Share Name Share Symbol Market Type Share ISIN Share Description
Drax Group LSE:DRX London Ordinary Share GB00B1VNSX38 ORD 11 16/29P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.80p -0.28% 280.20p 279.80p 279.90p 284.00p 278.60p 281.50p 881,143.00 16:35:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Electricity 3,065.0 59.0 14.0 20.0 1,139.55

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Date Time Title Posts
07/9/201617:07Drax - Coal power and yield3,089.00
23/2/201608:07*** Drax ***938.00
12/9/201410:42Zak Mir says CONVICTION BUY on Drax Group (DRX.L)4.00
12/1/200709:16NIce Yield and Upside from 490p ?76.00

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DateSubject
03/12/2016
08:20
Drax Daily Update: Drax Group is listed in the Electricity sector of the London Stock Exchange with ticker DRX. The last closing price for Drax was 281p.
Drax Group has a 4 week average price of 291.17p and a 12 week average price of 304.66p.
The 1 year high share price is 363.90p while the 1 year low share price is currently 205.10p.
There are currently 406,691,703 shares in issue and the average daily traded volume is 825,642 shares. The market capitalisation of Drax Group is £1,139,550,151.81.
23/2/2016
11:45
topvest: Yes, why the share price is so strong is anyones guess. The outlook is very bleak.
10/11/2015
14:16
via con: So DB downgrades after being positive a week ago. A bit of a volte- face by them it would seem "Power price crunch becoming increasingly severe Capacity concerns have been in focus over the last week, with National Grid’s NISM signaling a tightening UK power market. However, weakening gas prices have driven a further material leg down in UK power prices which is likely to heighten the pressure on Drax’s earnings and cashflows. We may see a capacity driven bounce in power prices, although in the medium-term we expect more LNG exports from the US to add to the pressure on gas prices. The shares have rallied by c.10% over the last month and now look expensive. We downgrade to Sell with an unchanged 220p/share target price. Market pressures mounting Drax has executed well on the parts of its biomass conversion strategy within its control. However, the company is suffering from low power prices and regulatory challenges. The EU state aid process is still ongoing for its fixed price biomass contract, leaving all of its units market exposed. Power prices have weakened by 5-10% over the last month alone, with gas prices dropping by greater than 10%. Our unchanged estimates assume a c.15% improvement in UK power prices versus forwards, as medium-term gas prices rise and the power market tightens, although the shares now look expensive even on this basis. Financial projections: state aid approval and power prices key uncertainties We forecast Drax making little in earnings over 2016-18, although we still forecast positive free cashflow of greater than 20p/share p.a. as capex spend moderates. Changes in power prices and the outcome of the state aid process for Drax’s fixed price contract could each have a significant impact on our estimates. If the EU approves the contract at the original strike price, power prices rise strongly, and/or Drax announces a significant cost cutting programme this could lift our estimates. If power prices remain in-line with current forwards or the fixed price contract is not approved, the squeeze could be more severe. 220p/share target price unchanged; downgrade to Sell; risks We leave our DCF based target price unchanged at 220p, although the rally in the share price over the last month, and drop in UK power prices, makes us worry more about potential downside scenarios. Our DCF based valuation assumes Drax converts three of its six units to biomass with two operating under the RO and one under a CfD (with a contract price of GBP95/MWh real). The main upside risks are higher UK power prices, positive regulatory news, or cost cutting. If Drax secured its fixed price contract at the original strike price this could add 90/share to our valuation"
11/9/2015
11:30
via con: GS note this morning We expect no recovery in UK power prices and reduce our UK power forecasts by c.10%. We expect demand to continue to fall (peak demand in 2014 was 12% below the all-time peak in 2006), and believe that even significant plant closures are likely to have little impact on the power price owing to the flat merit order. The only value for most existing gas and coal plant is from capacity payments which we expect to remain at a low level. Drax, as a 100% UK power generator, is the most exposed to our new lower outlook for power prices. We cut our 12m price target to 230p (from 300p) and downgrade to Sell. Drax has underperformed the utilities sector by 35% YTD, reflecting falling power prices and unfavourable regulatory changes. We highlight a further potential negative catalyst: the EU decision on regulation for Drax’s final biomass unit. We see the risk/reward skewed to the downside: we believe the share price is discounting a best case scenario on this decision (fixed price CfD approved at £105/MWh) while we see more than 60% valuation downside if the CfD is rejected by the EU. http://ftalphaville.ft.com/marketslive/2015-09-11/
05/9/2015
08:58
beeks of arabia: Could end up being survival of the fittest. The more coal that shuts/mothballs, the more likely the real chance of price spikes in the next few years. You watch the share price react when a couple of nukes go off the grid and we have a cold winter.
