olivLaw · European equity research
Drax Group plc DRX.L
United Kingdom · London Stock Exchange · ISIN GB00B1VNSX38 · Vertical: Listed companies from United Kingdom
Drax Group is a British energy company that generates electricity from biomass, operates hydro assets and provides flexibility services and energy solutions. In 2025 it reported Adjusted EBITDA of 947 million pounds, and its growth plan centres on flexible renewable power, battery storage and decarbonisation at a time when the UK power system increasingly needs balancing.
At the close of 05 Nov 2026, Drax Group plc (DRX.L) stock was 8.59 GBP (+0.12% on the day), with market capitalisation 3.0 bn GBP, P/E 42.5 on diluted EPS of 0.20 GBP over the last 12 months, dividend yield 1.82%, beta 0.26, 52-week range 7.04–9.18 GBP.
Data as of · AI analysis dated · Source: ESEF annual reports and closing prices, computed by olivLaw.
Price history
Loading chart…
Technical reading
- RSI (14)
- 67.4
- strong (55–70)
- Bollinger (20, 2)
- 7.57 – 8.58
- above the upper band · %B 1.01 · band width 12.4%
- SMA 50 / 200
- 8.03 / 8.18
- mixed trend
- MACD (12, 26, 9)
- 0.14 / 0.08
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | EURO STOXX 50 | vs EURO STOXX 50 | Vertical median | |
|---|---|---|---|---|
| 1 month | +10.1% | −0.6% | +10.8 pp | — |
| 3 months | +19.6% | −4.2% | +23.7 pp | — |
| 6 months | −0.7% | +4.3% | −5.0 pp | — |
| Year to date | +2.6% | +7.5% | −4.9 pp | — |
| 1 year | +18.6% | +9.9% | +8.7 pp | +5.8% |
| 3 years | +98.2% | +49.8% | +48.4 pp | +26.3% |
| 5 years | +57.8% | +42.8% | +14.9 pp | — |
Price returns, dividends excluded.
Quarterly results
ESEF annual reports carry no quarters: the results are annual (below).
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 100 percentile of its own 3-quarter history (min 3.5, median 4.8, max 41.4; quarters with earnings only).
Fiscal years
| Fiscal year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | 7.7 bn | 6.2 bn | 5.4 bn |
| Revenue YoY | unavailable | −20.3% | −12.5% |
| Net income | 562.2 m | 526.6 m | 73.0 m |
| Net income YoY | unavailable | −6.3% | −86.1% |
| Diluted EPS | 1.40 | 1.35 | 0.20 |
| Diluted EPS YoY | unavailable | −3.4% | −85.0% |
| net % | 7.3% | 8.5% | 1.4% |
| Free cash flow | 405.8 m | 479.7 m | 528.0 m |
Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 302.1 m GBP
- Financial debt
- 979.0 m GBP
- Net debt
- 676.9 m GBP
- Equity
- 1.7 bn GBP
- Total assets
- unavailable GBP
- Debt / equity
- 0.57x
- Current ratio
- 1.07x
- ROE
- 3.8%
- ROA
- unavailable
- FCF margin
- 9.8%
Financial statements (source on every figure)
Revenue and net income (GBP)
Margins
Income statement · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Revenue | 7.7 bn | 6.2 bn | 5.4 bn | esef· 29 Apr 2026verified |
| Cost of revenue | 5.6 bn | 4.1 bn | 3.9 bn | esef· 29 Apr 2026verified |
| Gross profit | 2.0 bn | 1.9 bn | 1.5 bn | esef· 29 Apr 2026verified |
| Operating income | 908.2 m | 850.2 m | 241.3 m | esef· 29 Apr 2026verified |
| Interest expense | — | 107.5 m | 75.4 m | esef· 29 Apr 2026verified |
| Pre-tax income | 796.4 m | 753.4 m | 189.5 m | esef· 29 Apr 2026verified |
| Income tax | 235.5 m | 227.9 m | 121.3 m | esef· 29 Apr 2026verified |
| Net income | 562.2 m | 526.6 m | 73.0 m | esef· 29 Apr 2026verified |
| Diluted EPS | 1.40 | 1.35 | 0.20 | esef· 29 Apr 2026verified |
| Dividend per share | 0.14 | 0.16 | — | esef· 29 Apr 2026verified |
Balance sheet · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Cash | 379.5 m | 356.0 m | 302.1 m | esef· 29 Apr 2026verified |
| Inventories | 328.4 m | 302.0 m | 223.8 m | esef· 29 Apr 2026verified |
| Current assets | 2.3 bn | 1.8 bn | 1.5 bn | esef· 29 Apr 2026verified |
