Tag: investors

Satisfaction / waiver of conditions in relation to the proposed acquisition of Pinnacle Renewable Energy Inc.

7 April 2021

Investors

RNS Number : 6420U
Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)

On 8 February 2021, Drax announced that it had entered into an agreement to acquire the entire issued share capital of Pinnacle Renewable Energy Inc. (the “Acquisition”). On 31 March 2021, Drax announced that the Acquisition had been approved by Drax Shareholders at the General Meeting and Pinnacle announced that the Acquisition had been approved by Pinnacle Shareholders.

Drax is pleased to announce that on 6 April 2021 the Supreme Court of British Columbia granted the Final Order. All of the conditions to the Completion of the Acquisition have now been satisfied or waived (other than conditions which can only be satisfied at Completion) and Completion is expected to occur on 13 April 2021.

Capitalised terms used but not defined in this announcement have the meanings given to them in the Circular.

Enquiries:

Drax Investor Relations: Mark Strafford

+44 (0) 7730 763 949

Media:

Drax External Communications: Ali Lewis

+44 (0) 7712 670 888

Results of General Meeting

31 March 2021

Investors

RNS Number : 1936U
Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)

Drax is pleased to announce the results of its General Meeting held today, Wednesday 31 March 2021.

No.ResolutionVotes For%Votes Against%Votes Total (not including withheld)Votes Withheld
1.To approve the acquisition of the entire issued share capital of Pinnacle Renewable Energy Inc.318,727,66499.99%20,7440.01%318,748,40895,895

The resolution was passed.

Completion of the acquisition is expected to occur in April 2021, subject to the satisfaction or waiver of the final outstanding conditions.

The number of shares in issue is 411,732,605 (of which 13,841,295 are held in treasury. Treasury shares don’t carry voting rights).

Votes withheld are not a vote in law and have not been counted in the calculation of the votes for and against the resolution, the total votes validly cast or the calculation of the proportion of issued share capital voted.

A copy of the resolution is available for inspection in the Circular, which was previously submitted to the Financial Conduct Authority’s National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

The Circular and the voting results are also available on the Company’s website at www.drax.com/uk.

Capitalised terms used but not defined in this announcement have the meanings given to them in the Circular.

Enquiries:

Drax Investor Relations: Mark Strafford

+44 (0) 7730 763 949

Media:

Drax External Communications: Ali Lewis

+44 (0) 7712 670 888

Publication of Circular and Notice of General Meeting in relation to proposed acquisition of Pinnacle Renewable Energy Inc.

12 March 2021

Investors

RNS Number : 1426S
Drax Group PLC
(Symbol: DRX)

On 8 February 2021, Drax announced that it had entered into an agreement to purchase Pinnacle Renewable Energy Inc. (the “Acquisition”).

Drax is pleased to announce that a Circular in relation to the Acquisition (the “Circular”) has been published.

The Acquisition is subject to the approval of the shareholders of the Company and, accordingly, the Circular contains a notice convening a general meeting of the Company to be held at Opus Energy House, 8-10 The Lakes, Northampton NN4 7YD, UK at 4:30 pm on 31 March 2021. In light of COVID-19 restrictions and current prohibitions on public gatherings, attendance at the general meeting shall be restricted and therefore shareholders are strongly encouraged to vote electronically or to vote by proxy.

The Company will be accepting shareholders’ questions for the general meeting via the facility on the Company’s website at https://www.drax.com/uk/investors/disclaimer-proposed-acquisition-of-pinnacle-renewable-energy-inc-by-drax. The deadline for submitting questions is 5:00pm on 19 March 2021. The Company will look to post answers to questions received on the Company’s website.

The Circular, which has been produced in accordance with the Listing Rules and approved by the Financial Conduct Authority, will shortly be available on the Company’s website at www.drax.com/uk. In accordance with Listing Rule 9.6.1, a copy of the Circular has been submitted to the National Storage Mechanism and will be available shortly at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. Printed copies of the Circular will be posted to shareholders who have elected to receive them.

Enquiries:

Drax Investor Relations: Mark Strafford

+44 (0) 7730 763 949

Media:

Drax External Communications: Ali Lewis

+44 (0) 7712 670 888

Royal Bank of Canada (Financial Adviser, Sponsor and Joint Corporate Broker):

+44 (0) 20 7653 4000

James Agnew Peter Buzzi Mark Rushton Evgeni Jordanov Jonathan Hardy Jack Wood

Important notice

The contents of this announcement have been prepared by and are the sole responsibility of Drax Group plc (the “Company”).

