In a significant move aligned with its decarbonisation strategy, Drax Group has announced the sale of 90,000 small and medium-sized customer meter points to EDF Energy. This decision underscores Drax's commitment to focusing on industrial and commercial customers, renewable power, and energy services.
The Journey: From Opus Acquisition to EDF Sale
Drax's relationship with Opus began in February 2017 when it acquired Opus Energy as part of a strategic move to expand its retail business and diversify its revenue streams. This acquisition allowed Drax to enter the small and medium-sized business market, providing a broader customer base and increased market presence.
Fast forward to today, Drax has decided to sell these small and medium-sized customer meter points to EDF Energy. The company stated in its announcement on the London Stock Exchange:
"Drax believes that these measures further support its decarbonisation strategy and the development of its energy solutions (customers) business which is focused on industrial and commercial customers, renewable power and energy services."
EDF Energy, which already serves over 200,000 SME customers, will integrate these additional meter points into its existing portfolio, enhancing its service offerings and market reach.
Supporting Decarbonisation Efforts
By offloading the small and medium-sized meter points, Drax can streamline its operations and concentrate on larger industrial and commercial clients, which are crucial for significant energy efficiency and decarbonisation projects.
No Impact on Energy Solutions Business
One of the key takeaways from this sale is that it does not affect Drax's Energy Solutions business. This segment, which provides renewable power and energy services, remains robust and continues to perform as expected. Importantly, Drax reassures stakeholders that there will be no change to the group's energy solutions earnings before interest, tax, depreciation, and amortisation (EBITDA) expectations.
"The Energy Solutions business is unaffected by the sale of the Opus SME assets, and there is no change to the group’s energy solutions earnings before interest, tax, depreciation and amortisation (EBITDA) expectations as a result of this process."
Expert Opinion
Scott McCaw, Director of Energy Saving Guru, commented on the sale:
"The sale of these meter points to EDF Energy aligns with Drax's focus on decarbonisation and efficiency. It's a strategic move that allows Drax to hone in on larger industrial and commercial clients, which are pivotal for impactful energy solutions and renewable initiatives."
Strong Financial Performance
Despite this divestiture, Drax's overall business performance remains strong. In April, the company revealed that its trading was in line with expectations for the year and that it was on track to achieve its full-year EBITDA targets.
Looking Ahead: Electric Vehicle Charging
As part of its commitment to renewable energy and supporting a decarbonised future, Drax is also investing in new technologies such as electric vehicle
for homes. This complements their broader strategy of providing sustainable energy solutions across various sectors.
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