Tag: investors

Trading update

12 December 2017

Investors
RNS Number: 0238Z
DRAX GROUP PLC
(Symbol: DRX) 

Trading and Operational Performance

Since publishing its half year results on 19 July 2017, trading conditions in the markets in which Drax operates have remained in line with expectations.

Generation

A major planned outage on the CfD(1) unit was completed in November 2017 and the unit has now returned to service. Both biomass and coal operations are currently performing well.

Retail

Retail operations remain in line with expectations, with the integration of Opus Energy progressing well and continued improvement in profitability at Haven Power.

US biomass self-supply

At the Morehouse and Amite pellet plants, the installation of a further 150K tonnes of capacity – allowing access to incrementally cheaper local wood residues – as part of the previously announced plans to optimise operations, is now complete.

The third pellet plant at LaSalle began commissioning in November 2017, with pellets now being produced and an increase in production scheduled through 2018.

Taking these factors into account and based on good operational availability for the remainder of the year, our expectations remain unchanged.

Contracted Power Sales for 2017 and 2018

As at 7 December 2017, the power sales contracted for 2017 and 2018 were as follows:

20172018
Power sales (TWh) comprising:20.116.8
– Fixed price power sales (TWh)20.115.9
at an average achieved price (per MWh)
at £46.9at £44.1
– Gas hedges (TWh)(2)-0.9
at an achieved price (per therm)
-44.4p

Strategy Update

Drax continues to develop options for 1.2GW of new Open Cycle Gas Turbine (OCGT) capacity, providing peaking power and system support services to the grid. The first two projects – Progress Power and Hirwaun Power – will participate in the next capacity market auction in February 2018. Negotiations for engineering and construction contracts are progressing well, with competitive tenders received from a number of providers.

If developed, these projects would be underpinned by a fifteen year, index-linked capacity market contract, extending earnings visibility into the 2030s.

Drax also continues to develop options for its remaining coal assets, including further low cost biomass and coal-to-gas conversions, the latter of which is progressing through a public planning consultation.

Through these options for growth and improved earnings Drax continues its transformation, helping change the way energy is generated, supplied and used for a better future.

Other matters

As part of its core market focus Drax completed the sale of BBE(3) to AMPH(4) in October 2017. Drax retains an equity holding in AMPH(4).

Drax will announce its full year results for the year ending 31 December 2017 on 27 February 2018.

Enquiries

Drax Investor Relations:

Mark Strafford

+44 (0) 1757 612 491

Media

Drax External Communications

Matt Willey

+44 (0) 1757 612 285

Ali Lewis

+44 (0) 1757 612 165

Website: www.drax.com

Notes:

  1. Contract for Difference.
  2. Structured power sales (and equivalents) include forward gas sales, providing additional liquidity for forward sales, highly correlated to the power market and acting as a substitute for forward power sales.
  3. Billington Bioenergy.
  4. Aggregated Micro Power Holdings.

END

Appointment of new non-executive director

15 November 2017

Investors
RNS Number :5094W
DRAX GROUP PLC
(Symbol: DRX)

The Board of Drax Group plc (“Drax”) is pleased to announce that Nicola Hodson is to be appointed as a Non-Executive Director, with effect from 12 January, 2018.

Nicola served as a Non-Executive Director at Ofgem(1) between January 2015 and July 2017. She is currently Vice President, Global Sales and Marketing, Field Transformation at Microsoft(2), having worked with the company in various roles since 2008, including Chief Operating Officer of its UK business and leading its UK public sector business.

Prior to Microsoft(2) she held senior roles at Siemens, CSC, Ernst & Young and British Nuclear Fuels. She has also been a member of TechUK’s(3) Board since 2012 and was previously a board member of the UK Council for Child Internet Safety (UKCCIS) (4) and the Child Exploitation and Online Protection group (CEOP)(5).

Commenting on the appointment, Philip Cox, Chairman of Drax, said:  “The directors are delighted to welcome Nicola to the Board. Her broad experience gained in the technology, business transformation, energy and consulting sectors, across a range of strategy, marketing and change roles will provide real value as Drax delivers on its strategy to help change the way energy is generated, supplied and used in the UK.”

