m |
|
2025 |
|
|
|
|
|
|
Discount rate |
|
|
|
2.8 |
- |
|
Operating margin |
|
|
|
3.8 |
- |
|
Growth rate |
|
|
|
3.0 |
- |
13. Intangible assets
|
Group |
|
Electricity licence £'m |
Customer books £'m |
Software and systems £'m |
Total £'m |
|
Cost |
|
|
|
|
|
|
At 1 January 2025 |
|
0.1 |
0.7 |
4.7 |
5.5 |
|
Additions |
|
- |
- |
2.1 |
2.1 |
|
Acquired through business combinations |
|
- |
- |
2.0 |
2.0 |
|
At 31 December 2025 |
|
0.1 |
0.7 |
8.8 |
9.6 |
|
Amortisation |
|
|
|
|
|
|
At 1 January 2025 |
|
- |
0.7 |
2.0 |
2.7 |
|
Charge for the year |
|
- |
- |
1.1 |
1.1 |
|
At 31 December 2025 |
|
- |
0.7 |
3.1 |
3.8 |
|
Net book value at 31 December 2025 |
|
0.1 |
- |
5.7 |
5.8 |
|
Cost |
|
|
|
|
|
|
At 1 January 2024 |
|
0.1 |
0.7 |
3.4 |
4.2 |
|
Additions |
|
- |
- |
1.3 |
1.3 |
|
At 31 December 2024 |
|
0.1 |
0.7 |
4.7 |
5.5 |
|
Amortisation |
|
|
|
|
|
|
At 1 January 2024 |
|
- |
0.7 |
1.2 |
1.9 |
|
Charge for the year |
|
- |
- |
0.8 |
0.8 |
|
At 31 December 2024 |
|
- |
0.7 |
2.0 |
2.7 |
|
Net book value at 31 December 2024 |
|
0.1 |
- |
2.7 |
2.8 |
The useful economic life of the acquired electricity licence is 35 years, which represents the fact that the licence can be revoked by giving 25 years' written notice but that this notice cannot be given any sooner than 10 years after the licence came into force in January 2013.
The customer book intangibles relate to acquisitions that took place in 2020. They represent the fair value of the customer contracts purchased in those acquisitions. The intangible assets were amortised over a useful economic life of two years, representing the average contract length of the customer books acquired.
Software and systems assets relate to investments made in third-party software packages, and directly attributable internal personnel costs in implementing those platforms, as part of the Group's Digital by Default strategy.
The amortisation charge is recognised in operating costs in the income statement.
14. Property, plant and equipment
|
Group |
Freehold land £'m |
Freehold property £'m |
Fixtures and fittings £'m |
Plant and machinery £'m |
Assets under construction £'m |
Computer equipment £'m |
Total £'m |
|
Cost |
|
|
|
|
|
|
|
|
At 1 January 2025 |
0.2 |
5.1 |
0.9 |
5.4 |
1.7 |
0.8 |
14.1 |
|
Additions |
- |
- |
- |
2.1 |
2.3 |
0.1 |
4.5 |
|
Reclassification |
- |
- |
- |
1.3 |
(1.3) |
- |
- |
|
At 31 December 2025 |
0.2 |
5.1 |
0.9 |
8.8 |
2.7 |
0.9 |
18.6 |
|
Depreciation |
|
|
|
|
|
|
|
|
At 1 January 2025 |
- |
0.4 |
0.6 |
0.2 |
- |
0.6 |
1.8 |
|
Charge for the year |
- |
0.2 |
0.2 |
0.4 |
- |
0.2 |
1.0 |
|
At 31 December 2025 |
- |
0.6 |
0.8 |
0.6 |
- |
0.8 |
2.8 |
|
Net book value at 31 December 2025 |
0.2 |
4.5 |
0.1 |
8.2 |
2.7 |
0.1 |
15.8 |
|
Cost |
|
|
|
|
|
|
|
|
At 1 January 2024 |
0.2 |
3.3 |
0.7 |
0.9 |
- |
0.7 |
5.8 |
|
Additions |
- |
1.8 |
0.2 |
2.9 |
3.3 |
0.1 |
8.3 |
|
Reclassification |
- |
- |
- |
1.6 |
(1.6) |
- |
- |
|
At 31 December 2024 |
0.2 |
5.1 |
0.9 |
5.4 |
1.7 |
0.8 |
14.1 |
|
Depreciation |
|
|
|
|
|
|
|
|
At 1 January 2024 |
- |
0.3 |
0.4 |
- |
- |
0.4 |
1.1 |
|
Charge for the year |
- |
0.1 |
0.2 |
0.2 |
- |
0.2 |
0.7 |
|
At 31 December 2024 |
- |
0.4 |
0.6 |
0.2 |
- |
0.6 |
1.8 |
|
Net book value at 31 December 2024 |
0.2 |
4.7 |
0.3 |
5.2 |
1.7 |
0.2 |
12.3 |
15. Right-of-use assets
|
Group |
Buildings £'m |
Motor vehicles £'m |
Total £'m |
|
Cost |
|
|
|
|
At 1 January 2025 |
0.2 |
2.8 |
3.0 |
|
Additions |
- |
- |
- |
|
Disposals |
- |
(0.5) |
(0.5) |
|
Lease modifications |
- |
0.2 |
0.2 |
|
At 31 December 2025 |
0.2 |
2.5 |
2.7 |
|
Depreciation |
|
|
|
|
At 1 January 2025 |
- |
1.2 |
1.2 |
|
Charge for the year |
0.1 |
0.7 |
0.8 |
|
Disposals |
- |
(0.3) |
(0.3) |
|
At 31 December 2025 |
0.1 |
1.6 |
1.7 |
|
Net book value at 31 December 2025 |
0.1 |
0.9 |
1.0 |
|
Cost |
|
|
|
|
At 1 January 2024 |
2.0 |
0.8 |
2.8 |
|
Additions |
- |
2.0 |
2.0 |
|
Disposals |
(1.8) |
- |
(1.8) |
|
At 31 December 2024 |
0.2 |
2.8 |
3.0 |
|
Depreciation |
|
|
|
|
At 1 January 2024 |
0.8 |
0.3 |
1.1 |
|
Charge for the year |
0.1 |
0.9 |
1.0 |
|
Disposals |
(0.9) |
- |
(0.9) |
|
At 31 December 2024 |
- |
1.2 |
1.2 |
|
Net book value at 31 December 2024 |
0.2 |
1.6 |
1.8 |
Other assets relate to lease arrangements for motor vehicles to undertake engineering activities.