| Property, plant & equipment, net | 2.7 bn | 2.8 bn | 2.4 bn | esef· 29 Apr 2026verified |
| Goodwill | 416.7 m | 415.1 m | 396.2 m | esef· 29 Apr 2026verified |
| Intangibles (excl. goodwill) | 81.5 m | 68.1 m | 42.7 m | esef· 29 Apr 2026verified |
| Short-term debt | 264.2 m | 119.0 m | 61.3 m | esef· 29 Apr 2026verified |
| Long-term debt | 1.2 bn | 1.1 bn | 917.7 m | esef· 29 Apr 2026verified |
| Current liabilities | 2.1 bn | 1.5 bn | 1.4 bn | esef· 29 Apr 2026verified |
| Equity | 2.0 bn | 2.1 bn | 1.7 bn | esef· 29 Apr 2026verified |
| Shares outstanding at year end | 393.7 m | 383.0 m | 352.7 m | esef· 29 Apr 2026derived |
Cash flow · GBP
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Operating cash flow | 835.6 m | 859.5 m | 810.0 m | esef· 29 Apr 2026verified |
| Capex | 429.8 m | 379.8 m | 282.0 m | esef· 29 Apr 2026verified |
| Free cash flow | 405.8 m ≈ | 479.7 m ≈ | 528.0 m ≈ | esef· 29 Apr 2026derived |
| Investing cash flow | -451.8 m | -389.9 m | -287.2 m | esef· 29 Apr 2026verified |
| Financing cash flow | -237.9 m | -491.6 m | -578.9 m | esef· 29 Apr 2026verified |
| Share repurchases | 149.2 m | 115.4 m | 221.1 m | esef· 29 Apr 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
- score weight coverage: 58.3% of at least 60%
A scoring methodology on indicators and valuation, not investment advice.
Closing price
05 Nov 2026Source: olivLaw, closing series
Market cap: 3.0 bn GBP
Key indicators
Coverage and freshness
Score by group
58% · Insufficient data
Estimated value range
unavailable — no valuation assumptions for the reporting currency
Valuation assumptions are editorial choices, not measured; beta is not measured.
Valuation methods
Assumptions (illustrative, editorial)
- Risk-free rate
- 6.5%
- Equity risk premium
- 6.0%
- Beta (default)
- 1.00
- Cost of equity
- 12.5%
- Terminal growth
- 3.0%
Factor scorecard
Insufficient data
Minimum-evidence gate: score weight coverage: 58.3% of at least 60%
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 7.7% | 25 (vs peers) | 18% |
| Net margin · Quality | 1.4% | 26 (vs peers) | 11% |
| FCF conversion · Quality | 723.3% | 100 (on a fixed band) | 11% |
| Revenue CAGR 3Y · Growth | unavailable | unavailable | — |
| EPS CAGR 3Y · Growth | unavailable | unavailable | — |
| Net debt / EBITDA · Balance sheet | unavailable | unavailable | — |
| Interest coverage · Balance sheet | 3.2x | 26 (on a fixed band) | 11% |
| Current ratio · Balance sheet | 1.1x | 23 (on a fixed band) | 7% |
| P/E (TTM) · Valuation | 42.5x | 0 (vs peers) | 18% |
| EV/EBITDA · Valuation | unavailable | unavailable | — |
| FCF yield · Valuation | 17.4% | 100 (on a fixed band) | 14% |
| Shareholder yield (distributions) · Returns | 7.3% | 100 (on a fixed band) | 11% |
| Payout ratio (FCF) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet25/100 · 2/3 factors with a value
- Growth· partialunavailable · 0/2 factors with a value
- Quality46/100 · 3/3 factors with a value
- Returns· partial100/100 · 1/2 factors with a value
- Valuation44/100 · 2/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
DRAX GROUP PLC (DRX.L). Latest full fiscal year: 2025; data up to 2025-12-31.
Figures computed from the financial statements: revenue 5.4 bn GBP in 2025; YoY growth -12.5%; net margin 1.4%; ROE 3.9%.
The estimated value range is 2.28–3.52 GBP per share (median of 3 methods, agreement: low); assumptions are illustrative. Against the central value of 2.91 GBP, the price of 8.59 GBP leaves a potential of -66.1% (value / price − 1) and a margin of safety of -194.8% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
Insufficient data for a verdict (score weight coverage: 58.3% of at least 60%).
