Drax swings to £61m H1 loss but will still up dividend

Drax CEO Will Gardiner

Drax Group, the North Yorkshire-based power company, maintained on Wednesday that it expects to increase its full year dividend by 7.5% “subject to good operational performance and impact of Covid-19 being in line with current expectations.”

That’s despite its results for the six months to June 30 showing revenue flat at £2.2 billion and a first-half pretax loss of £61 million compared to a profit of £4 million at the same stage a year ago.

Drax said its expected full year dividend will be up 7.5% to 17.1p per share as it declared an interim dividend of 6.8p per share, up from 6.4p per share.

Last month, Drax shares soared on speculation that it could be a takeover target.

News reports claimed talks were taking place on a potential 340p-a-share deal that would value Drax at around £1.35 billion. 

Drax shares have recovered from a low around 126p in March to trade around 276p on Wednesday.

Drax Group CEO Will Gardiner said: “With these robust half-year results, Drax is delivering for shareholders with an increased dividend while continuing to support our employees, communities and customers during the Covid-19 crisis. 

“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.

“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.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.