RBC Europe Limited (“RBC”), which is authorised by the Prudential Regulation Authority (the “PRA”) and regulated in the United Kingdom by the Financial Conduct Authority (“FCA”) and the PRA, is acting exclusively for the Company and for no one else in connection with the Acquisition, the content of this announcement and other matters described in this announcement and will not regard any other person as its clients in relation to the Acquisition, the content of this announcement and other matters described in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing advice to any other person in relation to the Acquisition, the content of this announcement or any other matters referred to in this announcement.

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company or in any entity discussed herein, in any jurisdiction nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract commitment or investment decision in relation thereto nor does it constitute a recommendation regarding the securities of the Company or of any entity discussed herein.

RBC and its affiliates do not accept any responsibility or liability whatsoever and make no representations or warranties, express or implied, in relation to the contents of this announcement, including its accuracy, fairness, sufficient, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with the Acquisition and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. RBC and its respective affiliates accordingly disclaim to the fullest extent permitted by law all and any responsibility and liability whether arising in tort, contract or otherwise which it might otherwise be found to have in respect of this announcement or any such statement.

Each of the Company, RBC and their respective affiliates expressly disclaim any obligation or undertaking to supplement, amend, update, review or revise any of the forward looking statements made herein, except as required by law.

You are advised to read this announcement and the circular in their entirety for a further discussion of the factors that could affect the Company and its group and/or, following completion, the enlarged group’s future performance. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.

Neither the content of the Company’s website (or any other website) nor any website accessible by hyperlinks on the Company’s website (or any other website) is incorporated in, or forms part of, this announcement.

Capacity Market Agreements

11 March 2021

Investors
Cruachan pylons

Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)
RNS Number : 8747R

T-4 auction – provisional results for existing pumped storage and hydro assets

Drax confirms that it has provisionally secured agreements to provide a total of 617MW of capacity (de-rated 582MW) principally from its pumped storage and hydro assets(1). The agreements are for the delivery period October 2024 to September 2025, at a price of £18/kW(2) and are worth around £10 million in that period. These are in addition to existing agreements which extend to September 2024.

T-4 auction – provisional results for new build system support assets

Drax confirms that it has provisionally secured 15-year agreements for three new 299MW (de-rated 284MW) Open Cycle Gas Turbine (OCGT) projects at sites in England and Wales(3). The agreements are for the delivery period October 2024 to September 2039, at a price of £18/kW(2) and are worth around £230 million in that period.

Artist’s impression of a Drax rapid-response gas power station (OCGT)

Artist’s impression of a rapid-response gas power station (OCGT)

These assets are intended to operate for short periods of time to meet specific system support needs. As the UK transitions towards a net zero economy, it will become increasingly dependent on wind generation and as such, fast response system support technologies such as these OCGTs are increasingly important to the energy system as a means to enable more wind to run more often and more securely.

The total capital cost of these projects is approximately £80-90 million each, with a build time of around two years.

A further OCGT project participated in the auction but exited above the clearing price and did not accept an agreement.

Drax will now evaluate options for all four OCGT projects including their potential sale.

Continued focus on biomass strategy and the development of negative emissions

In December 2019 Drax announced an ambition to become a carbon negative company by 2030 using Bioenergy Carbon Capture and Storage (BECCS) and the Group remains focused on its biomass strategy. In January 2021 Drax completed the sale of its Combined Cycle Gas Generation (CCGT) assets and in March 2021 ends commercial coal generation. Drax believes that its remaining portfolio of sustainable biomass, pumped storage and hydro will be amongst the lowest carbon generation portfolios in Europe.

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/uk

Full year results for the twelve months ended 31 December 2020

25 February 2021

Investors
Water outlet into Loch Awe from Cruachan Power Station

Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)
RNS Number : 2751Q

Twelve months ended 31 December20202019
Key financial performance measures
Adjusted EBITDA (£ million) (1)(2)412410
Continuing operations366371
Discontinued operations – gas generation4639
Cash generated from operations (£ million)413471
Net debt (£ million) (3)776841
Adjusted basic EPS (pence) (1)29.629.9
Total dividend (pence per share)17.115.9
Total financial performance measures
Coal and other asset obsolescence charges(239)-
Operating (loss) / profit (£ million)(156)48
Loss before tax (£ million)(235)(16)

