Key Takeaways

• Drax Group plc shares rose 1.56% to 783.50p, supported by strong financial results and new agreements.
• Adjusted EBITDA reached £947 million, with a 7% increase in earnings per share and an 11.5% dividend hike announced.
• The company plans job cuts as part of a restructuring, focusing on efficiency while continuing to invest in renewable energy initiatives.

Financial Performance and Strategic Moves

Drax Group plc (LSE: DRX) experienced a positive trading session on Thursday, closing at 783.50p—up 1.56%. This uptick follows a generally supportive trading range established after the company’s full-year results for 2025, which featured an adjusted EBITDA of £947 million. The report indicated record production levels in both biomass power and pellets.

Earnings per share rose by 7%, reaching 137.7 pence for the year. In light of these results, Drax’s board approved an 11.5% increase in the dividend and announced a new share buyback program. The company maintains a robust balance sheet, with net debt at £784 million, well below its long-term target. This financial position facilitates further investment in areas such as battery energy storage, data centers, and bioenergy with carbon capture and storage.

Government Agreements and Acquisitions

Drax has also secured a significant dispatchable power agreement with the UK government that extends its supply commitments from Drax Power Station for an additional four years beyond 2027. This agreement enhances the company’s long-term revenue visibility.

In January 2026, Drax completed the £36 million acquisition of Flexitricity, a UK optimizer of flexible energy assets, which further strengthens its Energy Solutions division. However, the company is currently navigating a restructuring process that could affect up to 350 jobs, approximately 10% of its workforce, particularly within its Canadian operations.

Market Outlook

Analysts from Citi upgraded Drax to a Buy rating in December 2025, setting a target price of 850p. This recommendation reflects the firm’s belief in minimal downside risk and a favorable policy landscape for renewable energy generation. The stock’s 52-week price range has been between 616.50p and 937.50p, indicating that Thursday’s closing price positions it centrally within that spectrum, although still short of previous highs.

The recent gains in Drax’s stock indicate a sustained investor confidence in the company’s strategy as the UK transitions to cleaner, more sustainable sources of dispatchable power.

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