16. Investments in subsidiaries
The Company has the following direct and indirect investments in subsidiaries, all of which are incorporated in the United Kingdom:
|
Company name |
Holding |
Proportion of shares held |
Nature of business |
|
Yü Energy Holding Limited |
Ordinary shares |
100% |
Gas shipping services and holding company |
|
Yü Energy Retail Limited1 |
Ordinary shares |
100% 1 |
Supply of energy to businesses |
|
Yu Water Limited |
Ordinary shares |
100% |
Supply of water to businesses |
|
KAL Portfolio Trading Limited |
Ordinary shares |
100% |
Dormant/holding company |
|
Yü PropCo Leicester Ltd2 |
Ordinary shares |
100% 2 |
Property ownership |
|
Yü PropCo Nottingham Ltd2 |
Ordinary shares |
100% 2 |
Property ownership |
|
Yü-Smart Ltd |
Ordinary shares |
100% |
Smart metering installation and maintenance |
|
Yü Services Limited |
Ordinary shares |
100% |
Holding company |
|
Kensington Meter Assets Ltd3 |
Ordinary shares |
100% 3 |
Ownership of energy meter assets |
|
Yü Innovate Limited |
Ordinary shares |
100% |
Holding company |
|
Toucan Energy Limited |
Ordinary shares |
100% |
Dormant energy licensed company |
|
ELX Solutions Ltd4 |
Ordinary shares |
51% 4 |
Energy software and metering services provider |
|
Adaptive Robotic Information Consultants LLC 5 |
Ordinary shares |
100%5 |
Software systems research and development |
All of the above entities are included in the consolidated financial statements and are direct holdings of the Company except:
1. Yü Energy Retail Limited is a subsidiary of Yü Energy Holding Limited.
2. Yü PropCo Leicester Ltd and Yü PropCo Nottingham Ltd are subsidiaries of KAL Portfolio Trading Limited.
3. Kensington Meter Assets Ltd is a subsidiary of Yü Services Limited.
4. ELX Solutions Ltd is a subsidiary of Yü Innovate Limited. Its registered address is Suite 15 Highfield House, 185 Chorley New Road, Bolton, BL1 4QZ. See note 11 for details of acquisition.
5. Adaptive Robotic Information Consultants LLC is incorporated in the UAE with registered address Al Fattan Business Hub, Level 9 / 903 & 904, Marsa Dubai, Dubai, U.A.E.
All entities excluding ELX Solutions Ltd and Adaptive Robotic Information Consultants LLC have the same registered address as Yü Group PLC; CPK House, 2 Horizon Place, Nottingham Business Park, Mellors Way, Nottingham, NG8 6PY.
17. Deferred tax assets
Deferred tax assets are attributable to the following:
|
|
|
|
|
2025 £'m |
2024 £'m |
|
Property, plant and equipment |
|
|
|
(2.1) |
(0.8) |
|
Share-based payments |
|
|
|
3.9 |
3.6 |
|
|
|
|
|
1.8 |
2.8 |
Movement in deferred tax in the period:
|
|
At 1 January 2025 £'m |
Recognised in income £'m |
Recognised directly in equity £'m |
At 31 December 2025 £'m |
|
Property, plant and equipment |
(0.8) |
(1.3) |
- |
(2.1) |
|
Share-based payments |
3.6 |
- |
0.3 |
3.9 |
|
|
2.8 |
(1.3) |
0.3 |
1.8 |
|
|
At 1 January 2024 £'m |
Recognised in income £'m |
Recognised directly in equity £'m |
At 31 December 2024 £'m |
|
Property, plant and equipment |
(0.3) |
(0.5) |
- |
(0.8) |
|
Tax value of loss carry-forwards |
0.8 |
(0.8) |
- |
- |
|
Share-based payments |
1.6 |
- |
2.0 |
3.6 |
|
|
2.1 |
(1.3) |
2.0 |
2.8 |
The deferred tax asset is expected to be utilised by the Group in the coming years and there is no time limit to utilisation of such losses. The Board forecasts sufficient taxable income as a result of the growth in the customer base and increased profitability against which it will utilise these deferred tax assets.
18. Inventory
The Group has the following inventory balances in relation to its engineering activities:
|
|
2025 £'m |
2024 £'m |
|
Stock of goods for resale |
0.4 |
0.4 |
|
|
0.4 |
0.4 |
19. Trade and other receivables
|
|
|
|
|
2025 £'m |
2024 £'m |
|
Current |
|
|
|
|
|
|
Net trade receivables |
|
|
|
21.5 |
16.0 |
|
Net accrued income |
|
|
|
65.1 |
57.8 |
|
Prepayments |
|
|
|
1.3 |
1.3 |
|
Costs to obtain customer contracts |
|
|
|
16.1 |
9.7 |
|
Industry collateral deposits |
|
|
|
6.4 |
7.0 |
|
Other receivables |
|
|
|
7.3 |
5.3 |
|
|
|
|
|
117.7 |
97.1 |
|
Non-current |
|
|
|
|
|
|
Costs to obtain customer contracts |
|
|
|
24.5 |
11.8 |
|
|
|
|
|
24.5 |
11.8 |
The reconciliation of gross trade receivables and accrued income and expected credit loss provision for the Group is as follows:
|
|
2025 |
|
2024 |
||
|
|
Trade receivables £'m |
Accrued income £'m |
|
Trade receivables £'m |
Accrued income £'m |
|
Gross carrying amount |
53.3 |
67.6 |
|
50.4 |
60.0 |
|
Provision for doubtful debts and expected credit loss |
(31.8) |
(2.5) |
|
(34.4) |
(2.2) |
|
Net carrying amount |
21.5 |
65.1 |
|
16.0 |
57.8 |
The movement in accrued income reflects the transfer from accrued income to trade receivables in the period plus the unbilled estimate of customer performance obligations satisfied. There are no other movements in accrued income balances.