14/8/2015
13:51
fangorn2: "Another clear negative over the month was Drax, which was a major casualty of the UK Budget, in which the Climate Change Levy exemption for renewable energy was abolished. This decision is very frustrating, as significant capital has been committed by Drax to convert part of its power station from coal to biomass, following a long-term commitment from Government to allow an appropriately attractive long-term return. The Government is now going back on that commitment with negative implications for Drax. Despite this, we added modestly to the holding at a very depressed share price level and continue to view it as a strategically important asset in the UK electricity generation sector." hTTps://woodfordfunds.com/insight/july-2015/
14/7/2015
07:32
scotches: http://www.advfn.com/lse/ShareNews.asp?sharenews=DRX&article=67677455 "The investment case for biomass power generator Drax Group "remains intact" despite the recently announced changes to the climate change levy...says an analyst from Investec. ...the UK government's renewables policy is "of critical importance" to Drax's share price and says despite the changes, the attractiveness of the company is still there although there is now higher political risks. "We still believe that, in the context of 'affordable' UK decarbonisation paths, Drax is an attractive asset given its biomass conversions, and its option on carbon capture and storage," he says. Investec says Drax remains "just" as a Buy on its rating system, but it lowers its price target to 300.0 pence from 450.0 pence."
19/6/2015
01:46
zcaprd7: Their own fault really. They tried to join the tree huggers... Shipping wood over from the states to burn in a coal fired power station? Really? Someone thought that was a good, practical idea? It will have a massive value when the lights go out, but where the share price will go, I've no idea. One assumes they can switch back to coal once we leave the eu?
30/3/2015
15:52
bookbroker: You are buying the asset here, it is still worth more than the share price, with little debt and a changing landscape. Remember this co. still provides 8% of UK electricity, that can not be replaced in the short term, and hopefully the changes DRX. is making to become a low carbon energy provider is taking place. That is the most ridiculous remark about closing it down, this co. is essential to UK energy security, the Rough gas caverns out in the North Sea are coming to the end of their lifespan gradually, CNA already reducing capacity to carry out essential maintenance, no new nuclear power on the near term horizon, and an ageing existing nuclear bank of stations, wind and solar will not replace the existing framework, as for wave power this all bluster at the moment.
10/2/2015
13:41
mike740: Macquarie note today: "Drax is not for the faint hearted and it has been a volatile performer. It has two main drivers to valuation: i) dark and bark spreads and ii) biomass conversion clarity. Both of these have been recently hit as a combination of low oil price/mild winter/DECC taking control of its budget have reduced outlook expectations. There are two reasons why we believe current levels offer an attractive entry point. We have a new 465p price target (down from 550p/share) and an Outperform rating. With a fixed carbon and biomass cost, spreads are heavily linked to gas prices. Whilst gas prices rebounded somewhat since January, leading to an improved dark and bark spread, the Drax share price has not. Drax is more efficient than 15GW of other coal power stations. If current 25-year-low spreads fall further, we think these will not cover cash costs and those without capacity payments (7GW) could close, tightening the market. We estimate Drax has an EV of c.£1.6bn and a headline EV/EBITDA of 6.7x 2017e. We estimate they could sell their pelleting plants, worth in our view £300mn (double-digit IRRs on £225mn investment). Drax has hedged its pellets at £8/GJ, although the majority of these costs are in $US. At current rates we estimate this could be worth up to £200mn, or 15% of Drax. Removing this derivative would increase biomass costs overall – not unhelpful in EU negotiations, which, if allowed, we see coming in at £100/MWh real. With hedged 1-year forward cashflow of c.£50mn, the EV of a ‘stripped̵7; plant would be £1,050mn. At current spreads we estimate a 3-ROC plant EBITDA of £218mn once capacity payments kick in, rising to £278mn with a CfD at £100/MWh – leading to a potential EV/EBITDA of between 3.8-4.8x. Our valuation is 465p/share with a 50% probability of 3 ROCs (410p) and a £100/MWh CfD (517p). We see potential that dark spreads will rise through rising gas prices or less efficient coal fired power stations closing."
