Winning this year’s Small Treasury Team of the Year Award was electrical power generation company Drax Group, which demonstrated a high level of performance across the board – from getting the basics right to harnessing attractive funding opportunities – without losing sight of the importance of the team.
For Drax’s treasury team, 2019 was characterised by a major focus on sustainability. As well as undertaking Europe’s largest decarbonisation project and reducing carbon emissions by more than 80% since 2012, the company is also pursuing negative carbon emissions by developing bioenergy carbon capture and storage.
For treasury, this has meant pursuing company objectives by supporting and helping to shape a transformative M&A process, while carrying out a wide range of transactions.
Highlights of the year include:
In addition, Drax automated its cash management process via a treasury management system implementation, which also involved changing its money market funds platform provider to improve efficiency – a project that reinforces one of the team’s core objectives: namely to ‘do basics right’. Other projects include setting up a new defined benefit pension scheme.
Alongside all this, the team continued to focus on day-to-day treasury activities, including managing risk across a multibillion, complex six-year financial derivative portfolio. Group treasurer Chris King and deputy group treasurer Lisa Dukes have implemented a number of award-winning innovative new derivatives capturing value by focusing on continual improvement and new approaches to substantially enhance risk-adjusted return.
Additionally, the team manages an insurance portfolio covering risks of more than £1bn. The team also manages cash flow and liquidity, including a highly challenging working capital profile. Other activities include debt and capital markets, with around £1.2bn of debt spanning half a dozen markets, as well as the management of two defined benefit pension schemes.
Team development is, of course, an important consideration within this category. With Drax’s treasury team located predominantly in North Yorkshire, recruiting treasury professionals is a particular challenge.
Drax seeks to overcome this by recruiting impressive individuals with a strong interest in learning about treasury, while supporting the team’s learning via the Association of Corporate Treasurers (ACT) qualifications.
Likewise, the treasury team spends a lot of time educating the rest of the organisation about treasury, thereby solidifying its role as a valued and respected resource.
“There was a lot to like about Drax’s achievements, from innovation around FX management to acquisition financing. Added to that, the team has a considerable focus on working well with each other, as well as engaging with the wider treasury community.”
This article was taken from the October/November 2020 issue of The Treasurer magazine.