Shares in gas, electricity and water supplier Yu Group (YU.:AIM) have soared off the back of its latest profit upgrade (31 May). The shares gained more than a third in the wake of the announcement to 676p, extending gains over the last six months to nearly 70%.

The company, which endured a big sell-off in 2018 thanks to accounting issues, aims to provide a one-stop-shop utilities service for UK small and medium-sized enterprises.

Yu reported that the run-rate of average monthly bookings seen in the fourth quarter of 2022 has continued into 2023. This has been supported by pent-up demand from falling energy prices and has increased visibility on future revenue.

Investment in its ‘Digital by Default’ strategy and in smart meters has helped reduce levels of bad debt and driven strong cash generation such that revenue, margins and cash flow for 2023 are expected to be ‘substantially’ ahead of expectations.

Broker SP Angel lifted its revenue forecasts for 2023 and 2024 by 17.1% and 10.2% respectively to £392.4 million and £447.3 million and notes the company is on track to achieve its target of £500 million in revenue by the end of 2025.

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