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Mailing of the Annual Report and Accounts 2019, Annual General Meeting and key dates relating to the proposed final dividend
RNS: 7279G
Drax Group plc
(“Drax” or the “Company”; Symbol:DRX)
Mailing of the Annual Report and Accounts 2019 and ancillary documents to shareholders
The following documents have been mailed to the registered shareholders of Drax Group plc:
- Annual Report and Accounts 2019;
- Notice of the 2020 Annual General Meeting; and
- Form of Proxy for the 2020 Annual General Meeting.
In accordance with Listing Rule 9.6.1 a copy of each of these documents will shortly be available for viewing on the National Storage Mechanism.
The Annual Report and Accounts 2019 and the Notice of the 2020 Annual General Meeting will also shortly be available as follows:
- for viewing on the Company’s website, www.drax.com; and/or
- by writing to the Company Secretary at the Registered Office; Drax Power Station, Selby, North Yorkshire YO8 8PH.
Annual General Meeting
The Company is to hold its Annual General Meeting (AGM) at 11.30am on Wednesday 22 April 2020, at Grocers’ Hall, Princes Street, London EC2R 8AD.
We are monitoring the potential impact of COVID-19 on the arrangements for the AGM. We expect to hold our AGM at the venue stated above and are encouraging all shareholders to vote in advance of the meetings using the proxy facilities set out in the Notice of Meeting. We will update shareholders in the event that alternative arrangements prove to be necessary.
Key dates relating to the proposed final dividend
Detailed below are the key dates regarding the proposed final dividend:
- 23 April 2020 – ordinary shares marked ex-dividend.
- 24 April 2020 – record date for entitlement to the dividend.
- 15 May 2020 – payment date for the dividend.
The proposed rate of the final dividend is 9.5 pence per share.
Brett Gladden
Company Secretary
Notice of Annual General Meeting [PDF]
Annual report and accounts 2019 [PDF]
Capacity Market agreements for existing assets
RNS: 3530F
Drax Group plc
(“Drax” or the “Company”; Symbol:DRX)
Drax confirms that it has provisionally secured agreements to provide a total of 2,562MW of capacity (de-rated 2,333MW) from its existing gas, pumped storage and hydro assets(1). The agreements are for the delivery period October 2023 to September 2024, at a price of £15.97/kW(2) and are worth £37 million in that period. These are in addition to existing agreements which extend to September 2023.
Drax did not accept an agreement for the 60MW Combined Cycle Gas Turbine (CCGT) at Blackburn Mill.
A new-build CCGT at Damhead Creek and four new-build Open Cycle Gas Turbine projects participated in the auction but exited above the clearing price and did not accept agreements.
Enquiries:
Drax Investor Relations: Mark Strafford
+44 (0) 7730 763 949
Media:
Drax External Communications: Ali Lewis
+44 (0) 7712 670 888
Website: www.drax.com
Notes:
- Existing assets – gas (Damhead Creek, Rye House, Shoreham and three existing small gas turbines at Drax Power Station), Cruachan Pumped Storage and the Galloway hydro scheme (Tongland, Kendoon and Glenlee).
- Capacity Market agreements stated in 2018/19 real-terms, with payments indexed to UK CPI.
END
Full year results presentation [PDF]
https://www.drax.com/wp-content/uploads/2020/02/Drax-2019-FYR-Analyst-Presentation-27-February.pdf
Full year results [PDF]
https://www.drax.com/wp-content/uploads/2020/02/Drax-2019-FYR-27-February-2019.pdf
Full year results for the twelve months ended 31 December 2019
Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)
RNS Number : 2763E
Twelve months ended 31 December | 2019 | 2018 |
---|---|---|
Key financial performance measures | ||
Adjusted EBITDA (£ million) (1)(2) | 410 | 250 |
Net cash from operating activities (£ million) | 413 | 311 |
Net debt (£ million) (3) | 841 | 319 |
Total dividends (pence per share) | 15.9 | 14.1 |
Adjusted basic earnings per share (pence) (1) | 29.9 | 10.4 |
Total financial performance measures | ||
Operating profit (£ million) | 62 | 60 |
Profit after tax (£ million) | 1 | 20 |
Basic earnings per share (pence) | 0.1 | 5 |
Financial highlights
- Group Adjusted EBITDA up 64 percent to £410 million (2018: £250 million)
- Includes £114 million from acquired hydro and gas generation assets (2019 guidance of £90-110 million)
- Strong cash generation and balance sheet
- Net cash from operating activities up 33 percent to £413 million (2018: £311 million)
- 9x net debt to Adjusted EBITDA adjusted to reflect Capacity Market payments received in January 2020
- Refinancing of hydro and gas generation assets acquisition facility completed, includes ESG CO2-linked facility and infrastructure private placement extending to 2029 – interest rates below three percent
- Sustainable and growing dividend up 13 percent to 15.9 pence per share (2018: 14.1 pence per share)
- Final dividend of 9.5 pence per share (2018: 8.5 pence per share)
Operational highlights
- Reduction in US self-supply pellet cost – $161/tonne(4) (2018: $166/tonne(4))
- Strong system support performance – 63 percent increase in value from flexibility(5) – £129 million (2018: £79 million)
- Integration of acquired hydro and gas generation assets complete
- 47 percent reduction in reported carbon emissions – 2.4Mt(6) (2018: 4.5Mt(6))
Progress with strategic initiatives – building a long-term future for sustainable biomass
- Clear plan to reduce US costs and expand capacity – $35/t (£13/MWh(7)) saving on 1.85Mt by 2022
- Targeting five million tonnes of self-supply at £50/MWh(7) by 2027 from expanded sources of sustainable biomass
- BECCS(8) – development of technology options – proven and emerging technology options for at-scale carbon negative generation at Drax Power Station
- End of coal operations will support further reduction in CO2 emissions and lower cost operating model for biomass
Outlook – 2020
- Strong contracted forward power sales of 15.8TWh at £53.9/MWh and high proportion of non-commodity revenues
- Evaluating attractive investment options for growth: biomass cost reduction and capacity expansion
Will Gardiner, CEO of Drax Group said:
“Drax has delivered a strong set of full-year results following the successful integration of new hydro and gas generation assets and made good progress with its strategic initiatives to build a long-term future for sustainable biomass and be the leading provider of power system stability. Drax achieved these results while still delivering a 47 percent reduction in its carbon emissions compared with the previous year.”