The Group applies the simplified IFRS 9 approach in measuring expected credit losses which uses a lifetime expected credit loss allowance for all trade receivables and accrued income. To measure expected credit losses on a collective basis, trade receivables and accrued income are grouped based on similar credit risk and ageing. The expected credit loss of trade receivables and accrued income are allocated between two credit risk groups made up of active customer accounts ("Active"), which represent customers that remain on supply at the balance sheet date, and those customers which have left the supply ("Terminated") of the Group.
Provision rates for customer balances are determined based on the age of the balance outstanding, whether the customer remains being supplied energy by the Group, an assessment of historical debt and recovery on a customer basis and the extent and position of the balance in the Group's credit control process. Credit losses are adjusted to reflect current and forward-looking macroeconomic factors affecting the customers' ability to settle the amounts outstanding based on information available at the reporting date about past events, current conditions and a forward-looking view of future economic conditions. There have been no significant changes in the estimation techniques or significant assumptions made during the reporting period.
The gross amount of trade receivables and accrued income is stated inclusive of VAT and CCL of approximately 17% which,
on the write-off of debt, would typically be recoverable and is therefore not provided for.
Expected credit losses and the recognition, where appropriate, of previous customer credit balances are recognised in the income statement as net impairment losses on financial and contract assets.
The lifetime expected loss provision for trade receivables and accrued income is as follows:
|
Active |
Current £'m |
More than 30 days past due £'m |
More than 60 days past due £'m |
More than 90 days past due £'m |
Total £'m |
|
31 December 2025 |
|
|
|
|
|
|
Gross trade receivables |
5.6 |
4.7 |
2.2 |
11.9 |
24.4 |
|
Gross accrued income |
67.6 |
- |
- |
- |
67.6 |
|
Expected credit loss rate |
5% |
42% |
51% |
67% |
16% |
|
Expected credit loss allowance |
(3.6) |
(2.0) |
(1.1) |
(8.0) |
(14.7) |
|
31 December 2024 |
|
|
|
|
|
|
Gross trade receivables |
4.7 |
1.8 |
1.3 |
5.1 |
12.9 |
|
Gross accrued income |
60.0 |
- |
- |
- |
60.0 |
|
Expected credit loss rate |
5% |
36% |
41% |
66% |
11% |
|
Expected credit loss allowance |
(3.4) |
(0.6) |
(0.5) |
(3.3) |
(7.8) |
|
Terminated |
Current £'m |
More than 30 days past due £'m |
More than 60 days past due £'m |
More than 90 days past due £'m |
Total £'m |
|
31 December 2025 |
|
|
|
|
|
|
Gross trade receivables |
5.1 |
1.7 |
1.7 |
20.4 |
28.9 |
|
Gross accrued income |
- |
- |
- |
- |
- |
|
Expected credit loss rate |
30% |
68% |
70% |
77% |
68% |
|
Expected credit loss allowance |
(1.5) |
(1.2) |
(1.2) |
(15.7) |
(19.6) |
|
31 December 2024 |
|
|
|
|
|
|
Gross trade receivables |
2.4 |
1.6 |
1.5 |
32.0 |
37.5 |
|
Gross accrued income |
- |
- |
- |
- |
- |
|
Expected credit loss rate |
43% |
68% |
66% |
80% |
77% |
|
Expected credit loss allowance |
(1.0) |
(1.1) |
(1.0) |
(25.7) |
(28.8) |
Movements in the provision for doubtful debts and expected credit loss in gross trade receivables are as follows:
|
|
2025 |
2024 |
|
|
£'m |
£'m |
|
Opening balance |
34.4 |
27.7 |
|
Provisions recognised less unused amounts reversed |
18.1 |
13.0 |
|
Provision utilised in the year |
(20.7) |
(6.3) |
|
Closing balance - provision for doubtful debts and expected credit losses |
31.8 |
34.4 |
The provision utilised in 2025 relates to a write off of legacy debt balances historically fully provided for. There has been no significant impact to profit and loss in the year.
Movements in the provision for doubtful debts and expected credit loss in accrued income are as follows:
|
|
2025 |
2024 |
|
|
£'m |
£'m |
|
Opening balance |
2.2 |
1.7 |
|
Provisions recognised less unused amounts reversed |
0.3 |
0.5 |
|
Provision utilised in the year |
- |
- |
|
Closing balance - provision for doubtful debts and expected credit losses |
2.5 |
2.2 |
The directors consider that the cash amount of trade and other receivables approximates to their fair value due to their maturities being short term.
The Group other receivables balance contains £0.6m (2024: £0.7m) relating to bank cash deposits and restricted funds. These funds do not fulfil the criteria of being classified as cash and cash equivalents in view of the balance being secured for operational activities of the Group.
20. Cash and cash equivalents
|
|
|
|
|
2025 £'m |
2024 £'m |
|
Cash at bank and in hand |
|
|
|
105.9 |
85.2 |
|
|
|
|
|
105.9 |
85.2 |
As disclosed in note 19, the cash and cash equivalents amounts exclude £0.6m (2024: £0.7m) of cash which is included in other receivables.
