Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Drax Group Plc    DRX   GB00B1VNSX38

DRAX GROUP PLC

(DRX)
My previous session
Most popular
  Report  
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsOfficial PublicationsSector newsAnalyst Recommendations

Drax : Iberdrola revise plants deal after EU decision

share with twitter share with LinkedIn share with facebook
share via e-mail
0
12/03/2018 | 04:43am EST
A new turbine is lowered by a crane at Drax power station in Drax

LONDON (Reuters) - British power producer Drax Group Plc has revised the terms of its deal to buy UK generation assets from Spain's Iberdrola to ensure it gets a rebate on lost capacity payments due to a pause in a government scheme.

In October, Drax agreed to buy some UK hydro and pumped storage power plants from Iberdrola's Scottish Power for 702 million pounds as it aims to exit coal-based production before a 2025 government deadline.

Last month, Britain had to halt a back-up power scheme called the capacity market to avoid electricity shortages pending a further investigation by European Union regulators.

The scheme pays providers for making energy supplies available at short notice to avoid shortages that might occur as coal plants close and low prices dissuade investors from building new power plants.

Even though Drax believes that the European Commission will reapprove the existing capacity market in its current or similar form, the pause has put payments to plants it is buying in the Iberdrola deal at risk.

Therefore, it has agreed a risk-sharing scheme with the Spanish firm as a result which could mean it receives a payment of up to 26 million pounds.

Under the revised terms, if less than 100 percent of capacity payments from Jan. 1-Sept. 30, 2019 are received and gross profit of the portfolio for the full year is less than 155 million pounds, Iberdrola will pay Drax up to 26 million pounds.

Similarly, if 2019 gross profit is more than 165 million plunds, Drax will make a payment to Iberdrola of up to 26 million pounds.

When the deal was originally announced, Drax expected Scottish Power's portfolio of assets to contribute 2019 gross profit of 155-175 million pounds.

For a graphic on Drax
's Iberdrola deal high doused by EU ruling, see - https://tmsnrt.rs/2RtNkAV

"The capacity market is a central pillar of the UK’s energy policy and ensures security of supply while minimising costs to consumers," Will Gardiner, chief executive of Drax Group said in a statement.

"To mitigate the risk that capacity payments take time to be restored, we have agreed revised terms which provide protection in 2019," he added.

The judgement by the EU's General Court in October annulled a decision by the European Commission, which had said Britain's capacity market was compatible with EU state aid rules.

It could take a year or more for the capacity market to be reinstated, analysts say.

Shares in Drax rose as high as 397 pence after the news but receded slightly to 392 pence by 0925 GMT.

(Reporting by Nina Chestney in London and Noor Zainab Hussain in Bengaluru; Editing by Keith Weir)

Stocks mentioned in the article
ChangeLast1st jan.
DRAX GROUP PLC -5.96% 372.4 Delayed Quote.10.37%
IBERDROLA 0.92% 7.25 End-of-day quote.3.31%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on DRAX GROUP PLC
02/14DRAX : 14 February 2019 - Award-winning tourist attraction announces free educat..
PU
02/13DRAX : 13 February 2019 - UK progress on climate targets at risk
PU
02/07DRAX : 7 February 2019 - Carbon dioxide now being captured in first of its kind ..
PU
01/22DRAX : End of Share Repurchase Programme
PU
01/03DRAX : to play key role in Great Britains energy system following acquisition of..
AQ
01/03DRAX : completes Iberdrola UK hydro play
AQ
01/03DRAX : Completes 702m Acquisition of Scottish Power Portfolio
AQ
01/02DRAX : Completed acquisition of Scottish Power portfolio
PU
01/01DRAX : 1 January 2019 - Completion of deal means Drax will play bigger role at h..
PU
2018DRAX : Result of GM
PU
More news
Financials (GBP)
Sales 2018 3 966 M
EBIT 2018 81,0 M
Net income 2018 40,0 M
Debt 2018 382 M
Yield 2018 3,71%
P/E ratio 2018 37,38
P/E ratio 2019 12,54
EV / Sales 2018 0,47x
EV / Sales 2019 0,49x
Capitalization 1 465 M
Chart DRAX GROUP PLC
Duration : Period :
Drax Group Plc Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends DRAX GROUP PLC
Short TermMid-TermLong Term
TrendsBearishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 11
Average target price 4,12  GBP
Spread / Average Target 11%
EPS Revisions
Managers
NameTitle
Dwight Daniel Willard Gardiner Chief Executive Officer & Executive Director
Philip Gotsall Cox Chairman
Andrew Keith Skelton Chief Financial Officer
Andrew Koss Executive Director
David Clive Lindsell Senior Independent Non-Executive Director
Sector and Competitors