Nicola added: “The energy sector is changing fast so this is an exciting time to be joining Drax’s Board. I believe Drax is well-placed to grow and support the decarbonisation of the UK economy through low carbon generation and fuel sourcing. I am particularly inspired by the prospect of joining a leading challenger-brand which puts customers at the heart of the business and allows them to maximise the opportunities presented by the emerging energy landscape.”

Nicola has also been appointed as a member of the Company’s Audit, Remuneration and Nomination Committees.

Enquiries:

Drax Investor Relations: Mark Strafford

+44 (0) 1757 612 491

Media:

Drax External Communications: Matt Willey

+44 (0) 1757 612 285

Website: www.drax.com

Notes:

  1. Ofgem is a non-ministerial government department and an independent National Regulatory Authority. Its objective is to protect the interests of electricity and gas consumers by promoting value for money, promoting security of supply and sustainability, supervise markets and competition and regulate government schemes.
  2. Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more.
  3. TechUK is an organisation that represents its 900 members and drives links with Government.
  4. The UK Council for Child Internet Safety (UKCCIS) is a group of more than 200 organisations drawn from across government, industry, law, academia and charity sectors that work in partnership to help keep children safe online.
  5. The Child Exploitation and Online Protection Group (CEOP) works with child protection partners across the UK and overseas to identify the main threats to children and coordinates activity against these threats to bring offenders to account. We protect children from harm online and offline, directly through National Crime Agency led operations and in partnership with local and international agencies.

END

Appointment of Interim Chief Financial Officer

27 October 2017

Investors
RNS Number : 7736U
DRAX GROUP PLC
(Symbol: DRX)

Following the recent announcement that Will Gardiner will succeed Dorothy Thompson as Chief Executive Officer of Drax Group from 1 January 2018, the Board is progressing a process to appoint a permanent Chief Financial Officer (CFO) as soon as practicable.

In the meantime, Den Jones has been appointed as Interim CFO of the Group from 1 November 2017 and will work with Will Gardiner to ensure a smooth transition.

Den was previously CFO of Johnson Matthey, a FTSE 100 specialty chemicals company and has held senior and executive positions, including Interim CFO, in BG Group, a major global energy company. He spent the early part of his career in banking and professional services with Citibank and PwC where he held a number of specialist financial management positions.

Enquiries:

Investor Relations:

Mark Strafford

+44 (0) 1757 612 491

Media:

External Communications:

Ali Lewis

+44 (0) 1757 612165

Website: www.drax.com

END

Will Gardiner to succeed Dorothy Thompson as Chief Executive of Drax Group

21 September 2017

Investors
RNS Number : 3929R
DRAX GROUP PLC
(Symbol: DRX)

Drax Group plc announces that Will Gardiner, currently Group Chief Financial Officer, is to be appointed as Group Chief Executive with effect from 1 January 2018. The appointment results from Dorothy Thompson’s decision to step down after 12 successful years as Group Chief Executive. Dorothy will leave the Group at the end of 2017.

Will joined Drax as Group Chief Financial Officer and a member of the Group Board in November 2015. The Board has kept succession planning well under review and his new appointment comes after a thorough selection process involving internal and external candidates.

Drax Chairman, Philip Cox said: “We are delighted Will is to become Chief Executive. He has been a key architect of our new strategy and is a focused, innovative and engaging leader. His appointment is a natural progression after two years working alongside Dorothy developing an ambitious strategy which I am confident will create significant benefits for all Drax’s stakeholders.

“On behalf of the Board I would like to thank Dorothy for her enormous contribution to Drax. She transformed the business during her tenure and leaves the Group in a strong position with a clear strategy that lays the foundations for further success in a changing energy sector.”

Will Gardiner said: “I am thrilled to be appointed as Group Chief Executive at this exciting time for Drax. The changes we are seeing in the UK energy sector are unprecedented and we have an opportunity to thrive while doing the right thing for the UK energy market. Drax’s people have demonstrated repeatedly their ability to deliver transformational change and I’m delighted to be working with them to build on Dorothy’s strong legacy.”

