special dividend at drax- Electricity generator D unveiled a 326 million special dividend as it announced a STEEP JUMP in first half profits. page22; lombard, page 20
"THE PUREST PLAY- ONCE(11) upon a time, ftse 100 companies were content to do just one thing well. D a relative newcomer to the index, is a rare THROWBACK to that ERA. its SOLE important asset is the yorks(NY) power stn that supplies SEVEN percent of BRITISH energy needs and generates EMISSIONS sufficient to supply a small but VOCAL TENTED village of environmentalists with MATERIAL for a ten day protest.
its results should be fairly predictable-ESSENTIALLY, the price it gets paid, less the cost of the fuel, MINUS overheads. the city still managed to range widely with its first half FORECASTS, but tuesdays drop in the share price was due more to concern about weakening wholesale electricity prices.
even that is over-STATED in D case. the group has LOCKED-in either PRICE/MARGIN on ninety3 per cent of expected OUTPUT for 06 and sixty5% for 07. that should cover most of the WINTER leaving ENOUGH flexibility for the EXPERTS on the SELBY trading floor(?) to PLAY the SPOT market as required- a STRATEGY made possible by refinancing in 05.
a decline in oil,gas and as a CONSEQUENCE electricity prices clearly does not FAVOUR D despite the REDUCTION in the price of its KEY raw material coal. but D never made any BONES about that when it came to market- and threw in a PROMISE to pay out the EXCESS cash FLOW.
TUESDAYS special dividendwas duly at the top of the forecast range. "PURE PLAY" is an UNHAPPY piece of modern JARGON but it is as GOOD a way as any to describe draxs OLD-fashioned CORPORATE VIRTUES" lombard
i find this all rather bizare and distressing especially considering one man the chairman is making 3.8 million personally out of the special dividend. someone asked me if that is before or after tax, what difference does THAT make?
i would like to take this opportunity to heap praise on all the people who helped set up the climate camp, what heroines and heroes! SPECTACULAR in a truly situationist SENSE. love and THANX
BRING it ON