Drax Group (LON:DRX) Issues Earnings Results

Drax Group (LON:DRX) announced its quarterly earnings data on Thursday. The company reported GBX 137.70 earnings per share for the quarter, Digital Look Earnings reports. Drax Group had a return on equity of 31.63% and a net margin of 9.42%.

Here are the key takeaways from Drax Group’s conference call:

• Signed a low‑carbon dispatchable CfD for Drax Power Station that will sell ~6 TWh/year with flexible reprofiling, underpinning the company’s plan to generate about GBP 3 billion of free cash flow between 2025–2031 and support earnings under the new operating regime.
• Accelerating growth strategy — planning up to 1 GW+ of data center capacity at the Drax site (phased 100 MW front‑of‑meter then ~500 MW behind‑the‑meter pre‑2031) and building a gigawatt‑scale BESS pipeline with operational control/agreements for over 700 MW and acquisition of Flexitricity to optimize assets.
• Strong 2025 financials and balance sheet strength — GBP 947 million Adjusted EBITDA, record 15 TWh biomass generation, net debt of GBP 784 million (0.8x EBITDA), an expected 11.5% dividend increase and ongoing buybacks, providing headroom to fund growth and returns.
• Material write‑downs and project pauses in pellets/BECCS — a GBP 198 million charge on the Canadian pellet business, a GBP 139 million impairment on Longview, and a GBP 48 million BECCS impairment, with no near‑term capital commitment to Canadian expansion.
• Implementing a “Future Focused” cost and restructuring programme (consultation to reduce 350+ roles) targeting >GBP 150 million of structural savings by 2027, which management says is already reflected in the post‑2027 EBITDA guidance but may involve one‑off charges.

Drax Group Trading Up 1.9%

Shares of DRX traded up GBX 17 on Thursday, hitting GBX 899.50. 878,326 shares of the stock traded hands, compared to its average volume of 6,713,544. The company has a quick ratio of 0.32, a current ratio of 1.26 and a debt-to-equity ratio of 64.11. The firm has a market capitalization of £3.05 billion, a P/E ratio of 8.35, a P/E/G ratio of 0.10 and a beta of 1.22. The stock’s 50 day moving average is GBX 873.85 and its two-hundred day moving average is GBX 768.20. Drax Group has a 1 year low of GBX 534.50 and a 1 year high of GBX 937.50.

Wall Street Analysts Forecast Growth

DRX has been the subject of several recent analyst reports. Royal Bank Of Canada reissued an “outperform” rating and issued a GBX 950 price target on shares of Drax Group in a report on Wednesday, November 5th. Citigroup raised their target price on Drax Group from GBX 850 to GBX 923 and gave the company a “buy” rating in a report on Thursday, February 12th. Finally, Jefferies Financial Group upped their price target on shares of Drax Group from GBX 750 to GBX 1,120 and gave the stock a “buy” rating in a research note on Wednesday, January 7th. Four research analysts have rated the stock with a Buy rating, According to data from MarketBeat.com, the stock currently has a consensus rating of “Buy” and an average target price of GBX 998.25.

Drax Group News Summary

Here are the key news stories impacting Drax Group this week:

• Positive Sentiment: Earnings beat and targets reaffirmed — Drax reported stronger‑than‑expected full‑year results (quarterly EPS GBX 137.70) and reaffirmed medium‑term targets, which drove investor confidence. Drax beats full-year earnings, reaffirms medium-term targets
• Positive Sentiment: Strong operational detail — Management highlighted robust pellet production and record renewable generation in 2025 (supplying ~6% of UK power), supporting margins and earnings quality. UK power firm Drax beats profit expectations on strong pellet production
• Positive Sentiment: Final dividend announced — Drax declared a final dividend of 17.4 pence per share for 2025, boosting income appeal for investors. Drax Declares Final 17.4p Dividend for 2025
• Positive Sentiment: New CfD underpins renewables growth — Drax said a new Contract for Difference supports its renewables expansion, improving revenue visibility from low‑carbon generation. Drax boosts renewables output, dividend and buybacks as new CfD underpins growth push
• Positive Sentiment: Ongoing buybacks tighten free float — The company continued repurchases and increased treasury holdings, reducing shares outstanding and supporting EPS and share price. Drax Tightens Free Float With Further Share Buyback
• Neutral Sentiment: Corporate actions and voting‑rights update — Announcements on lift of treasury holdings and voting‑rights changes were disclosed alongside buybacks; these affect ownership structure and governance but are mixed in impact. Drax Continues Share Buyback, Lifts Treasury Holdings and Updates Voting Rights
• Positive Sentiment: Market reaction — Coverage notes Drax shares reaching multi‑year highs after the results, reflecting the combined effect of beat, dividends, renewables progress and buybacks. Drax Rises to 20-Year High After Earnings Beat Expectations

About Drax Group

Drax Group plc, together with its subsidiaries, engages in renewable power generation in the United Kingdom. It operates through three segments: Pellet Production, Generation, and Customers. The Pellet Production segment produces and sells biomass pellets. The Generation segment provides renewable, dispatchable power, and system support services to the electricity grid. The Customers segment supplies electricity and gas to non-domestic customers. The company owns and operates Drax Power Station located in Selby, North Yorkshire; Cruachan Power Station, a pumped storage hydro station, with an installed capacity of 440 megawatts (MW) located in Argyll and Bute; and Lanark and Galloway hydro-electric power stations with an installed capacity of 126 MW located in southwest Scotland.