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- FCF conversion: 723.3%
- FCF yield: 17.4%
- Shareholder yield (distributions): 7.3%
What contradicts it
- ROIC: 7.7%
- Net margin: 1.4%
- Interest coverage: 3.2x
- Current ratio: 1.1x
- P/E (TTM): 42.5x
- The price is above the estimated value range
- The valuation methods diverge
Not assessed (insufficient data or a ratio without meaning): Revenue CAGR 3Y, EPS CAGR 3Y, Net debt / EBITDA, EV/EBITDA, Payout ratio (FCF).
Versus the vertical median
Listed companies from United Kingdom · same country · compared with 39 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| BATS.LBritish American Tobacco P.L.C. | 104.3 bn | 13.5 | 16.5% | 30.3% | −1.0% | +7% / +88% |
| ABF.LAssociated British Foods PLC | 14.7 bn | 14.3 | 9.2% | 5.3% | −3.1% | −5% / −15% |
| 0EV1.LCarnival PLC | 5.5 bn | 4.1 | 46.7% | 13.4% | +6.4% | unavailable / unavailable |
| BAB.LBabcock International Group PLC | 5.1 bn | 24.7 | 34.7% | 4.1% | +7.2% | −10% / +158% |
| AUTO.LAutotrader Group PLC | 4.8 bn | 16.4 | 60.2% | 47.1% | +3.9% | −13% / −23% |
| BBY.LBalfour Beatty PLC | 4.2 bn | 16.3 | 23.2% | 2.8% | +15.2% | +20% / +160% |
| ABDN.LAberdeen Group PLC | 4.1 bn | 10.8 | 8.0% | 28.9% | −2.1% | +11% / +41% |
| BKG.LThe Berkeley Group Holdings PLC | 3.6 bn | 11.3 | 8.8% | 13.4% | −4.2% | −0% / −22% |
| DRX.LDrax Group PLC | 3.0 bn | 42.5 | 3.9% | 1.4% | −12.5% | +16% / +97% |
| BME.LB&M European Value Retail PLC | 2.9 bn | 17.4 | 21.2% | 2.8% | +3.7% | +68% / −51% |
| AJB.LAj Bell PLC | 2.4 bn | 22.8 | 49.9% | 33.1% | +18.0% | +8% / +128% |
| ASHM.LAshmore Group PLC | 1.4 bn | 13.9 | 13.1% | 71.6% | −0.1% | +28% / +18% |
| BCG.LBaltic Classifieds Group PLC | 1.2 bn | 23.2 | 15.8% | 57.6% | +6.9% | −99% / −99% |
| APN.LApplied Nutrition PLC | 763.6 m | 36.2 | 41.2% | 19.7% | +24.2% | +71% / unavailable |
| BAG.LA.G. Barr P.L.C. | 671.9 m | 14.4 | 14.4% | 10.8% | +4.0% | −7% / +26% |
| ASC.LAsos PLC | 494.5 m | — | -81.3% | -12.0% | −14.7% | +71% / +8% |
| ALFA.LAlfa Financial Software Holdings PLC | 486.8 m | 16.3 | 61.5% | 23.8% | +15.3% | −28% / +10% |
| AML.LAston Martin Lagonda Global Holdings PLC | 344.3 m | — | -93.4% | -39.2% | −20.6% | −45% / −85% |
| APTD.LAptitude Software Group PLC | 111.3 m | 28.5 | 7.2% | 6.2% | −7.3% | −30% / −23% |
| AMGO.LAmigo Holdings PLC | 9.9 m | — | — | — | −81.9% | +325% / +844% |
| ASBE.LAssociated British Engineering PLC | 605.3 k | — | -19.1% | — | unavailable | unavailable / unavailable |
| AMIF.LAmicorp Fs (uk) PLC | 221.6 k | 0.1 | 27.5% | 9.1% | +8.1% | unavailable / unavailable |
| AAF.LAirtel Africa PLC | — | — | 24.1% | 10.6% | +29.5% | −7% / +164% |
| AAL.LAnglo American PLC | — | — | -19.3% | -20.2% | +4.5% | +30% / +76% |
| ACG.LAcg Metals Limited | — | — | -80.3% | -32.0% | +134.8% | +60% / +63% |
1- and 3-year price returns: for DRX.L from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (GBP)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 4.71 Total return -44% · Per year -44% | 8.36 Total return -1% · Per year -1% | 12.65 Total return 49% · Per year 49% |
| 3 years | 3.74 Total return -53% · Per year -22% | 7.55 Total return -7% · Per year -2% | 12.65 Total return 54% · Per year 15% |
| 5 years | 2.97 Total return -60% · Per year -17% | 6.81 Total return -13% · Per year -3% | 12.65 Total return 58% · Per year 10% |
- Exit P/E± 1.89
- Net margin± 1.32
- Annual revenue growth± 1.19
- Annual dilution± 0.11
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
In brief
Drax Group is a British energy company that generates electricity from biomass, operates hydro assets and provides flexibility services and energy solutions. In 2025 it reported Adjusted EBITDA of 947 million pounds, and its growth plan centres on flexible renewable power, battery storage and decarbonisation at a time when the UK power system increasingly needs balancing.