10/2/2015
12:05
sportbilly1976: Here is the transcript of the chat on Drax (the dark spread chart didn't copy across): BE Drax Group PLC (DRX:LSE): Last: 404.50, up 14.6 (+3.74%), High: 404.90, Low: 389.40, Volume: 1.22mBlockBE Getting squeezy though. Now up 5.2% BE The idea in the Times this morning is that RWE or GDF Suez might be weighing a bid at 550p. BE Now, post Rexam who knows …… PM hehe PM Hesitate to diss a Parky story BE Yup. Indeed. Though Centrica more likely than GDF, I’d have thought. BE Quick line from Cazenove on the rumour. BE The reported price represents a 28% premium to current market price (390p). It is unclear whether the report is actually credible or not (yesterday’s share price strength may have been attributable to the 9% increase in winter 15/16 UK clean dark spread), but if anyone was ever going to bid for Drax, now would be a good time in our view given the share price weakness following a dearth of bad news in the last 12 months and collapse in commodity prices. However, we would be surprised if either RWE or GSZ were to bid for Drax because it would be a significant investment, yet strategically both groups have expressed a desire to reduce exposure to European generation. BE Here’s that dark spread graph versus Drax shares BE BE Which is via Macquarie PM What is that telling us? PM BE It’s telling us that UK wholesale power prices (for want of a better phrase) had ticked higher and Drax hadn’t. BE Macquarie is a buyer on valuation. BE Drax is not for the faint hearted and it has been a volatile performer. It has two main drivers to valuation: i) dark and bark spreads and ii) biomass conversion clarity. Both of these have been recently hit as a combination of low oil price/mild winter/DECC taking control of its budget have reduced outlook expectations. There are two reasons why we believe current levels offer an attractive entry point. We have a new 465p price target (down from 550p/share) and an Outperform rating. BE With a fixed carbon and biomass cost, spreads are heavily linked to gas prices. Whilst gas prices rebounded somewhat since January, leading to an improved dark and bark spread, the Drax share price has not. Drax is more efficient than 15GW of other coal power stations. If current 25-year-low spreads fall further, we think these will not cover cash costs and those without capacity payments (7GW) could close, tightening the market. BE We estimate Drax has an EV of c.£1.6bn and a headline EV/EBITDA of 6.7x 2017e. We estimate they could sell their pelleting plants, worth in our view £300mn (double-digit IRRs on £225mn investment). Drax has hedged its pellets at £8/GJ, although the majority of these costs are in $US. At current rates we estimate this could be worth up to £200mn, or 15% of Drax. Removing this derivative would increase biomass costs overall – not unhelpful in EU negotiations, which, if allowed, we see coming in at £100/MWh real. PM Certainly been volatile BE With hedged 1-year forward cashflow of c.£50mn, the EV of a ‘stripped̵7; plant would be £1,050mn. At current spreads we estimate a 3-ROC plant EBITDA of £218mn once capacity payments kick in, rising to £278mn with a CfD at £100/MWh – leading to a potential EV/EBITDA of between 3.8-4.8x. BE Our valuation is 465p/share with a 50% probability of 3 ROCs (410p) and a £100/MWh CfD (517p). We see potential that dark spreads will rise through rising gas prices or less efficient coal fired power stations closing. BE Yeah, as the ROTR mention, the swing factor in Drax numbers on biomass subsidies make it tricky to value right now. BE They also have FY on Feb 24 BE So I’ll suggest this is just a valuation bounce / squeeze, and await the Rexam style 11.30 rns to make me look stupid.
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