Ipswich-based energy retailer Haven Power targets further growth after successful 2016

Jonathan Kini, chief executive of Drax Retail, which includes Ipswich-based Haven Power, at Drax Pow

Jonathan Kini, chief executive of Drax Retail, which includes Ipswich-based Haven Power, at Drax Power Station, near Selby in North Yorkshire. Picture: DRAX GROUP - Credit: Archant

The boss of Haven Power, the specialist supplier of energy to the business sector based on Ransomes Europark, says he is confident of further growth after a “really strong” performance over the past 12 months.

The Ipswich headquarters of Haven Power.

The Ipswich headquarters of Haven Power. - Credit: Archant

Parent group Drax, a major generator of electricity, today reported lower revenues and underlying earnings for the year to December 31 amid “challenging” commodity markets and the end of Climate Change Levy exemptions for electricity generated from renewable sources.

But retail revenues grew from £1.290bn in 2015 to £1.326bn last year as Haven Power continued to add new customers, including a drive into the Small and Medium-sized Enterprise (SME) sector alongside further growth in the industrial and commercial (I&C) market, where new clients included Thames Water.

The group’s retail business is set for further growth this year, with Drax having just completed the £340m acquisition of Northampton-based Opus Energy, which is focused on the SME market.

However, Jonathan Kini, who was already head at Haven Power and now leads both businesses as Drax Retail chief executive, said the size and the diversity of the SME market was such that the Ipswich business would also continue to target growth among smaller firms in addition to expanding its established base of larger business customers.

“We have had a really strong year,” said Mr Kini. “The Haven organisation has focused on growth and revenue has increased as we have taken on more businesses.”

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The workforce at Haven in Ipswich had increased by around 30 during 2016, with the total now well above 400, he said, and with its offices at The Havens on Ransomes Europark now at capacity it was taking additional space at Franciscan House in the town centre.

Dorothy Thompson, Drax Group chief executive.

Dorothy Thompson, Drax Group chief executive. Picture: DRAX GROUP - Credit: Archant

“As we grow our customer base we will continue to recruit more people,” added Mr Kini.

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The increase in retail revenues was accompanied by growth at the group’s biomass operations, but this was offset by a tougher year for the core Drax Power generation business, with group-wide revenues dipping from £3.065bn to £2.950bn and underlying earnings halving, from £46m to £21m.

At the bottom line, however, statutory pre-tax profit increased more than three-fold from £59.0m to £197.1m, largely reflecting a one-off asset obsolescence charge of £109.2m taken the previous year together with an increase in unrealised gains on derivative contracts at the year-end.

Drax Power has been refocused in recent years, increasingly burning biomass rather than coal, and in December, alongside the Opus acquisition, the group further diversified its generation mix by agreeing an £18.5m deal to buy four OCGT (open cycle gas turbine) developments.

Drax Group chief executive Dorothy Thompson said: “We are playing a vital role in helping change the way energy is generated, supplied and used as the UK moves to a low carbon future.

“With the right conditions, we can do even more, converting further units to run on compressed wood pellets. This is the fastest and most reliable way to support the UK’s decarbonisation targets, whilst minimising the cost to households and businesses.

“In a challenging commodity environment Drax has delivered a good operational performance with 65% renewable power generation.

“The acquisition of Opus Energy and rapid response open cycle gas turbine projects are an important step in delivering our strategy, diversifying our earnings base and contributing to stronger, long-term financial performance across the markets in which we operate.”

She added: “Haven Power has delivered a good performance with volumes at scale and improved gross margin.

“The year ahead will see Haven and Opus working closely together to deliver a compelling offer to the UK’s businesses. The two businesses complement each other perfectly, and two challenger brands will between them offer expertise and experience in supplying gas and electricity to both SME and I&C customers.”

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