Tag: investors

Drax Group plc: Full year results for the twelve months ended 31 December 2017

27 February 2018

Investors
RNS Number : 9871F
Drax Group PLC
Twelve months ended 31 December20172016
Key financial performance measures
EBITDA (£ million)(1)229140
Underlying profit after tax (£ million)(2)321
Underlying earnings per share (pence)(2)0.75.0
Total dividends (pence per share)12.32.5
Net cash from operating activities (£ million)315191
Net debt (£ million)(3)36793
Statutory accounting measures
(Loss) / profit before tax (£ million)(183)197
Reported basic (loss) / earnings per share (pence)(37.2)47.7

All areas of the business contributing to positive EBITDA for the first time

  • EBITDA up 64% to £229 million – improving earnings quality from biomass generation and Opus Energy
    • Pellet Production – EBITDA up £12 million to £6 million – 35% growth in production
    • Power Generation – EBITDA up £64 million to £238 million – contribution from biomass generation
    • B2B Energy Supply – EBITDA up £33 million to £29 million –acquisition of Opus Energy
  • Strong cash flow generation and balance sheet – 1.6x net debt to EBITDA
  • Final dividend of £30 million, representing 60% of the recommended full year – £50 million
  • £50 million share buy back programme consistent with capital allocation policy
  • Statutory loss before tax principally driven by unrealised losses related to foreign currency hedging of £156 million

Delivering strategy and remain on course to hit >£425 million EBITDA target by 2025

  • Accelerated energy supply growth with acquisition and on-boarding of Opus Energy
  • Increased biomass self-supply through acquisition and commissioning of third biomass pellet plant, LaSalle Bioenergy
  • Government support received for fourth biomass unit conversion at Drax Power Station
  • Development of options for future generation: coal-to-gas repowering option, two OCGTs (4) to enter next capacity market auction in December 2018

Focused on operational excellence and investment in strategy

  • Continued focus on safety, operational excellence and project development
  • Targeted investment in long-term growth opportunities
  • Continued growth in EBITDA and cash generation
  • Sustainable and growing dividend, with opportunities to return capital in line with policy

Will Gardiner, Chief Executive of Drax Group plc, said:

“We continued to transform the business in 2017, delivering a strong EBITDA performance, in line with expectations. This was delivered by all parts of the business making positive contributions for the first time.

“We also made good progress delivering our strategy, which is clear and unchanged. We are increasing biomass self-supply, developing projects to diversify our generation mix and growing our B2B energy supply business.

“The UK is undergoing an energy revolution, starting with a significant reduction in carbon emissions, and to support that we are helping to change the way energy is generated, supplied and used.”

Notes for analysts and editors

2017 Group Financial Review

  • Underlying earnings per share decreased to 0.7 pence
    • Accelerated depreciation of coal-specific assets, amortisation of intangible assets associated with the acquisition of Opus Energy and an increase in net finance charges.
  • Reported basic earnings per share – a loss of 37 pence, which includes unrealised losses on derivative contracts of £156 million (principally related to the foreign currency hedging programme) in addition to one-off items – transaction costs relating to the acquisition of Opus Energy (£8 million) and refinancing (£24 million)
  • Tax – one-off non-cash charge of £16 million – a reduction in US federal tax rates from 35% to 21% resulting in a revaluation of deferred tax balances, offset by £13 million cash tax credit from UK Patent Box tax regime, which rewards Drax patented innovation in biomass generation
  • Investment in line with guidance
    • Acquisition of Opus Energy (£367 million)
    • Acquisition and commissioning of LaSalle Bioenergy (£48 million)
    • Maintenance and improvement (£133 million) including pellet plant optimisation, strategic spares, Haven Power information systems, research and innovation and Opus Energy office consolidation
    • Continue to expect ongoing maintenance capital investment of £50-60 million per year
  • Net debt of £367 million (31 Dec 2016: £93 million), including cash on hand of £222 million

2017 Operational Review

Pellet Production – Focus on good quality pellets at lowest cost

  • 35% increase in pellet production to 0.8M tonnes (2016 0.6M tonnes)
  • Low-cost expansion of Amite and Morehouse plants complete
  • Improving operational performance whilst providing supply chain flexibility
  • LaSalle Bioenergy commissioning ahead of plan from November 2017, increasing output through 2018
  • Biomass self-supply increased

Power Generation – Focus on optimisation of existing assets and development of projects

  • Electricity output (net sales) 20.0TWh (2016: 19.6TWh)
  • 65% of generation from renewables (2016: 65%)
  • £88 million from system support and flexibility
  • £90 million capacity market payments secured for 2017-2022

B2B Energy Supply – Profitable business with growth in sales and customer meters

  • 12% increase in customer meter points to more than 375,000
  • 46% of energy sales from renewables
  • Opus Energy EBITDA in line with plan; Haven Power exceeded EBITDA breakeven target
  • Continued investment in next generation IT systems

Notes:

(1)  EBITDA is defined as earnings before interest, tax, depreciation, amortisation and material one-off items that do not reflect the underlying trading performance of the business.