21. Trade and other payables
|
|
|
|
|
2025 £'m |
2024 £'m |
|
Current |
|
|
|
|
|
|
Trade payables |
|
|
|
12.0 |
10.2 |
|
Energy and industry cost accruals |
|
|
|
50.8 |
47.3 |
|
Renewable obligation liability |
|
|
|
52.8 |
35.4 |
|
Operating and other accruals |
|
|
|
9.7 |
7.8 |
|
Lease liabilities |
|
|
|
0.7 |
0.9 |
|
Tax and social security |
|
|
|
18.2 |
17.2 |
|
Other payables |
|
|
|
16.5 |
14.9 |
|
|
|
|
|
160.7 |
133.7 |
|
Non-current |
|
|
|
|
|
|
Accrued expenses |
|
|
|
1.1 |
2.0 |
|
Contingent consideration |
|
|
|
1.8 |
- |
|
Lease liabilities |
|
|
|
0.2 |
0.9 |
|
|
|
|
|
3.1 |
2.9 |
Lease liabilities
|
Group |
Buildings £'m |
Motor vehicles £'m |
Total £'m |
|
At 1 January 2025 |
0.1 |
1.7 |
1.8 |
|
Additions |
- |
- |
- |
|
Interest expense |
- |
0.1 |
0.1 |
|
Disposals |
- |
- |
- |
|
Payments |
(0.1) |
(0.9) |
(1.0) |
|
At 31 December 2025 |
- |
0.9 |
0.9 |
|
Current |
- |
0.7 |
0.7 |
|
Non-current |
- |
0.2 |
0.2 |
|
At 1 January 2024 |
1.1 |
0.5 |
1.6 |
|
Additions |
- |
1.9 |
1.9 |
|
Interest expense |
0.1 |
0.1 |
0.2 |
|
Disposals |
(0.9) |
- |
(0.9) |
|
Payments |
(0.2) |
(0.8) |
(1.0) |
|
At 31 December 2024 |
0.1 |
1.7 |
1.8 |
|
Current |
- |
0.9 |
0.9 |
|
Non-current |
0.1 |
0.8 |
0.9 |
The incremental borrowing rate used to measure lease liabilities was 6%. The same rate was applicable for both the leased buildings and motor vehicles.
The contractual maturities (representing undiscounted contractual cash flows) of the lease liabilities are disclosed in note 23.
The total cash outflow for Group leases in 2025 was £1.0m (2024: £1.0m).
22. Borrowings
|
|
|
|
|
2025 £'m |
2024 £'m |
|
Current |
|
|
|
|
|
|
Bank loan |
|
|
|
0.5 |
0.2 |
|
Non-current |
|
|
|
|
|
|
Bank loan |
|
|
|
9.8 |
4.8 |
|
Total borrowings |
|
|
|
10.3 |
5.0 |
Borrowings solely relate to the Group's investment in smart meters which return an index-linked, recurring annuity over a 15+ year term, with Siemens Finance.
The Group entered into an additional £10m loan facility agreement in June 2025, in addition to an existing £5.2m facility agreed during 2023 with Siemens Finance in relation to the finance of such meters. The amounts outstanding relate to the amounts drawn down on the total £15.2m facilities. Repayments are over a 10-year period with a bullet repayment, and with an interest rate fixed at the date of drawdown. The borrowings are fully secured on the assets of the wholly owned subsidiary entity, Kensington Meter Assets Limited.
The bank loan is shown net of unamortised arrangement fees of £0.2m (2024: £0.2m) which are being amortised over the life of the loan.
The contractual maturities (representing undiscounted contractual cash flows) of the bank loans are disclosed in note 23.
23. Financial instruments and risk management
The Group's principal financial instruments are cash, trade and other receivables, trade and other payables and derivative financial assets.
The categories of financial instruments, including contract assets and liabilities, held by the Group are as follows:
|
|
2025 £'m |
2024 £'m |
|
Financial assets |
|
|
|
Cash and cash equivalents |
105.9 |
85.2 |
|
Financial assets recorded at amortised cost |
100.3 |
86.1 |
|
Financial liabilities |
|
|
|
Financial liabilities recorded at amortised cost |
(151.1) |
(120.8) |
|
Fair value through profit or loss |
(1.8) |
- |
|
Lease liabilities |
(0.9) |
(1.8) |
Management considers that the book value of financial assets and liabilities recorded at amortised cost and their fair value are approximately equal.
Derivative instruments, related to the Group's hedging of forward gas and electricity demand, are level 1 financial instruments and, should they not be treated as for "own use" under IFRS 9, would be measured at fair value through the statement of profit or loss. Such fair value would be measured by reference to quoted prices in active markets for identical assets or liabilities. All derivatives are held at a carrying amount equal to their fair value at the period end.
The Group trades entirely in pounds sterling and therefore it has no foreign currency risk.
The Group has exposure to the following risks from its use of financial instruments:
a) commodity hedging and derivative instruments (related to customer demand, market price volatility and counterparty credit risk);
b) customer, industry participants and financial institution credit risk; and
c) liquidity risk.
(a) Commodity hedging and derivative instruments
The Group is exposed to market risk in that changes in the price of electricity and gas may affect the Group's income or liquidity position. The use of derivative financial instruments to hedge customer demand also results in the Group being exposed to risks from significant changes in customer demand (beyond that priced into the contracts), and counterparty credit risk with the trading counterparty.
Commodity, energy prices and customer demand
The Group uses commodity purchase contracts to manage its exposures to fluctuations in gas and electricity commodity prices. The Group's objective is to reduce risk in energy price volatility by entering into back-to-back (to the extent practical) energy contracts with its suppliers and customers, in accordance with a Board-approved risk mandate. Commodity purchase contracts are entered into as part of the Group's normal business activities.
Commodity purchase contracts are expected to be delivered entirely to the Group's customers and are therefore classified as "own use" contracts. These instruments do not fall into the scope of IFRS 9 and therefore are not recognised in the financial statements.
If any of the contracts in the Group's portfolio are expected to be settled net in cash and are not entered into so as to hedge, in the normal course of business, the demand of customers, then such trades are measured at fair value. The gain or loss on remeasurement to fair value is recognised immediately in profit and loss. All forward trades were considered to meet the criteria for "own use" at 31 December 2025.