Financial highlights

  • Adjusted EBITDA from continuing and discontinued operations up £2 million to £412 million (2019: £410 million)
    • Includes estimated impact of Covid-19 of around £60 million, principally SME customers
    • Strong performance in Pellet Production and Generation
  • Strong cash generation and balance sheet
    • 1.9 x net debt to Adjusted EBITDA, with £682 million of cash and committed facilities at 31 December 2020
    • New carbon-linked RCF, Eurobond and infrastructure facilities with maturities to 2030 and reduced cost of debt
  • Sustainable and growing dividend up 7.5% to 17.1 pence per share (2019: 15.9 pence per share)
    • Proposed final dividend of 10.3 pence per share (2019: 9.5 pence per share)

Operational highlights

  • Pellet Production – 7% increase in production, improved quality and 5% reduction in cost
  • Generation – 11% of UK’s renewable electricity, strong operations and system support performance
  • Customers – lower demand and an increase in bad debt provisions, principally SME customers
  • Sustainability – sale of gas assets, end of coal generation, CDP Climate A- rating (2019: C) and TCFD Supporter
Train carrying sustainably sourced compressed wood pellets arriving at Drax Power Station in North Yorkshire

Train carrying sustainably sourced compressed wood pellets arriving at Drax Power Station in North Yorkshire [click to view/download]

Will Gardiner, CEO of Drax Group said:

“Drax has supported its customers, communities and employees throughout the Covid-19 pandemic and I want to thank colleagues across the Group for their commitment and hard work over the last year. We have delivered strong results, a growing dividend for shareholders and excellent progress against our business strategy.

Drax Group CEO Will Gardiner

Drax Group CEO Will Gardiner in the control room at Drax Power Station [Click to view/download]

“Our focus is on renewable power. Our carbon intensity is one of the lowest of all European power generators. We aim to be carbon negative by 2030 and are continuing to make progress. We are announcing today that we will not develop new gas fired power at Drax. This builds on our decision to end commercial coal generation and the recent sale of our existing gas power stations.

“The proposed acquisition of Pinnacle Renewable Energy will position Drax as the world’s leading sustainable biomass generation and supply business, paving the way for us to develop bioenergy with carbon capture and storage (BECCS) – taking us even further in our decarbonisation.”

2021 outlook

  • Targeting carbon negative
    • No new gas generation at Drax Power Station, retain options for system support gas in next capacity auction
    • Completion of sale of existing gas generation (January 2021) and end of commercial coal (March 2021)
  • Progressing biomass strategy
    • Proposed acquisition of Pinnacle Renewable Energy Inc. (Pinnacle) – supports long-term options for third-party supply, BECCS and biomass generation
    • BECCS – commencement of DCO planning process, potential FEED study and clarity on regional clusters

Infographic: How BECCS removes carbon from the atmosphere

  • Operations
    • Major planned outage on CfD unit and continued impact of Covid-19 on SME customers
    • Strong contracted power sales (2021–2023) 24.4TWh at £48.5/MWh

Operational review

Pellet Production – capacity expansion, improved quality and reduced cost

  • Adjusted EBITDA up 63% to £52 million (2019: £32 million)
    • Pellet production up 7% to 1.5Mt (2019: 1.4Mt)
    • Reduction in fines (larger particle-sized dust)
    • Cost of production down 5% to $153/t(4) (2019: $161/t(4))
  • Cost reduction plan – targeting $35/t (£13/MWh(5)) saving vs. 2018 on 1.9Mt by 2022 – annual savings of $64 million
    • $28 million of run-rate savings from projects delivered 2019-2020
    • Low-cost fibre, LaSalle (improved rail infrastructure, woodyard and sawmill co-location) and HQ relocation
    • $36 million of additional run-rate savings to be delivered by end of 2022
    • Expansion of Morehouse plant completed Q4 2020
    • Expansion of Amite and LaSalle, increased use of low-cost fibre and improved logistics
  • Additional savings from $40 million investment in three 40kt satellite plants in US Gulf – commissioning from 2021, with potential for up to 0.5Mt – targeting 20% reduction in pellet cost versus current cost

 Power Generation – flexible and renewable generation

  • Adjusted EBITDA up 9% to £446 million (2019: £408 million)
    • Biomass generation up 5% to 14.1TWh (2019: 13.4TWh) – record CfD availability (Q2 2020 – 99.5%)
    • Good commercial availability across the portfolio – 91% (2019: 88%)
    • Strong contracted position provided protection from lower demand and reduction in ROC(6) prices
    • Includes £46 million from discontinued gas (2019: £39 million)
Water cooling tower at Drax Power Station

