Drax CEO Dorothy Thompson to step down

Power generation company Drax announced on Thursday that chief executive Dorothy Thompson has decided to step down at the end of 2017 after 12 years in the role.

Thompson will be replaced by Will Gardiner, the current chief financial officer, with effect from 1 January 2018. He joined as CFO back November 2015 and the company said his promotion follows a "thorough" selection process involving internal and external candidates.

Drax will kick off the process to appoint a new group CFO and will also review the option to make an appointment on an interim basis.

Thompson said: "Drax Group plays a strategic role in the UK electricity sector generating around 16% of UK renewable electricity is a world leader in the production of wood pellets and is a leading challenger brand in the supply of electricity to businesses. I retire knowing the group is in excellent shape: it has the right strategy, the right team and in Will, the right leader."

Chairman Philip Cox said: "We are delighted Will is to become chief executive. He has been a key architect of our new strategy and is a focused, innovative and engaging leader. His appointment is a natural progression after two years working alongside Dorothy developing an ambitious strategy which I am confident will create significant benefits for all Drax's stakeholders."

RBC Capital Markets said that while this announcement wasn’t entirely expected, it has been of the view that Thompson may be coming to the end of her tenure, although it thought she might take the opportunity to try one more role rather than head into retirement.

"Over the past twelve years she has led a transformation at Drax and navigated the company through some extremely difficult regulatory and political issues. We imagine the majority of shareholders will be disappointed to see her leave. However, the shareholder register of Drax is extremely concentrated (top five own around 66%) and major shareholders will no doubt have been consulted on the change."

RBC said Gardiner is "ideally placed" to take up the reigns at Drax. "He has impressed in his two years at the company and has been involved in the more recent transformation of the company as it moves away from a pure- play commodity sensitive generator into a more balanced growth entity."

At 1010 BST, the shares were up 2.1% to 316.80p.