Drax Group (DRX) Trading Update summary

Financial performance and outlook

• Full year 2025 Adj. EBITDA expected at the top end of consensus estimates, reflecting strong operational and financial performance.

• Targeting post-2027 Adj. EBITDA of £600-700 million per annum, underpinned by cost management and a new low-carbon CfD agreement.

• Free cash flow target of £3 billion from 2025 to 2031, supporting £1 billion in shareholder returns and up to £2 billion for growth investments.

• Over £2.3 billion in contracted forward power sales between 2025 and Q1 2027, with RO generation fully hedged for 2025 and 2026.

• Ongoing share buyback programmes and interim dividend payments, with c.33 million shares repurchased for £216 million in 2025.

Growth and investment initiatives

• Focused on expanding FlexGen (flexible generation) portfolio, including pumped storage, hydro, OCGT, and BESS assets.

• £80 million investment in Cruachan Power Station upgrades, adding 40MW by 2027 and backed by 15-year Capacity Market agreements.

• Acquisition of three BESS projects totaling 260MW, with staged payments through 2028.

• Developing a GW-scale pipeline of BESS opportunities and providing market access for 2,000 third-party renewable assets.

• Retaining OCGT assets in the FlexGen portfolio to support grid flexibility and decarbonisation.

Drax Power Station and data centre opportunities

• Exploring options to utilise 4GW of site capacity and grid access for flexible, renewable energy and data centre development.

• Preparing a planning application for a 100MW data centre, with ambition to grow to over 1GW post-2031.

• Signed a CfD agreement to provide 6TWh of biomass generation annually from 2027-2031, with a mechanism to supply up to 500MW to a data centre.

• Assessing long-term options for distributed, renewable power directly to data centres under long-term PPAs.