Dorothy Thompson said: “Drax Group plays a strategic role in the UK electricity sector generating around 16% of UK renewable electricity, is a world leader in the production of wood pellets and is a leading challenger brand in the supply of electricity to businesses. I retire knowing the Group is in excellent shape: it has the right strategy, the right team and in Will, the right leader.”

The Board will now commence a process to appoint a new Group Chief Financial Officer and will also review the option to make an appointment on an interim basis. 

No other disclosure obligations arise under paragraphs (1) to (6) of LR 9.6.13 R of the UK Listing Authority’s Listing Rules in respect of Will Gardiner’s appointment as Chief Executive of Drax Group plc.

Enquiries:

Drax Investor Relations:

Mark Strafford

+44 (0) 1757 612 491

+44 (0) 7730 763 949

Media:

Drax External Communications:

Matt Willey

+44 (0) 1757 612 285

+44 (0) 7711 376 087

Website: www.drax.com

Notes:

Will Gardiner joined Drax in November 2015 as Group Chief Financial Officer and a member of the Group Board. He is currently responsible for Finance, Strategy, and IT Systems.

Prior to joining Drax Will was Chief Financial Officer of CSR plc, a global semiconductor business.  He had previously been a Divisional Finance Director of BSKYB and Chief Financial Officer of Easynet Group plc.

At both CSR and Easynet Will’s focus was on driving transformational change to take advantage of new market opportunities. He is also a non-executive member on the Board of Qardio plc, a wireless medical devices company. Will is also a Trustee of the Institute for War & Peace Reporting, a London-based charity that supports local journalists and civic activists in areas of crisis and change around the world.

Will graduated from Harvard University with a BA Magna Cum Laude in Russian and Soviet Studies and from Johns Hopkins University with an MA in International Relations. He spent the early part of his career in corporate finance with Citibank and JP Morgan.

END

Half year results for the six months ended 30 June 2017

19 July 2017

Investors
RNS Number : 4383L
Drax Group PLC
(Symbol: DRX)

Six months ended 30 June

H1 2017

H1 2016

Key financial performance measures

EBITDA (£ million)

121

70

Underlying earnings (£ million)

9

17

Underlying earnings per share (pence)

2.2

4.2

Total dividends (pence per share)

4.9

2.1

Net cash from operating activities (£ million)

197

151

Net debt (£ million)

372

85

Statutory accounting measures

(Loss) / profit before tax (£ million)

(83)

184

Reported basic (loss) / earnings per share (pence)

(17)

37

 

Financial and Operational Highlights

  • EBITDA of £121 million, an increase of £51 million on H1 2016
    • Strong operational performance
    • Improved earnings from renewable generation
    • Profitable and growing business to business (B2B) retail operation – Opus Energy and Haven Power
  • Statutory loss before tax includes unrealised losses related to foreign currency hedging of £65 million
  • Strong cash flows and balance sheet
    • Refinancing complete and capital allocation policy confirmed
  • Interim dividend of £20 million, representing 40% of the expected full year – £50 million

Strategic Highlights and Outlook

  • Focus on higher quality earnings with targeted investment in long-term growth opportunities
  • Good progress with strategic initiatives
    • Opus Energy and LaSalle Bioenergy acquisitions completed H1 2017, integration proceeding well
    • Focus on research and innovation, including development of options for future generation
  • Maintaining operational excellence across the Group
  • 2017 expectations unchanged, including c.2x net debt to EBITDA at year end

Dorothy Thompson, Chief Executive of Drax Group plc, said:

“We have made good progress with our strategy during the first half of 2017, acquiring Opus Energy and a third compressed wood pellet plant, in addition to refinancing and implementing a new dividend policy.

“Central to our strategy is the delivery of targeted growth through deploying our expertise across our markets and, in so doing, diversifying, growing and improving the quality of earnings whilst reducing exposure to commodity market volatility.

“Delivering reliable renewable electricity remains at the heart of our business. We continue to produce at record levels, helping to keep the UK’s electricity system secure and supplying our customers through our retail business. With the right conditions, we can do even more. We are progressing our four new rapid response gas power projects and our research and innovation work has identified potentially attractive options to repurpose our remaining coal assets.

