May 23 2013 Latest news:
Tuesday, February 19, 2013
A BUSINESS electricity retail company saw its retail sales soar by 60% last year, as it continues to go for growth.
Ipswich-based Haven Power, which employs 350 staff, was bought three and a half years ago by Drax Group plc, which published its results yesterday.
Drax is moving its main electricity-producing business in phases from coal-fired energy generation to biomass, by converting three of its six units in Yorkshire over the coming few years. The first unit is due to come on stream in April, and the second next year.
Overall, it made profits before tax of £190million, compared to profits of £338m in 2011. Its underlying earnings were £193m, compared to £202m in 2011.
This was in line with expectations, the group said, and the drop was a result of a number of factors including commodity prices, increased operational costs and extensive research and development on its biomass project.
“We say we did well because we delivered in line with expectation,” said Drax chief executive Dorothy Thompson. “I’m pleased with the results.”
It had been a “pivotal” year for the company, she added, and it had taken time to work out what was technically possible in terms of converting to biomass and burning it efficiently and reliably.
“We actually raised the funding, finished the technical work and received the mandate from Government for coming from a predominantly coal-fired generator to biomass generator,” she said.
“It’s a very cost-effective renewable and a good complement to a wind strategy.”
Government decided last year it was going to double the support for biomass burnt in what were previously coal-fired electricity stations, she explained.
Meanwhile, Haven has delivered “substantial growth” in 2012, the company said, and is expected to make modest losses up to 2015 as it continues to expand its market share.
Staff numbers had increased significantly and there had been significant investment in systems.
Over the next three years, it is expected to either double or triple the amount of electricity it supplies to customers, said Ms Thompson, who said she was “very pleased” with its performance.
“We think this works well with our biomass strategy because we think there’s a real interest amongst customers to buy renewables,” she said.
She pointed out that last year, Haven Power was ranked number one for customer satisfaction in the small and medium enterprise market by Datamonitor.
Drax has ambitions to make Haven, which is led by Peter Bennell, a very large supplier of energy, she said, adding that Haven had a “very strong and very capable team”.
“Our vision for Drax is to be a bold, customer-oriented power generation and retail business, driven by biomass innovation. We have two key strategic initiatives to enable us to achieve our vision, namely our project to convert Drax Power Station into a predominantly biomass-fuelled generating asset, and our programme for the expansion of our retail business, Haven Power Ltd, through growing our sales to businesses.”