As far as practical, in accordance with the risk mandate, the Group attempts to match new sales contracts (based on estimated energy consumption, assuming normal weather patterns, over the contract term) with corresponding commodity purchase contracts. There is a risk that at any point in time the Group is over or under-hedged. Holding an over or under-hedged position opens the Group up to market risk which may result in either a positive or negative impact on the Group's margin and cash flow, depending on the movement in commodity prices. In view of the Group's commodity hedging position and available mitigation, any major deviation in customer demand is not considered to deliver a material impact on the Group's financial performance.
Increased volatility of global gas and electricity commodity prices had increased the potential gain or loss for an over or under-hedged portfolio over the 2024 and 2025 periods, and the Group continues to closely monitor its customer demand forecast to manage volatility. The Group also applies premia in its pricing of contracts to cover some market volatility (which has proven to be robust despite the market context), and contracts with customers also contain the ability to pass through costs which are incurred as a result of customer demand being materially different to the estimated volume contracted.
As contracts are expected to be outside of IFRS 9, there is no sensitivity analysis provided on such contracts.
Liquidity risk from commodity trading
The Group's trading arrangements can, in the absence of suitable credit lines or other arrangements being in place, result in the need to post cash or other collateral to trading counterparties when commodity markets are below the Group's average weighted price contracted forward. A significant reduction in electricity and gas markets could, therefore, lead to a material exposure arising for any trading counterparty which, in the absence of a suitable credit arrangement, could result in credit support such as cash being required as collateral.
As part of the Group's Trading Agreement with Shell, signed in February 2024, there is no requirement in the normal course to provide any such credit support and, as such, no impact on liquidity risk in the normal course of business.
Trading counterparty credit risk
In mirror opposite to the liquidity risk noted above, the Group carries credit risk to trading counterparties where market prices are above the average weighted price contracted forward. This risk is mitigated by energy delivered and not yet paid for, and no credit risk is therefore assessed as held at 31 December 2025.
The Board monitors the position in respect of credit exposure with its trading counterparties, and contracts only with major organisations which the Board considers to be robust and of appropriate financial standing. The Group's agreement with a group of Shell's standing has significantly reduced the exposure to counterparty risk, in view of the robust standing and contractual protections.
(b) Customer and financial institution or other counterparty credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group's receivables from customers, the Group's bankers where cash deposits are held, and the Group's trading counterparties as noted in section (a) above. These operational exposures are monitored and managed at Group level.
Credit risk related to customer trade receivables
All customers operate in the UK and turnover is made up of a large number of customers each owing relatively small amounts. New customers have their credit checked using an external credit reference agency prior to being accepted as a customer. The provision of a smart meter is also mandatory for some sales channels.
Credit risk is further managed through the Group's standard business terms, which require all customers to make a monthly payment predominantly by direct debit and requires security deposits in advance where appropriate. At 31 December 2025 there were no significant concentrations of credit risk. The carrying amount of the financial assets (less the element of VAT and CCL included in the invoiced balance, which is recoverable in the event of non-payment by the customer) represents the maximum credit exposure at any point in time.
The Board considers the exposure to debtors based on the status of customers in its internal debt journey, the level of customer engagement in finding an appropriate solution, the customer's creditworthiness, the provision for doubtful debts and expected credit loss held, the level of reclaimable VAT and CCL on the balances and cash received after the period end.
At 31 December 2025 the Group held a provision against doubtful debts and expected credit loss of £34.3m (2024: £36.6m). This is a combined provision against both trade receivables at £31.8m (2024: £34.4m) and accrued income at £2.5m (2024: £2.2m). The increase reflects the growth in the Group's activities.
In relation to trade receivables, after provision and accounting for VAT and CCL reclaimable the maximum exposure assessed by directors is less than 12% of the gross balance, being £6.7m, pre the consideration of any cash received from customers post the balance sheet date. If expected customer credit loss rate on trade receivables was +/-1% of that assessed, the gain or loss arising recognised in the income statement and impacting net assets would be +/-£0.5m.
If the expected customer credit loss rate on accrued income was +/-1%, the gain or loss arising would be +/-£0.7m.
Credit risk related to industry participants
The Group holds exposure to certain industry participants which, under Ofgem licence and market regulatory conditions, require payments in advance or other credit support. The total paid and outstanding to such industry participants at 31 December 2025 of £6.4m (2024: £7.0m) represents the maximum credit exposure.
Such amounts due are considered by management and refunds are requested, or alternative security provided by non-cash means, to the extent practicable. In view of the quasi-regulated nature of such counterparties, the directors consider the credit exposure to be low risk.
Credit risk with financial institutions
Cash balances are held in current and deposit accounts with the Group's bank, and short-term deposit accounts (which are either interest or non-interest accounts) with other major financial institutions.
At 31 December 2025 the Group had £105.9m (2024: £85.2m) of cash and bank balances (as per note 20). This balance can also fluctuate materially during the normal working capital cycle of the Group, reaching significantly above the reported balance through each monthly cycle, and increasing to a typical high point on 31 August of each year.
The Group only holds cash deposits with highly rated financial institutions, with significant credit rating, and diversified from the Group's main banker to at least one further institution.
(c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board is responsible for ensuring that the Group has sufficient liquidity to meet its financial liabilities as they fall due and does so by monitoring cash flow forecasts and budgets.
The Board also monitors the position in respect of the Group's performance against covenants as part of its trading arrangements, and any requirements under its licence to operate including its Ofgem energy supply licence.
As part of assessing the Group's liquidity, the Board considers: low profitability; delays in customer receivable payments; major risks and uncertainties; and the ability to comply with its Trading Agreement.
A deemed low cash collection scenario of +/-1% of billed cash in a month being delayed, in which customers delay or default on payment, would result in cash flow timing adjustments to management expectations of £0.7m.