“We continue to play a vital role in the UK’s energy infrastructure and our strategy is helping to change the way energy is generated, supplied and used for a better future.”

NOTES FOR ANALYSTS AND EDITORS

See: https://otp.tools.investis.com/clients/uk/drax1/rns/regulatory-story.aspx?cid=1607&newsid=892848

Directorate change – appointment of new non-executive director 

Investors
RNS Number : 4386L
Drax Group PLC
(Symbol: DRX)

David is Chief Executive of The Elders who he joined in October 2016.  The Elders is an independent group of global leaders working together for peace, justice and human rights, founded by Nelson Mandela in 2007.

Prior to that he was Chief Executive of the World Wide Fund for Nature UK (WWF-UK) from 2007 and chaired WWF’s Global Climate and Energy Initiative. He is also currently Non-Executive Chair of Transparency International UK, and a member of the Board of the International Integrated Reporting Council.

David originally qualified as a chartered accountant with Price Waterhouse, moved into venture capital with 3i, and then into manufacturing, latterly as Finance Director of Field Group plc through its management buyout and subsequent successful flotation in 1993. He joined Oxfam in 1997 as Finance Director and Deputy Chief Executive and was later seconded to head up Oxfam’s operations in India. In 2002 David joined Transparency International, the leading global anti-corruption organisation, as Chief Executive based in Berlin.

David has two degrees in theology, one in finance, and an honorary doctorate.

Commenting on the appointment Philip Cox, Chairman of Drax, said:  

“The directors are delighted to welcome David to the Board of Drax. His experience and expertise will be a valuable addition to the Board and will further help the successful delivery of our sustainability agenda.”

David Nussbaum added:

“The provision of sustainably generated power is crucial as we continue the transition to a low carbon future.  I look forward to joining the Board of Drax as the business develops, continuing to meet the challenges this presents, and make my contribution to it doing so successfully.”

David has also been appointed as a member of the Company’s Audit, Nominations and Remuneration Committees.

Notes to editors:

  • The Elders was founded by Nelson Mandela in 2007 following an initial proposal by Richard Branson and Peter Gabriel, and the current Chair is Kofi Annan. 
  • The Elders work collectively, combining private diplomacy with public advocacy to promote ethical leadership, defend human rights and amplify the voices of the downtrodden and marginalised.
  • The World Wide Fund for Nature (WWF) is an international non-governmental organisation founded in 1961, working to create a world where people and nature thrive within the means of our one planet.

Enquiries:

Drax Investor Relations: Mark Strafford

+44 (0) 1757 612 491

Media:

Drax External Communications: Paul Hodgson

+44 (0) 1757 612 026 

Website: www.drax.com

END

 

Chief Executive comments on half year results

Dorothy Thompson, (2005-2017 Chief Executive, Drax Group)

Investors

We have made good progress with our strategy during the first half of 2017, acquiring Opus Energy and a third compressed wood pellet plant, in addition to refinancing and implementing a new dividend policy.

Central to our strategy is the delivery of targeted growth through deploying our expertise across our markets and, in so doing, diversifying, growing and improving the quality of earnings whilst reducing exposure to commodity market volatility.

Delivering reliable renewable electricity remains at the heart of our business. We continue to produce at record levels, helping to keep the UK’s electricity system secure and supplying our customers through our retail business. With the right conditions, we can do even more. We are progressing our four new rapid response gas power projects and our research and innovation work has identified potentially attractive options to repurpose our remaining coal assets.

We continue to play a vital role in the UK’s energy infrastructure and our strategy is helping to change the way energy is generated, supplied and used for a better future.

Related documents:

 

Capital Markets Event and Trading Update

15 June 2017

Investors
RNS Number : 1264I
Drax Group PLC
(Symbol: DRX)

Capital markets event

Drax is today hosting a capital markets event for investors and analysts.

The event will provide an update on the Group’s strategy, outlining a plan for 2025 EBITDA in excess of £425(1) million – more than a third of which is expected to come from Retail (>£80 million) and Biomass Supply (>£75 million) operations. This will be delivered by maximising the opportunities from the existing portfolio of assets and targeted value creative investment in long-term growth opportunities, underpinned by a robust financial model and capital allocation plan.

