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Prices & Quotes - UK Markets - Drax Group (DRX)

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Share Price:
Up 435.00p
Change Today:
4.60p
Market Cap:
1,733.54m
Sector:
Electricity

Drax hikes interim dividend, takes hit from coal obsolescence

By Josh White

Date: Wednesday 29 Jul 2020

LONDON (ShareCast) - (Sharecast News) - Drax Group reported a 30% improvement in group adjusted EBITDA in its first half on Wednesday, to 179m.
The FTSE 250 electricity generator said that Included an estimated 44m impact from the Covid-19 pandemic, primarily in its Customers SME operations.

Adjusted basic earnings per share came in at 10.8p, up from 2p year-on-year.

On a reported basis, Drax said 224m in coal obsolescence charges saw it swing to an operating loss of 32m, from a profit of 34m a year earlier, with losses per share coming in at 14p, compared to earnings of 1p in the first half of 2019.

It said there were 34m in capacity payments for the six months ended 30 June, up from nil a year earlier, following the re-establishment of the capacity market, and reported "strong" biomass performance in both pellet production and generation.

Drax said it saw strength in its cash generation and balance sheet in the period, with 694m of cash and total committed facilities, and an extension of its 125m carbon dioxide emission-linked facility to 2025.

The board described the dividend as "sustainable and growing", with an interim dividend of 6.8p per share, up from 6.4p year-on-year and making up 40% of the total distribution for the year.

Drax said it was expecting the full-year dividend to be up 7.5% to 17.1p, subject to good operational performance and the impact of Covid-19 being in line with its current expectations.

On the operational front, the company reported a 9% reduction in cost and 15% increase in production, and improved quality, in its biomass self-supply compared to the first half of 2019.

In generation, it was responsible for 11% of the UK's renewable electricity in the period, describing "strong" operational performance and system support services.

The Covid-19 pandemic did see lower demand and an increase in bad debt provisions, however, primarily in its small-to-medium enterprise (SME) business.

Looking ahead, Drax said its anticipated full-year adjusted EBITDA, including the estimated 60m impact of Covid-19, remained in line with market consensus.

It said it was evaluating "attractive" investment options for biomass growth, which would result in a reduction in costs and an expansion in capacity.

The company also reported "strong" contracted power sales for 2020-2022, with 34TWh at 51.4/MWh, and a "high proportion" of non-commodity revenues.

"As well as generating the flexible, reliable and renewable electricity the UK economy needs, we're delivering against our strategy to reduce the costs of our sustainable biomass and we're continuing to make progress pioneering world-leading bioenergy with carbon capture technologies, known as BECCS, to deliver negative emissions and help the UK meet its 2050 net zero carbon target," said chief executive officer Will Gardiner.

"National Grid stated this week that the UK can't reach net zero by 2050 without negative emissions from bioenergy with carbon capture and storage.

"BECCS delivers for the environment and also provides an opportunity to create jobs and clean economic growth in the North and around the country."

At 0846 BST, shares in Drax Group were down 1.33% at 267.8p.

Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

 

Drax Group Market Data

Currency UK Pounds
Price 435.00p
Change Today 4.60p
52 Week High 454.20p
52 Week Low 223.20p
Volume 620,742
Shares Issued 398.51m
Market Cap 1,733.54m

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What The Brokers Say

Strong Buy 8
Buy 0
Neutral 2
Sell 0
Strong Sell 0
Total 10
strong_buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Drax Group Dividends

  Latest Previous
  Final Interim
Ex-Div 22-Apr-21 20-Aug-20
Paid 14-May-21 02-Oct-20
Amount 10.30p 6.80p

Trades for 22-Jun-2021

Time Volume / Share Price
16:41 80,000 @ 433.08p
16:41 78,227 @ 434.65p
16:35 222,113 @ 435.00p
16:29 20 @ 434.40p
16:29 106 @ 433.60p

Drax Group Key Personnel

Chair Philip Cox
CEO Will Gardiner
CFO Andy Skelton