Undiscounted contractual cash flows
The tables below have been drawn up based on the undiscounted contractual maturities of the Group's financial liabilities, including interest that will be unwound on those liabilities:
|
Group |
Carrying amounts £'m |
Within 1 year £'m |
2-5 years £'m |
After 5 years £'m |
Contractual cash flows £'m |
|
Trade and other payables |
142.6 |
139.8 |
3.5 |
- |
143.3 |
|
Borrowings |
10.3 |
1.3 |
5.2 |
9.3 |
15.8 |
|
Lease liabilities |
0.9 |
0.8 |
0.2 |
- |
1.0 |
|
At 31 December 2025 |
153.8 |
141.9 |
8.9 |
9.3 |
160.1 |
|
Trade and other payables |
115.8 |
114.9 |
1.0 |
- |
115.9 |
|
Borrowings |
5.0 |
0.6 |
2.5 |
4.3 |
7.4 |
|
Lease liabilities |
1.8 |
1.0 |
0.9 |
- |
1.9 |
|
At 31 December 2024 |
122.6 |
116.5 |
4.4 |
4.3 |
125.2 |
(d) Financial instruments measured as fair value
Financial assets and financial liabilities measured at fair value in the consolidated statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:
· Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
· Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
· Level 3: unobservable inputs for the asset or liability.
The fair value hierarchy of financial instruments measured at fair value is provided below:
|
Group |
2025 Level 1 £'m |
2025 Level 2 £'m |
2025 Level 3 £'m |
2024 Level 1 £'m |
2024 Level 2 £'m |
2024 Level 3 £'m |
|
Financial liabilities |
|
|
|
|
|
|
|
Contingent consideration |
- |
- |
1.8 |
- |
- |
- |
|
At 31 December 2025 |
- |
- |
1.8 |
- |
- |
- |
There were no transfers between levels during the period. The valuation techniques and significant unobservable inputs used in determining the fair value measurement of level 2 and level 3 financial instruments, as well as the inter-relationship between key unobservable inputs and fair value, are as follows:
· Contingent consideration (level 3) - The fair value of contingent consideration related to the acquisition of ELX (see note 11) is estimated using a present value technique. The £1.8m fair value is estimated by probability-weighting the estimated future cash outflows, adjusting for risk and discounting at 8%. The probability-weighted cash outflows before discounting are £2.5m and reflect management's estimate of a 43% probability that the contract's target level will be achieved. The discount rate used is 8%, based on the Group's estimated incremental borrowing rate, and therefore reflects the Group's credit position. The effects on the fair value of risk and uncertainty in the future cash flows are dealt with by adjusting the estimated cash flows rather than adjusting the discount rate. There were no changes to the valuation techniques during the period.
There has been no movement in the opening and closing fair value balance of level 3 financial instruments outside of the fair value acquired through business combination disclosed above.
24. Share capital and reserves
|
Share capital |
2025 Number |
2025 £'m |
2024 Number |
2024 £'m |
|
Allotted and fully paid ordinary shares of £0.005 each |
17,019,315 |
0.1 |
17,019,315 |
0.1 |
The Company has one class of ordinary share with nominal value of £0.005 each, which carries no right to fixed income. The holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at meetings of the Company. The Company holds 224,628 shares in treasury and as at 31 December 2025 (2024: 234,978), the total number of shares in issue with voting rights was 16,794,687 (2024: 16,784,337).
Share capital represents the value of all called up, allotted and fully paid shares of the Company.
The share premium movement in 2024 for the Group and the Company relates to:
• the excess of the price at which share options were exercised during the year, over the £0.005 nominal value of those shares, being £0.4m during the year; and
• the cancellation of the share premium account on 3 July 2024, when such cancellation was approved and certified under the Companies Act 2006. The share premium account of £12.3m was credited to distributable reserves on that date.
Treasury shares
On 22 May 2024 the Company purchased 234,978 ordinary shares at a price of £17 a share totalling £4.0m to hold in treasury. It is intended that these ordinary shares held in treasury will be utilised to satisfy future option exercises.
In 2025 the Group transferred 10,350 ordinary shares from treasury to settle exercise of employee share options.
|
Other equity |
2025 Number |
2025 £'m |
2024 Number |
2024 £'m |
|
Treasury shares |
(224,628) |
(3.8) |
(234,978) |
(4.0) |
Merger reserve
The merger reserve was previously created as part of the 2016 Group reorganisation prior to listing and has been reclassified in 2024.
Retained earnings
Retained earnings comprises the Group's cumulative annual profits and losses, including adjustments for equity-settled share-based payments (and related tax), the purchase of shares to be held in treasury, and the credit as a result of the cancellation of the share premium account.
25. Share-based payments
The Group operates a number of share option plans for qualifying employees, both as equity and cash-settled share-based remuneration schemes. Equity-settled options in the plans are settled in equity in the Company.
Equity-Settled Share-based payments
The terms and conditions of the outstanding grants made under the Group's schemes are as follows:
|
|
|
Exercisable between |
|
|
|
|
|
|
Date of grant |
Expected term |
Commencement |
Lapse |
Exercise price |
Vesting schedule |
Amount outstanding at 31 December 2025 |
Amount outstanding at 31 December 2024 |
|
6 April 2017 |
3 |
6 April 2020 |
6 April 2027 |
£0.005 |
1 |
43,950 |
43,950 |
|
6 April 2017 |
6.5 |
6 April 2020 |
6 April 2027 |
£2.844 |
1 |
87,900 |
87,900 |
|
28 September 2017 |
6.5 |
28 September 2020 |
28 September 2027 |
£5.825 |
1 |
13,500 |
13,500 |
|
9 April 2018 |
6.5 |
9 April 2021 |
9 April 2028 |
£10.38 |
1 |
38,084 |
38,084 |
|
4 October 2020 |
3 |
30 April 2023 |
4 October 2030 |
£0.005 |
2 |
76,617 |
76,617 |
|
4 October 2020 |
3 |
30 April 2024 |
4 October 2030 |
£0.005 |
2 |
76,617 |
76,617 |
|
1 December 2022 |
3 |
1 January 2026 |
1 July 2026 |
£2.28 |
3 |
120,227 |
141,715 |
|
19 December 2022 |
3.3 |
31 March 2026 |
19 December 2032 |
£0.005 |
4 |
662,000 |
662,000 |
|
17 May 2024 |
2 |
31 March 2026 |
17 May 2034 |
£0.005 |
5 |
30,000 |
30,000 |
|
18 March 2025 |
3 |
31 March 2028 |
18 March 2035 |
£15.03 |
6 |
342,222 |
- |
|
22 July 2025 |
2.7 |
31 March 2028 |
22 July 2035 |
£15.03 |
6 |
78,000 |
- |
|
22 July 2025 |
3.7 |
31 March 2029 |
22 July 2035 |
£13.60 |
7 |
160,000 |
- |
|
20 October 2025 |
2.4 |
31 March 2028 |
20 October 2035 |
£15.03 |
6 |
70,000 |
- |
|
20 October 2025 |
3.4 |
31 March 2029 |
20 October 2035 |
£13.60 |
7 |
100,000 |
- |
|
|
|
|
|
|
|
1,899,117 |
1,170,383 |
|
Weighted average remaining contractual life of options outstanding |
|
7.0 years |
6.1 years |
||||
The following vesting schedules apply to the options:
1. 100% of options vest on the third anniversary of date of grant.