(2)  2017 underlying earnings exclude unrealised losses on derivative contracts of £156 million and material one-off items that do not reflect the underlying performance of the business (2016: unrealised gains of £177 million).

(3)  Borrowings less cash and cash equivalents.

(4)  Open Cycle Gas Turbine.

Contacts

Enquiries:

Drax Investor Relations: Mark Strafford

+44 (0) 1757 612 491

Media:

Drax External Communications: Ali Lewis

+44 (0) 1757 612 165

 

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View investor relations presentation

Notice of Preliminary Results announcement, presentation and webcast arrangements

20 February 2018

Investors
RNS Number : 4133F
Drax Group PLC

Notice of Preliminary Results announcement

Drax Group plc (“Drax”) confirms that it will be announcing its Preliminary Results for the twelve months ended 31 December 2017 on Tuesday 27 February 2018.

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

Results presentation meeting and webcast arrangements

Management will host a presentation for analysts and investors at 9:00am (UK Time), Tuesday 27 February 2018, at The Lincoln Centre, 18 Lincoln’s Inn Fields, London, WC2A 3ED.

Would anyone wishing to attend please confirm by either e-mailing [email protected] or calling Francesca Boothby at FTI Consulting on +44 (0) 203 727 1054.

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

A copy of the presentation will be made available from 7:00am (UK time) on Tuesday 27 February 2018 for download at: www.drax.com/uk>>investors>>results-reports-agm>>investor-relations- presentations or use the link https://www.drax.com/uk/investors/results-reports-agm/#investor- relations-presentations

Event Title:Drax Group plc: Preliminary Results
Event Date:Tuesday 27 February 2018
Event Time:9:00am (UK time)
Webcast Live Event Link:http://cache.merchantcantos.com/webcast/webcaster/4000/7464/16531/99668/Lobby/default.htm
Start Date:Tuesday 27 February 2018
Delete Date:Monday 11 February 2019
Archive Link:http://cache.merchantcantos.com/webcast/webcaster/4000/7464/16531/99668/Lobby/default.htm

For further information please contact Francesca Boothby at FTI Consulting on +44 (0) 203 727 1054.

Website: www.drax.com/uk 

Fourth biomass unit conversion

17 January 2018

Investors
RNS Number : 1114C
Drax Group PLC

Drax welcomes the UK Government response to the consultation on cost control for further biomass conversions under the Renewable Obligation scheme, which will enable Drax to convert a fourth unit to biomass.

The response proposes that, rather than imposing a cap on ROC(1) support for any future biomass unit conversions, a cap would be applied at the power station level across all ROC(1) units. This would protect existing converted units and limit the amount of incremental ROCs attributable to additional unit conversions to 125,000 per annum.

The response would enable Drax to optimise its power generation from biomass across its three ROC units under the cap, whilst supporting the Government’s objective of controlling costs under the Renewable Obligation scheme.

Drax will now continue its work to deliver the low cost conversion of a fourth biomass unit, accelerating the removal of coal-fired generation from the UK electricity system, whilst supporting security of supply.

Drax plans to complete the work on this unit as part of a major planned outage in the second half of 2018, before returning to service in late 2018. The capital cost is significantly below the level of previous conversions, re-purposing the existing co-firing facility on site to deliver biomass to the unit.

The unit will likely operate with lower availability than the three existing converted units, but the intention is for it to run at periods of higher demand, which are often those of higher carbon intensity, allowing optimisation of ROC(1) generation across three ROC(1) accredited units. The CfD(2) unit remains unaffected.

Will Gardiner, Chief Executive of Drax Group, commented:

“We welcome the Government’s support for further sustainable biomass generation at Drax, which will allow us to accelerate the removal of coal from the electricity system, replacing it with flexible low carbon renewable electricity.”

“We look forward to implementing a cost-effective solution for our fourth biomass unit at Drax.”

Enquiries:

Investor Relations:

Mark Strafford

+44 (0) 1757 612 491

Media:

Ali Lewis

+44 (0) 1757 612 165

 

Website: www.drax.com/uk

Notes

  1. Renewable Obligation Certificate
  2. Contract for Difference

END

 

 

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/uk

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/uk

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/uk

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/uk

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/uk

END