Drax extends share buyback program by £450m amid strong earnings

Published 31/07/2025, 08:32
© Reuters.

Investing.com -- Drax PLC (LON:DRX) on Thursday announced a £450 million extension to its share buyback program, representing 20% of its current market capitalization.

This extension follows the company’s ongoing £300 million buyback program, of which £272 million has already been completed. The new buyback will be implemented over three years after the current program concludes, expected in late summer or early autumn.

The expanded buyback is supported by approximately £0.5 billion of positive working capital inflow anticipated from the end of the Renewables Obligation scheme in 2027.

For the first half of 2025, Drax reported EBITDA of £460 million and earnings per share of 65.6. The company’s net debt to EBITDA ratio stands at 1.1x, compared to 0.9x for the full year 2024.

Drax expects its full-year 2025 EBITDA to align with analyst consensus of £899 million, with estimates ranging from £889 million to £910 million.

The company also reported an increase in hedged prices for future years. At the half-year mark, Drax’s hedged prices (in £/MWh) for 2025/26/27 were 113.7/76.8/79.2, with 10.5/10.2/1.8TWh hedged.

These figures represent an increase from the first quarter trading update, which showed hedged prices of 110.8/76.8/78.1.

Drax anticipates signing a final agreement with the UK government "later this year" regarding the bridging mechanism.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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