2. 100% of options have vested on the achievement of a performance condition related to the Group's share price at a pre-determined date.
3. 100% of options vest on the third anniversary of the Save As You Earn ("SAYE") savings contract start date.
4. The level of vesting is dependent on a performance condition, being the Group's EBITDA over a qualifying period. Shares are expected to vest in full.
5. The level of vesting is dependent on a performance condition, being the number of meters owned over a qualifying period.
6. The level of vesting is dependent on performance conditions, being a combination of the Group's EBITDA, the number of meters owned and forward contracted revenue all over a qualifying period.
7. The level of vesting will be based on Group earnings per share secured over the four financial years from FY25 to FY28.
The number and weighted average exercise price of equity-settled share options were as follows:
|
|
2025 Shares |
2024 Shares |
|
Balance at the start of the period |
1,170,383 |
1,533,324 |
|
Granted |
828,000 |
30,000 |
|
Forfeited |
(88,916) |
(114,821) |
|
Lapsed |
- |
- |
|
Exercised |
(10,350) |
(278,120) |
|
Balance at the end of the period |
1,899,117 |
1,170,383 |
|
Vested at the end of the period |
336,668 |
336,668 |
|
Exercisable at the end of the period |
336,668 |
336,668 |
|
Weighted average exercise price for: |
|
|
|
Options granted in the period |
£14.58 |
£0.005 |
|
Options forfeited in the period |
£13.43 |
£0.299 |
|
Options exercised in the period |
£2.28 |
£1.353 |
|
Weighted average share price of exercised shares |
£15.84 |
£17.03 |
|
Exercise price in the range: |
|
|
|
From |
£0.005 |
£0.005 |
|
To |
£15.03 |
£10.38 |
The fair value of each option grant is estimated on the grant date using an appropriate option pricing model. The following fair value assumptions were assumed in the year:
|
|
2025 |
2024 |
|
Dividend yield |
3.3% |
2.4% |
|
Risk-free rate |
3.9% |
4.3% |
|
Share price volatility |
57% |
66% |
|
Weighted average contractual life (years) |
3 years |
2 years |
|
Weighted average fair value of options granted during the period |
£6.11 |
£16.40 |
Cash-Settled Share-based payments
For the cash-settled share scheme, the following information is relevant:
|
Date of grant |
Expected term |
Commencement |
Lapse |
Exercise price |
Vesting schedule |
Amount outstanding at 31 December 2025 |
Amount outstanding at 31 December 2024 |
|
1 January 2024 |
3.3 |
30 April 2027 |
30 May 2027 |
£10.00 |
1 |
149,000 |
174,500 |
|
1 January 2025 |
3.3 |
30 April 2028 |
30 May 2028 |
£10.00 |
1 |
47,000 |
- |
|
|
|
|
|
|
|
196,000 |
174,500 |
|
Weighted average remaining contractual life of options outstanding |
|
1.7 years |
2.4 years |
||||
The following vesting schedules apply to the options:
1. 100% of options vest on the vesting date.
|
|
2025 Options |
2024 Options |
|
Balance at the start of the period |
174,500 |
- |
|
Granted |
47,000 |
240,000 |
|
Forfeited |
(25,500) |
(65,500) |
|
Lapsed |
- |
- |
|
Exercised |
- |
- |
|
Balance at the end of the period |
196,000 |
174,500 |
|
Weighted average exercise price for: |
|
|
|
Options granted in the period |
£10.00 |
£10.00 |
|
Options forfeited in the period |
£10.00 |
£10.00 |
|
Options exercised in the period |
- |
- |
|
Weighted average share price of exercised shares |
- |
- |
The fair value of each option grant is estimated on the grant date using the Black-Scholes option pricing model. The following fair value assumptions were assumed in the year:
|
|
2025 |
2024 |
|
Risk-free rate |
4.19% |
3.5% |
|
Share price volatility |
59% |
60% |
|
Weighted average contractual life (years) |
3.25 years |
3.25 years |
|
Weighted average fair value of options granted during the period |
£11.21 |
£13.03 |
The carrying value of the cash settled share-based payments included within accruals is £0.6m (2024: £0.6m).
The share price volatility assumption in 2025 was based on the actual historical share price of the Group since January 2023.
The total expenses recognised for the year arising from share-based payments are as follows:
|
|
2025 £'m |
2024 £'m |
|
Equity-settled share-based payment expense |
1.9 |
0.9 |
|
Cash-settled share-based payment expense |
- |
0.6 |
|
National Insurance costs related to share options |
0.2 |
2.5 |
|
Total share-based payment charge |
2.1 |
4.0 |
Employer's National Insurance contributions are accrued, where applicable on unapproved (for tax purposes) share options, at the rate of 15% (2024: 13.8% or 15.0%) which management expects to be the prevailing rate at the time the options are exercised.
