Business utility provider Yu Group says its newly implemented digital sales channel has “exceeded all expectations”, resulting in an £18.6 million increase in annualised revenue in H2 compared to H1.
In a trading update published today (26 January) the group reported £21.5 million of annualised revenue booked in H2 2020.
This was a result of introducing a third-party digital platform in H1, which chief executive Bobby Kalar says represents the company’s shift towards a more digital-first model.
The latest update comes after a reset of the business in 2019, following a poor financial performance the previous year.
Speaking to Utility Week Kalar said domestic energy retail players were proving the switch to digital provides better outcomes for consumers.
He said: “My belief, my ambition, is that using technology to drive customer penetration, to drive customer satisfaction, to reduce cost to serve, to increase competitive nature is what we are all about.
“We had to pause that ambition in order to reset the business and make sure it was realigned. Now that we have done that the delivery of technology and digitisation is at the forefront of where we see that real disruptive nature, that real change that will give us the competitive edge.”
Kalar added that he believes the B2B sector is “still very 1990s” and has got to change.
“The significant thing to note is the big six are no longer the big six and we are seeing very innovative domestic players who are bringing technology, who are bringing the future into the retail supply world and customers are lapping it up.
“Unfortunately, as is always the case, technology is lacking in the B2B sector because of, in my view, the lack of competition and desire to bring something new to what is largely an old school way of operating”, he said.
Kalar further revealed that over the next two years he sees the group moving towards a “much leaner, digitally driven robotics process automation (RPA) business” which provides customers with 24/7 access, driving down costs.
As of 31 December the company was approaching around 18,000 meter points, significantly more than the 8,700 it had in 2019. This is largely a result of acquisitions, including the purchase of Bristol Energy’s B2B customers in August last year.
Overall a record £2.5 billion gas and power business was tendered by the group in 2020.
Revenue was “significantly ahead” of market expectation at more than £100 million (compared to the forecast of £92.5 million).
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for full year 2020 is also expected to be ahead of expectations, despite the impact of Covid. Previously the company forecast a loss of £2.7 million, but this has now decreased to £2.39 million.
Customer volume demand in H2 was at 94 per cent of pre-Covid levels which Yu Group says confirms the strategy to diversify its portfolio is working well.
The business reported record levels of monthly bookings, outperforming its expectations at £10.3 million. Yu Group said it sees the strong sales momentum continuing into this year and is confident it will continue.