The event will provide further insight into the Group’s three areas of operation and how these support the strategy:

Retail – an annuity-like income stream with profitable SME(2)and I&C(3) businesses; 

Generation – visible biomass earnings, flexible operations, the development of options for rapid response gas and long-term opportunities to repurpose coal assets; and

Biomass Supply – lower cost, good quality pellets, with visible earnings and the capacity to provide at least 30 per cent of the Group’s fuel requirements.

These activities are underpinned by safety, sustainability, operational excellence and expertise in our markets. Drax is committed to using research and innovation to help reduce supply chain costs, identify new long-term opportunities and to maximise value across the Group.

The event will be led by Dorothy Thompson, Group CEO, supported by the senior management team from across the business.

Dividend policy and capital allocation

Following discussion with shareholders, Drax today announces a new dividend policy.

Drax expects to pay a growing dividend consistent with maintaining its credit rating and investing in its business.

Drax expects to recommend a dividend of £50m with regards to the 2017 financial year. The Board is confident that this dividend is sustainable and expects it to grow from this level as the implementation of the strategy generates an increasing proportion of stable earnings and cash flow. In determining the rate of growth in dividends the Board will take account of future investment opportunities and the less predictable cash flows from the Group’s commodity-based businesses.

If there is a build-up of capital in excess of the Group’s investment needs the Board will consider the most appropriate mechanism to return this to shareholders.

Dorothy Thompson said:

“Britain’s energy market is changing. Drax has embraced these changes with a strategy which will help change the way energy is generated, supplied and used for a better future.

“Through our operations in retail, generation and biomass supply we expect to deliver a significant increase in high quality, visible, contracted earnings for the Group.

“With the optimisation of our existing asset portfolio combined with acquisitions across our markets the strategy is already delivering, allowing the Group to create long-term opportunities in all areas of the business.

“We are confident in the strategy and our ability to deliver high quality earnings, growth and value for shareholders, supported by a strong financial model and clear capital allocation policy, including a sustainable dividend that we expect to grow from a level of £50m in 2017.” 

Trading and Operational Performance

Since publishing our full year results on 16 February 2017, trading conditions in the markets in which we operate have remained unchanged and operational performance has been good.

These factors underpin our expectations for full year EBITDA(4), which remain unchanged.

Capital markets webcast and presentation material

The event will be webcast from 9.30am and the material made available on the Group website at the same time. Joining instructions for the webcast and presentation are included in the links below.

https://cache.merchantcantos.com/webcast/webcaster/4000/7464/16531/90093/Lobby/default.htm

https://www.drax.com/investors/capital-markets-day/

Notes:

(1)   Three business areas, including an assumed central cost, based on £21mactual in 2016.

(2)   Small and Medium-sized Enterprise.

(3)   Industrial and Commercial.

(4)   EBITDA is defined as profit before interest, tax, depreciation, amortisation and unrealised gains and losses on derivative contracts.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Enquiries:

Drax Investor Relations:

Mark Strafford

+44 (0) 1757 612 491

+44 (0) 7730 763 949 

Media:

Brunswick:

Simon Maine

Mike Smith

+44 (0) 207 404 5959

Drax External Communications:

Paul Hodgson

+44 (0) 1757 612 026

Website: www.drax.com

Chief Executive comments on capital markets event and trading update

Dorothy Thompson, (2005-2017 Chief Executive, Drax Group)

Investors

Britain’s energy market is changing. Drax has embraced these changes with a strategy which will help change the way energy is generated, supplied and used for a better future.

Through our operations in retail, generation and biomass supply we expect to deliver a significant increase in high quality, visible, contracted earnings for the Group.

With the optimisation of our existing asset portfolio combined with acquisitions across our markets the strategy is already delivering, allowing the Group to create long-term opportunities in all areas of the business.

We are confident in the strategy and our ability to deliver high quality earnings, growth and value for shareholders, supported by a strong financial model and clear capital allocation policy, including a sustainable dividend that we expect to grow from a level of £50m in 2017.

Further information:

Capital markets day and trading update

Image: Artist’s impression of a Drax rapid-response gas power station with planning permission