26. Commitments
Commodity purchase commitments
As disclosed in note 23, the Group has entered into commodity purchase contracts to hedge its exposures to fluctuations in gas and electricity commodity prices which meet the criteria for "own use" and are classified as off-balance sheet arrangements. Such contracts to purchase gas and electricity are set so as to match, to the extent possible, the demand from customers; therefore, they play a significant role in securing the forward expected gross margin on customer contracts which are set at the point of contracting new customers.
As part of the Group's risk mandate, the total commodity purchase contracts at 31 December 2025 amount to £395.6m (2024: £315.0m). Such purchase contracts carry inherent risk to the Group through the value of such contracts, being significant commitment costs, and the potential exposure should customer contracts not cover commitment costs. The Group, however, has a significant contract book in excess of the purchase commitments, which limits the exposure risk, which is considered to be low, given they are underpinned by customer contracts. The benefits to the Group of the commodity purchase contract commitments arises through fixing future commodity costs against contracted revenue where a pre-determined margin and profit are realised.
Capital commitments
The Group has entered into contracts to develop its digital platform as part of the Digital by Default strategy. Such contracts may be terminated with a limited timescale and as such are not disclosed as a capital commitment.
The Group has no other capital commitments at 31 December 2025 (2024: £nil).
Security
The Group has entered into Trading Agreements with the Shell group in February 2024 to provide access to commodity markets. As part of this arrangement, as is common for such structures, there is a requirement to meet certain covenants, a fixed and floating charge (including mandate over certain banking arrangements in the event of default) over the main trading subsidiaries of the Group, being Yü Energy Holding Limited and Yü Energy Retail Limited, and a parent company guarantee from the Company.
As part of the Group's activities in financing smart meters, a Group entity has provided security over smart meter assets in relation to bank debt provided by Siemens Finance.
Yü Group PLC provides parent company guarantees on behalf of its wholly owned subsidiaries to a small number of industry counterparties as is commonplace for the utilities sector.
Contingent liabilities
The Group has no contingent liabilities at 31 December 2025 (2024: £nil) other than those disclosed in note 23.
27. Related parties and related party transactions
Other than remuneration of key management personnel (note 6), the only related party transactions in the period have been between the Company and its subsidiaries, which have been eliminated on consolidation.
In the prior year, the Group has transacted with CPK Investments Limited (an entity owned by Bobby Kalar). The Nottingham office property was sold by CPK Investments Limited to the Group to provide additional flexibility for the Group's property strategy. The consideration paid of £1,709,000 was largely based on an independent valuation of the building, together with an assessment of value of fixtures and fittings acquired. The lease agreement between Yü Energy Retail Limited and CPK Investments Limited was transferred between Group entities and disposed of for the purposes of the consolidated Group accounts. During 2024 the Group paid £92,000 in lease rental and service charges to CPK Investments Limited. There was a net balance of £35,000 owed to the Group from CPK Investments Limited at 31 December 2024, which was settled in full in January 2025.
In 2024 the Company acquired 234,978 ordinary shares, at the then-market rate of £17 per share, via its broker Liberum Wealth Limited. These shares remain in treasury on 31 December 2024. On the same date as the Company's purchase, Paul Rawson (Chief Financial Officer during the period) and a person closely related to him, and two employees of the Group, sold shares through Liberum Capital Limited, of which some such shares were sold at the same market price (less commission).
28. Reconciliation of liabilities arising from financing activities
The changes in the Group's liabilities arising from financing activities can be classified as follows:
|
|
|
Borrowings £'m |
Lease liabilities £'m |
Total £'m |
|
Balance as at 1 January 2024 |
|
0.5 |
1.6 |
2.1 |
|
Cash flows: |
|
|
|
|
|
Drawdown of new borrowings |
|
4.6 |
- |
4.6 |
|
Repayment |
|
(0.3) |
(1.0) |
(1.3) |
|
Non-cash: |
|
|
|
|
|
Recognition of new leases |
|
- |
1.9 |
1.9 |
|
Interest |
|
0.2 |
0.2 |
0.4 |
|
Disposal of lease liabilities |
|
- |
(0.9) |
(0.9) |
|
Balance as at 31 December 2024 |
|
5.0 |
1.8 |
6.8 |
|
Cash flows: |
|
|
|
|
|
Drawdown of new borrowings |
|
5.6 |
- |
5.6 |
|
Repayment |
|
(0.8) |
(1.0) |
(1.8) |
|
Non-cash: |
|
|
|
|
|
Interest |
|
0.5 |
0.1 |
0.6 |
|
Disposal of lease liabilities |
|
- |
- |
- |
|
Balance as at 31 December 2025 |
|
10.3 |
0.9 |
11.2 |
29. Subsidiary audit exemption
The following UK subsidiary undertakings are exempt from the requirements of an audit for the year ended 31 December 2025, under section 479A of the Companies Act 2006.
|
Company name |
Company Number |
|
Yu Water Limited |
09918643 |
|
Yü PropCo Leicester Ltd |
14307346 |
|
Yü PropCo Nottingham Ltd |
15994888 |
|
Yü-Smart Ltd |
12311416 |
|
Yü Services Limited |
11440201 |
|
Yü Innovate Limited |
16742823 |
|
Toucan Energy Limited |
09688876 |
|
ELX Solutions Ltd |
12269209 |
30. Post-balance sheet events
On 13 February 2026:
· the Company has issued 195,926 Ordinary Shares with nominal value of £0.005 per share;
· the Company transferred 113,242 ordinary shares from treasury to settle an exercise of employee share options; and
· the Company acquired 309,168 ordinary shares, at the then-market rate of £19.06 per share via its broker Panmure Liberum Capital Limited and were held in treasury. On the same date, Bobby Kalar (Chief Executive Officer), exercised and agreed to sell options over 309,168 ordinary shares in the Company.
There are no other significant post-balance sheet events.
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