AGM Statement

RNS Number : 5380B

Drax Group PLC

18 April 2012

 



18 April 2012

Drax Group plc

("Drax" or the "Company")

Symbol: DRX

AGM Statement

Drax holds its Annual General Meeting at 11:30am today at The Armourer's Hall, Coleman Street, London.  At this meeting Charles Berry, Chairman of Drax, will make the following comments:

"Let me first say one or two things by way of introduction in respect of the Company's performance in 2011, our strategic focus, returns to you, our shareholders, and the composition of the Board.

Our principal performance indicators and operational achievements for 2011 are summarised on the screen, but let me just put these into context. With a continued focus on excellence in operations we delivered strong performance across the business which, along with tight cost control, underpinned good financial results for the year against a good deal of uncertainty in the power-related commodity markets.

On the generation side of our business, as in previous years, being available to generate reliably when needed allowed us to deliver value to the business through providing services in support of system stability and security. And I am pleased to report that our safety statistics continue to be industry-leading.

Our retail arm, Haven Power, doubled its sales during 2011, driven largely by the progress made in the larger user market for industrial and commercial customers. We are delighted with the real value that the Group is deriving from this success. Our excellence in customer service supports our proposition in the retail electricity market and the recognition we received through an external survey in this regard is a source of pride for us.

Reducing our carbon footprint is central to our business strategy and we continued to make good progress in fulfilment of this. We have now embarked on the first of our two outages for this year which will see the completion of our turbine upgrade project which we started in 2007. Completion will take us towards an overall efficiency of 40% which builds on our position as the UK's most efficient coal-fired power station, and importantly will deliver savings of carbon dioxide emissions of one million tonnes each year.

Burning sustainable biomass in place of coal, however, remains our strategic focus. We continued to work closely with Government throughout last year to advance the case for electricity generation from biomass. We believe the technology has considerable potential to provide the UK with a low carbon, cost effective and reliable source of renewable power. And we were delighted to see our beliefs echoed by those in Government and elsewhere.

The preparation work for our biomass expansion is now well advanced. Last year we made good progress in biomass fuel procurement and in the development of our strategic capital investment plan. 2011 was also an important year for us in terms of the research and development we undertook to understand more fully the extent to which we could burn sustainable biomass. The results of our work have been encouraging and we are confident that we have the technical capability to become predominantly biomass fuelled. 

However, we can only do so with an appropriate level of regulatory support. To that end we await Government's final decision on the future support levels for all renewable technologies, which is expected in the Spring with legislation in the Summer.

Turning now to returns to our shareholders, as you're aware, a resolution is to be proposed to the meeting for payment of a final dividend of 11.8 pence per share. If the resolution is passed, this equates to returning a further £43 million to shareholders in May.  When added to the dividends paid last October this brings the total return to shareholders in respect of 2011 to £101 million.

The final comment I'd like to make is about the composition of the Board. During the year, the Nominations Committee considered the composition of the Board and concluded that it was an appropriate time to appoint a commercial director. I was therefore delighted to welcome Paul Taylor to the Board as an executive director. Paul has been with the group since 2004, and is responsible for the Retail and Trading parts of the business. Paul's appointment is testament to the group's succession planning process which had established that he was capable of stepping into an executive director role when the time was right."

Enquires:

Investor Relations

Michael Scott

[phone]

Media 

Melanie Wedgbury         

[phone]

Website: www.draxgroup.plc.uk

Notes:

(1)  The principal performance indicators and operational achievements for 2011 which were  "summarised on the screen" were as follows:

During 2011:

®  Total revenue from Generation was £1,836 million

(2010: £1,648 million)

®  Gross Profit was £501 million

      (2010: £551 million)

®  EBITDA was £334 million

      (2010: £392 million)

®  Underlying earnings - 56 pence per share

      (2010: 64 pence per share)

®  Net cash was £225 million

      (2010: £204 million)

®  Carbon dioxide emissions - 760 tonnes per GWh

      (2010: 784 tonnes per GWh)

®  High commercial despatch with a load factor of 80%

      (2010: 80%)

®  Total recordable injury rate was 0.10

      (2010: 0.26)

 

END

 

 

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