FTSE 250 movers: Drax powers ahead, no appetite for Currys

(Sharecast News) - FTSE 250: 18,898.13, -0.73% at 1551 GMT. UK energy producer Drax said it expected full-year earnings to be slightly above the top of the range of analyst expectations on the back of higher prices and a strong pumped storage and hydro performance in the second half of 2022.

The company's own compiled consensus for 2022 adjusted core earnings was £668m, with a range of £651-£681m.

Drax generated 20% of UK renewables at peak demand from January to November. The company, which continues to benefit from higher power prices, added it will continue to optimise its biomass operations to ensure more renewable power is available especially as the UK looks to face a difficult winter.

In October the company also cashed in on a fall in short-term gas and power prices and bought back forward sold energy output from its biomass units that it had pre-sold at higher prices.

It also revealed it had been in talks with the government about the energy windfall tax and possible adjustments to reflect higher running costs, with an update expected shortly.

Drax operates a power plant at the village of Drax, near Selby in North Yorkshire, that is Britain's biggest power station and primarily burns biomass wood pellets. It has also kept two old coal units open there at the request of the government. It also runs four pumped storage and hydroelectric plants and has a business producing some of its own wood pellet supplies at sites in America.

"Over the past 12 months the cost of biomass in the European spot market has increased significantly, with cargoes trading at over three times their historic average," the company said.

"Reflecting higher production costs in its own supply chain, those of third parties and higher spot market prices, Drax has incurred additional costs in the second half of 2022, securing biomass to support its reliable and dispatchable generation. Accordingly, the group currently expects its all-in contracted cost of biomass for the UK generation business to be over £100/MWh in 2023."

"This is above the historic average, in part reflecting increased transportation and fuel costs associated with higher energy costs, inflation and the lower value of sterling captured in the group's foreign exchange hedges."

Shipping services firm Clarkson surged after an upgrade to 'overweight' at JPMorgan.

Electricals retailer Currys cut its full-year profit outlook on Thursday as it said it swung to a loss in the first half after its international business took a hit due to heavy discounting from competitors. Shares in the firm fell on the news.

In an update for the half to 29 October, the company said it now expects 2023 adjusted pre-tax profit of between £100m and £125m, down from previous guidance of £125m to £145m on a like-for-like basis.

During the half, Currys swung to an adjusted pre-tax loss of £17m from a profit of £48m a year earlier, with revenues down 7% to £4.5bn.

Currys said its performance in the UK & Ireland strengthened again, but the international segment was hit by temporary market disruption, as competitors discounted excess stock heavily.

Chief executive Alex Baldock said: "Our international business, which has consistently delivered growth in sales and profits over many years, has had a difficult first half with margins sharply down. Lower demand has left domestic competitors with excess stock, which they're now heavily discounting.

"This has substantially disrupted the market, and required margin investment to keep our sales strong. We expect these pressures, intense though they are, to be temporary - demand will normalise, excess stock will wash through, and competitors will find unprofitable aggression hard to sustain. We've also stepped up our self-help actions on margins and cost."

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 168.80p 4.00% Octopus Renewables Infrastructure Trust (ORIT) 100.60p 3.82% Clarkson (CKN) 2,970.00p 3.66% Abrdn Private Equity Opportunities Trust (APEO) 425.00p 2.41% Just Group (JUST) 77.60p 2.17% Bellway (BWY) 1,957.50p 2.14% Drax Group (DRX) 639.00p 2.00% Vistry Group (VTY) 628.00p 1.95% Redrow (RDW) 465.80p 1.93% Mitchells & Butlers (MAB) 134.10p 1.82%

FTSE 250 - Fallers

National Express Group (NEX) 144.00p -6.37% Syncona Limited NPV (SYNC) 185.60p -5.79% Molten Ventures (GROW) 365.60p -5.24% Helios Towers (HTWS) 103.50p -4.61% Bridgepoint Group (Reg S) (BPT) 190.90p -4.50% Hochschild Mining (HOC) 67.35p -4.47% Discoverie Group (DSCV) 770.00p -4.11% Ascential (ASCL) 193.60p -3.87% Currys (CURY) 62.80p -3.83% Diploma (DPLM) 2,838.00p -3.54%