Related Articles
Drax Group lifted annual profit guidance on Thursday, having been bolstered by strong pellet production and biomass generation.
The group, which generates energy by burning wood pellets, told investors it now expects its annual adjusted core profit to come in at the top end of analyst forecasts.
Drax said its pellet production arm was performing well, with output ahead of last year, while operations at Drax Power Station, Britain’s largest single source of round the clock renewable power, was also progressing well.
Drax, which generates around 6 per cent of Britain’s electricity, said it still planned to generate recurring adjusted EBITDA of around £600million to £700million beyond 2027.
Analysts’ consensus for 2025 adjusted earnings before interest, taxes, depreciation and amortization was £874million, with a range of £848million to £896million.
Drax shares rose 0.41 per cent or 2.5p to 619.50p on Thursday, having risen over 20 per cent in the last year.
Share performance: Drax shares have risen by around 20% in the last year
Chief executive Will Gardiner, said: ‘Through delivering strong operational performance we have supported energy security.
‘Thousands of workers at Drax and throughout our supply chain keep the lights on for millions of this country’s homes and businesses.
‘The UK’s target for a clean power system and increase in intermittent renewables means more dispatchable and reliable generation will be required to help keep the lights on when the wind isn’t blowing or the sun isn’t shining.
‘We are working to create value and growth in the short, medium and long-term, aligned to the UK’s energy needs and underpinned by a strong balance sheet and cash generation, a disciplined approach to capital allocation and attractive returns for shareholders.’
Last month, Energy Secretary Ed Miliband was accused by some US activists of being complicit in the pollution of a town in Mississippi by handing billions in taxpayer cash to Drax.
Drax operates a power plant in Selby, North Yorkshire, that generates electricity by burning wood pellets. Many of these are sourced from forests in the US and shipped to Britain.
Activists from Gloster in Mississippi, where Drax runs a wood pellet factory, claimed pollution from its plant has caused health issues for people nearby, including heart disease, cancer and respiratory problems.
Drax burns millions of tons of wood pellets each year. It claims this is carbon neutral, because the planting of new trees can compensate for the carbon dioxide produced. Environmental groups dispute these assertions.
It has received billions in green energy subsidies from the government. In February, Ed Miliband agreed to hand the firm another £2billion in taxpayer cash over four years.
In April, a Drax spokesman said: ‘The safety of our people and the communities in which we operate is our priority, and we have created a community advisory panel made up of local leaders and citizens to help us better understand and respond to their concerns.
‘All Drax facilities in the United States have been below the permitted air emissions requirements since December 2023.’
In March, Drax announced it had secured agreements to provide 434 megawatts of capacity primarily from its pumped storage and hydro assets.
The group said in March that the deal had a value of around £24million and covered the period October 2028 to September 2029.
It also secured a provisional agreement to provide 24 megawatts of capacity for the refurbishment of Glenlee power station in the Galloway region of Scotland.
That deal covers the period October 2028 to September 2043 and has a value of approximately £20million.
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
InvestEngine
InvestEngine
Account and trading fee-free ETF investing
Trading 212
Trading 212
Free share dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
Compare the best investing account for you
Source link
