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Tuesday preview: Drax Group releases interim results

Power station firm Drax Group will unleash its latest results Tuesday on the back of an estimated earnings fall for 2012.

Power station firm Drax Group will unleash its latest results Tuesday on the back of an estimated earnings fall for 2012.

Some analysts predict the company will report annual revenues to the tune of £1.80bn and pre-tax profits of £220.52m, down from the previous year's respective £1.85bn and £338.1, according to data compiled by Digital Look.

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The data also forecasts a 15% drop in earnings per share to 47.63 and a dividend of 23.89p for the period.

The results come after the group announced in December it had secured committed financing to support the group's transformation into a predominantly biomass-fuelled electricity generator.

Drax received a £100m amortising term loan facility with the UK Green Investment Bank and a £400 revolving credit facility maturing in April 2016, which replaced the existing £310m revolving credit facility.

As of June 30th this year, the group held net cash of £233m, which was also used to help fund the development.

Credit Suisse said the execution risk needs to be managed despite securing financing and the potential of cash flow generation.

"Drax is now entering the most risky part of its plans: successfully delivering the investment. It will be [the second half of 2013] before we hear on how successful the first unit conversion has been," the broker said last month.

"We do not think Drax will be able to demonstrate the financials until the first pelletisation plant contributes, in 2014.

Last week Citigroup increased its target price from 525p to 590p and retained a 'neutral' rating for the company.

Tuesday February 19

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

New Car Registrations (EU) (10:00)

ZEW Survey (EU) (10:00)

ZEW Survey (GER) (10:00)

Q4

Bank of Georgia Holdings

GMS

Fortune Oil, Weatherly International

FINALS

AZ Electronic Materials SA (DI), Bank of Georgia Holdings, Brammer, Drax Group

EGMS

Phoenix Group Holdings (DI)

AGMS

Foresight 2 VCT, Foresight 2 VCT 'C' Shares, Foresight 2 VCT Infrastructure Shares, Foresight 2 VCT Planned Exit Shares, Sunrise Resources , Tertiary Minerals, Titon Holdings

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