Drax Share Discussion Threads

[boffster] 10/7/2015 18:32

If its inefficient & unprofitable, then why were 4 of its 6 generating units running at full power on a day like this (with one of the other two units out for maintenance)

[cboney] 10/7/2015 16:00

nice brownfield site

[bookbroker] 10/7/2015 15:46

Drx. is a huge part of the UK electricity generating system, equivalent to almost all renewable capacity, however it is time they took the knife to costs, if the power station is proving inefficient and non-profitable, it bodes ill for the workforce and the station's future, I hold here but I'm afraid the future looks pretty uncertain, how this Govt. can just pull the rug from under the feet of the renewable energy industry overnight is beyond me!

[nick rubens] 10/7/2015 15:03

What exactly are the 1.5 billion of assets mentioned here before? Is it Land and buildings?

Could DRX decide there is no future in electricity generation and become a land asset co or something instead?

How might their prior generating capacity be taken up? Extreme idea I know.

I can't see a way ahead without massive investment into gas fired stations.

[bookbroker] 10/7/2015 14:50

Agree entirely, the green lobby blames climate change on pollution, far more complicated than that, can they explain weather extremes over the centuries past - NO, NO, NO!!

[fangorn2] 09/7/2015 16:58

Welcome Nigel - Not doing anything myself yet. Still underwater on previous purchases which will take a while to right themselves I suspect.

Keeping options open whilst I nibble some US stocks where Ive been more focused

[careful] 09/7/2015 16:29

me too.
out for a tax free 7% in a day.
better than the building society.

[nigelpm] 09/7/2015 15:36

Thanks for that Fan. I've walked away - 7% in a day enough for me.

[fangorn2] 09/7/2015 15:30

RBC comment in case you've not seen it

""This is yet another material piece of negative news for Drax that we estimate is worth around 80p a share," it said.The bank said the lost EBITDA flows through to earnings per share with a resultant impact of around 5.5p a share in 2015 and around 12p a share thereafter.

"Based on our new 300p price target, we see some underlying value in Drax. However, it is difficult to see positive catalysts in the current weak commodity environment."

[nick rubens] 09/7/2015 14:31

Basically profits will be hit with the full impact of losing the Climate Change Levy exemption and what have you in the accounting year 2016.

Dividends and profits have continually been eroded for around 10 years as it is.

What can change ahead to create any value for shareholders and without incurring massive investment costs?

[minerve] 09/7/2015 14:30

careful

OK. I was trying to be helpful but it looks like my help is in the wrong direction.

Investment is not just a case of how much it is worth, it is also a case of how much someone is prepared to pay for it and by when. You could buy in and find yourself without any other person who is willing to share your current view for the next decade. I think it is disrespectful to suggest they are clowns. People listen to them and millions of shares get traded on their thoughts not yours.

[careful] 09/7/2015 14:02

That is exactly my point.
Drax has a turnover of about 2.8bn.
assets of 1.5bn
a market cap of under 1bn yesterday.
it is important, electrical generation can be tight in the uk in the winter, it generates about 7%.

these clowns no doubt do an impressive detailed analysis.
but i do not need them to tell me that this asset would be very desirable to an outsider who could do something with it.

if they think that Drax is worth less than 1bn they should go back to school.

[minerve] 09/7/2015 13:53

Yes, we do have to make our own investment decisions if we want to take that responsibility ourselves. However, we should at least attempt to make informed decisions (not saying that you don't) and I was merely pointing out that the FT helps in that regard. It isn't making predictions it is just very good reporting and in-depth analysis. Please don't read it as it is just a bunch of analysts with their views on the share price because it is far removed from this. If you allow it, it allows good thought creation and economic and financial review and I have found it to be very helpful. I just thought you should perhaps give it a go as I really do think it will be helpful to you like it has been for me. It is not like other financial sections of other papers, or the IC, because it is more impartial and has many commentators on the same subjects but with different views. If you are a reader, I would guarantee you would find the £350 well spent. I think had you read, what I read yesterday, you would feel less comfortable about your money being invested in DRX. I am not saying it may of stopped you from investing but you may have approached this with perhaps more caution, if I may say so, and quite rightly too.

IMHI & DYOR

[careful] 09/7/2015 13:13

Minerve.

As you say,there is a wide selection of quality reading material available in our game including the FT.
If we absorbed all of this information we still have to make our own investment decisions based upon our own judgement and personal experience.
We also know from experience how often these apparently smart informed scribes get it completely wrong.
We are all in the game of trying to predict the unpredictable.

[minerve] 09/7/2015 12:03

Careful

Just out of interest, do you subscribe to the FT? I do. It is expensive. Roughly £350 a year. If you don't, I would seriously recommend this to you, or anyone on here who has reasonable investment money. As far as investing goes, it is the best money one can spend - as long as you take time to read it. John Auther and James Macintosh provide excellent insight (through graphs and videos) to world economics and finance. The FT company reporting has really helped me. The Lex column also has some good stuff that they report on. The FT are currently writing a series of articles about world oil.

Please seriously consider what I say as I say this with the greatest sincerity and integrity as a fellow investor.

Minerve

[minerve] 09/7/2015 11:53

careful

If you look at how this removal of carbon tax relief will affect DRX, DRX have confirmed that it will hit revenues by £30m this year and £60m next. That suggests a 40+% (approximation) fall against consensus forecast earnings. The pain will come next year. I personally wouldn't hold these at the moment. I have held them, sold them (a while back), had them on my watch list, but now I am taking them off my watch list. Good bounce today but it could be the dreaded cat.

IMHO & DYOR

[careful] 09/7/2015 11:32

64 posts on this thread yesterday.
only 7 so far today.

how we all love the torture of a collapsing share.

[careful] 09/7/2015 08:39

I bought yesterday and feel good about it.
Heavy in cash I have put quite a chunk into the market recently.
you could say panic buying.

I think Greece will have a solution shortly.
China will settle down also.
Then we shall be off to the races.

feeling bullish right now for the long term

[deanroberthunt] 09/7/2015 07:50

Hmm, may have a rethink, not cheap still on fwd numbers.

Broker Forecasts

Year Ending

2015 58.54 11.55 -63.91 30.64 -0.48 5.79 1.64
2016 119.00 27.16 135.18 13.03 0.10 13.58 3.84

[deanroberthunt] 09/7/2015 07:47

trouble is, it's a double wammy as the Euro and wider markets look like going into meltdown and a bear market....where DRAX then!!! seriously....sub £1

[deanroberthunt] 09/7/2015 07:39

I think it's worth cost pound averaging from some point today, for the longer term....dividend is a beaut but it must be cut surely.

[bigman] 09/7/2015 07:31

thanks liam/fom i was going to buy for the bounce up, but will resist.

[liam1om] 09/7/2015 07:26

Another interesting post on LSE ucabwoo:

I wouldn't get too excited about LECs being discontinued. They are just being replaced by the RO (renewable obligation) and CfD (Contract for difference)schemes. The bad news for Drax is that everyone pus for these systems....there are no certificates to offset against them. Interesting the £50m figure. This clearly excludes lost business. I think Haven will really struggle to sign up the big nationals without this price advantage (certainly we are very happy about the developments at my employer...Haven have been killing us in tenders for a while now). For this reason I think this could go further down yet (although got to start looking attractive for a takeover soon). As for others SSE are a bit of a loser here...Not too sure about the others tbh. To be fair to the chancellor he had to do a big bang here simply due to market sensitivities. Still not nice for drax holders.

Suggests the figures banded about yesterday do not include lost business which would explain the fall and probable further fall today.