“And today, Drax has also taken a significant step towards its ambition to be carbon negative by 2030 and help the UK achieve its net zero target by ending coal generation ahead of the Government’s target.
“This moves Drax and the UK closer to meeting their climate targets, while continuing to provide the flexible and reliable renewable power that millions of British homes and businesses rely on.
“Drax remains fully committed to the regions where it operates and with the right regulatory and investment framework is well positioned to deliver its plans for Yorkshire and the Humber. Using bioenergy with carbon capture and storage at Drax would anchor a new zero carbon cluster that could help protect thousands of jobs and create new opportunities for clean growth in the north and throughout the UK.”
Operational review
Pellet Production – focus on capacity expansion with good quality pellets at lowest cost
- Adjusted EBITDA up 52 percent to £32 million (2018: £21 million)
- Pellet production up four percent to 1.41Mt (2018: 1.35Mt)
- Cost of production down three percent to $161/tonne(4) (2018: $166/tonne(4))
- Weather-affected forestry activities in H1 leading to reduced low-cost input fibre, offset by cost reduction initiatives and stronger output in H2
- Delivering a programme of cost reduction initiatives – targeting $35/t (£13/MWh(7)) on 1.85Mt by 2022
- Projects delivered in 2019 with further benefits in 2020
- LaSalle Bioenergy – improved rail infrastructure, woodyard decommissioning and sawmill co-location
- Ongoing saving from 2018 relocation of HQ from Atlanta to Monroe
- Savings from projects to be delivered in 2020-2022
- 0.35Mt capacity expansion (LaSalle, Morehouse and Amite), sawmill co-locations and woodyard decommissioning (Morehouse and Amite), increased use of dry shavings, improved logistics and other operational enhancements
Power Generation – flexible, low-carbon and renewable generation
- Adjusted EBITDA up 76 percent to £408 million (2018: £232 million)
- £114 million of Adjusted EBITDA from acquired hydro and gas generation assets (guidance of £90-110 million)
- Strong system support performance – 63 percent increase in value from flexibility(5) to £129 million (2018: £79 million)
- Good commercial availability across the portfolio – 88 percent (2018: 87 percent)
- £78 million of Capacity Market agreements (2018: £6 million) following re-establishment of the market
- Biomass output (net sales) down three percent to 13.4TWh (2018: 13.8TWh)
- H1 – ROC(9) generation reprofiled to reflect weather-affected US biomass supplies
- H2 – record biomass output in November and December 2019 reflecting excellent operational availability
- Coal – Four percent of portfolio generation but with incremental value from buy back of forward power sales
- Gas – Damhead Creek restricted hours ahead of inspection and Shoreham interim inspection brought forward
Customers – growth in margin per MWh and customer meters
- Adjusted EBITDA of £17 million (2018: £28 million)
- 2019 includes £8 million of restructuring costs (£6 million exceptional item in 2018)
- Growth in gross profit per MWh – focus on customer value over volume (MWh) – £6.7/MWh vs. 6.6/MWh
- Six percent growth in customer meters to 419,000 (2018: 396,000)
- Improvement in bad debt charge – £18 million (2018: £31 million)
- Investment in restructuring to drive future earnings growth
Other financial information
- Tax rate benefits from Patent Box claims – corporation tax of 10% on profits arising from investment in innovation
- Capital investment of £172 million
- Includes 0.35Mt of new low-cost US pellet capacity (£10 million in 2019 and £40 million in 2020)
- Net debt of £841 million, including cash and cash equivalents of £404 million (31 December 2018: £289 million)
- 1.9x net debt to Adjusted EBITDA adjusted to reflect receipt of Capacity Market payments in January 2020
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