Water cooling tower at Drax Power Station [click to view/download]

  • System support (balancing mechanism, Ancillary Services and optimisation) of £118 million (2019: £120 million)
    • Hydro and gas – one-off hydro contracts in 2019, offset by higher demand for system support services in 2020
    • Lower level of biomass activity due to higher value in generation market
    • 2019 included benefit of buying back coal generation
  • Pumped storage / hydro – excellent operational and system support performance
    • £73 million of Adjusted EBITDA (Cruachan, Lanark Galloway schemes and Daldowie) (2019: £71 million)
Aqueduct supplying water into the reservoir at Cruachan pumped hydro storage plant in Scotland

Aqueduct supplying water into the reservoir at Cruachan pumped hydro storage plant in Scotland [click to view/download]

  • Coal – 8% of output in 2020 and short-term increase in carbon emissions – utilisation of coal stock by March 2021
  • Covid-19 – business continuity plan in place to ensure continued operation and two major outages completed

Customers – managing the impact of Covid-19 on SME customers

  • Customer service employeeAdjusted EBITDA loss of £39 million (2019: £17 million profit) inclusive of estimated £60 million impact of Covid-19
    • Reduced demand, MtM loss on pre-purchased power and increase in bad debt, principally SME customers
    • Continue to evaluate SME options to maximise value and alignment with strategy
  • Development of Drax Customers Industrial & Commercial portfolio – increased sales to high-quality counterparties providing revenue visibility, while supporting the Group’s flexible and renewable energy proposition
  • Renewable and energy services expand Group system support capability and customer sustainability objectives

Other financial information

  • Total operating loss from continuing operations of £156 million reflects:
    • £70 million MtM loss on derivative contracts
    • £239 million obsolescence charges, principally coal (includes £13 million associated with decision not to develop new gas generation at Drax Power Station)
    • £34 million of costs associated with coal closure (redundancy, pensions and site reparations), with annual run-rate savings once complete of c.£30-35 million
  • Total loss after tax of £158 million includes £18 million reduced valuation of deferred tax asset resulting from UK Government’s reversal of previously announced corporation tax rate change (adjusted impact of £14 million, 3.5 pence per share)
  • Capital investment of £183 million(7) – continued invest in biomass strategy, some delay into 2021 due to Covid-19
    • 2021 expected investment of £190-210 million (excludes proposed acquisition of Pinnacle), includes expansion of LaSalle and Amite pellet plants and satellite plant development
  • Net debt of £776 million, including cash and cash equivalents of £290 million (31 December 2019: £404 million)
      • 1.9 x net debt to EBITDA, with £682 million of total cash and total committed facilities
      • Expect around 2 x net debt to EBITDA by end of 2022 inclusive of proposed acquisition of Pinnacle

 

View complete full year report View investor presentation Listen to webcast

Notice of full year results announcement

17 February 2021

Investors
Close up of icicles on building within Drax Power Station
RNS Number : 4104P
Drax Group PLC
(Symbol: DRX)

Drax Group plc (“Drax”) confirms that it will be announcing its Full Year Results for the twelve months ended 31 December 2020 on Thursday 25 February 2021.

Information regarding the results presentation meeting and webcast is detailed below.

Results presentation and webcast arrangements

Management will host a webcast presentation for analysts and investors at 9:00am (UK Time), Thursday 25 February 2021.

The presentation can be accessed remotely via a live webcast link, as detailed below. After the meeting, the webcast recording will be made available and access details of this recording are also set out below.

In order to ask a question following the presentation please either dial-in using the conference call details below or submit a written question using the Q&A functionality on the webcast platform.

A copy of the presentation will be made available from 7:00am (UK time) on Thursday 25 February 2021 for download at: www.drax.com>>investors>>results-reports-agm>> #investor-relations-presentations or use the link https://www.drax.com/uk/investors/results-reports-agm/#investor-relations-presentations

Drax biomass wagons entering rail unloading building

Drax biomass wagons entering rail unloading building

Event Title:

Drax Group plc: Full Year Results

Event Date:

Thursday 25 February 2021

9:00am (UK time)

Webcast Live Event Link:

https://secure.emincote.com/client/drax/drax009

Conference call and pre-register Link:

https://secure.emincote.com/client/drax/drax009/vip_connect

Start Date:

Thursday 25 February 2021

Delete Date:

Friday 31 December 2021

Archive Link:

https://secure.emincote.com/client/drax/drax009

For further information, please contact:

[email protected]

Website:

www.drax.com/uk