Yü Group PLC (LON:YU.) Is Expected To Breakeven In The Near Future

With the business potentially at an important milestone, we thought we'd take a closer look at Yü Group PLC's (LON:YU.) future prospects. Yü Group PLC, through its subsidiaries, supplies energy and utility solutions to small and medium-sized enterprises, and corporate customers in the United Kingdom. The UK£48m market-cap company announced a latest loss of UK£1.2m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which Yü Group will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Yü Group

According to some industry analysts covering Yü Group, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of UK£694k in 2022. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 99% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Yü Group given that this is a high-level summary, though, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Yü Group which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Yü Group, take a look at Yü Group's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:

1. Valuation: What is Yü Group worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Yü Group is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Yü Group’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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