AIM-listed Yu Group (YU.) has posted its much awaited results for the year to December 2018 – much awaited because during the year it ‘fessed up that its previous numbers had been less than believable. The opening lines make good reading – and the market has reacted well, marking the stock up by a whopping 67%, last seen, to 155p but I wonder about that.
Shares in Yu Group (YU.) have been slipping for a few days, and today they are off by 13.5% at just 75p bid, 85p offer. Of course, we already know that it was making up its numbers until the appointment of the new FD and the bean-counters have been crawling all over the company since then…..as has the FCA. A few days ago the stock was at around 120p, so why the drop?
Sometimes a company issuing options can have a positive spin. Think Big Sofa (BST) under the new management of Kirsty Fuller, having ‘fessed up the uselessness of the previous regime and where options were handed out at 3.5p but only exercisable if the shares clear the 6p mark.
As Tom Winnifrith said in his Bearcast on Wednesday, Yu Group (YU.) offered numbers in its latest trading statement which are completely meaningless – and thus its net cash position could be anything. I’ve been trying to piece some of it together.
Supplier of gas, electricity and water to businesses, Yu Group (YU.) has updated on 2018, including ‘confirming’ some prior guidance and CEO Bobby Kalar emphasising “with a strong balance sheet and a focussed and dedicated workforce, I remain confident in the underlying business, the significant market opportunity available to us, and the long term success of our proposition and I am absolutely driven to put us back on track”. The shares have responded currently more than doubling, to above 150p. Hmmm…
And so at last we have the results of the forensic accounting review which followed the confession from AIM-listed Yu Group (YU.) on 24 October 2018 that its accounts were, in effect, a work of sheer fiction and has seen the company’s £12 million placing at £10 per share being investigated by the FCA. We already knew that the bill would be around £10 million – but now it is going to be around £13 million. As ever, the ShareProphets RNS Translation Service is on hand to help us understand all this (original in bold).
On Monday I wondered out loud what was happening about the forensic investigation into various accounting matters – including accrued income recognition and impairment of trade debtors at Yu Group (YU.). Then there was the small matter of a £12 million placing on the back of FY17 accounts which now appear to be somewhat questionable. Well blow me down with a feather: now the FCA has notified the company that it intends to conduct an investigation and the shares (which I called a bargepole of the highest order on the initial ‘fessing up of 24th October) have now fallen below half of the IPO price of March 2016.
Back on 24th October, AIM-listed Yu Group (YU.) issued a devastating RNS regarding accrued income recognition, impairments of trade debtors and the shares collapsed 80%. Then on 5th November the company announced that it had appointed PWC and DLA Piper to carry out independent forensic investigations and promised to update the market in due course. So how about that update?
AIM-listed Yu Group (YU.) only joined the Casino back in March 2016, via a placing at 185p. Since then it has been a one-way street for shareholders, with the stock rising to a peak of over £14 in March of this year. And then the Finance Director resigned…..