SWOT
Strengths
- The group has a diversified asset base spanning hydro, biomass and pellet production, which reduces reliance on a single income stream.
- The balance sheet is considered solid, with net debt well below the long-term target and extended committed facilities during 2025.
- Integration of pellet production with the power station secures a controlled supply chain.
Weaknesses
- Results depend heavily on power prices, which fell in 2025 and significantly reduced profitability.
- The Canadian assets carry legacy contracts that limit profitability, and some assets were impaired in 2025.
- The SME business made losses and was ultimately divested, showing the difficulty of the small customer segment.
Opportunities
- Battery storage development could bring new flexibility revenue as projects are completed.
- BECCS projects could become a carbon removal source if government support materialises.
- The Flexitricity acquisition could expand asset optimisation and flexibility services.
Threats
- Regulatory changes on biomass, including sustainability criteria, could limit supply or reduce the value of output.
- Extreme weather events could disrupt the pellet supply chain and biomass output.
- A lack of government support could delay investment in new technologies and decarbonisation.
Risks
- Power priceshigh
A lower achieved power price could again reduce Adjusted EBITDA, given the dependence of results on the energy market.
- Biomass policyhigh
Changes to sustainability criteria or the tax treatment of biomass could affect the plant's business model.
- Asset impairmentmedium
The impairment losses recorded in 2025 show that asset values could be reassessed if market conditions change.
- Storage project executionmedium
Delays in completing the BESS projects could postpone the planned flexibility revenue.
- Climate and supply chainlow
Extreme weather could disrupt pellet production and deliveries, with effects on generation.
Investment thesis
What would need to be true (bull case)
- If the British power system keeps raising its need for flexibility, the group's hydro and storage assets could generate steadier revenue than pure generation.
- A strengthened balance sheet and a reducing share count could support a growing dividend if operating results remain solid.
- Integrating pellet production with the power station could protect margins during periods of price volatility.
What would break the thesis
- Dependence on power prices and government policy could make results hard to predict, as in 2025.
- Impairment losses and the legacy Canadian contracts could limit profitability in the short term.
- Biomass regulatory changes could raise costs or reduce demand, weakening the revenue base.
What to watch
- Completion of the BESS projects, including Marfleet2027
- Trend in net debt to Adjusted EBITDA against the target of around 2 timesnext 10-K
- Evolution of biomass sustainability criteria and regulation (EUDR, REDIII)2026
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
The business
The group aims to keep its balance sheet strong, invest in the core business and pay a sustainable, growing dividend, returning capital beyond investment needs to shareholders. Net debt to Adjusted EBITDA stood at 0.8 times at the end of 2025, well below the long-term target of around 2 times 1. The number of outstanding shares fell 8% in 2025 under an ongoing buyback programme 1.
In parallel, the company is developing battery storage projects, having agreed to acquire three BESS projects from Apatura Limited that will provide total capacity of 260 MW, and is exploring carbon removal through BECCS, including a joint development agreement with HOFOR for a facility in Denmark 1.
Segments
Flexible generation and energy solutions (FlexGen)
The FlexGen segment reported Adjusted EBITDA of 111 million pounds for hydro, down from 138 million in 2024, reflecting planned outage work at Cruachan Power Station 1. Energy Solutions recorded 49 million pounds, of which the industrial and renewables services business contributed 54 million, while the SME business (Opus) lost 5 million. The sale of the remaining SME meter points completed in May 2025 1.
Pellet production
Pellet production reached a record 4.2 million tonnes in 2025, up from 4.0 million in 2024, and shipments were 5.1 million tonnes, of which 3.1 million went to Drax Power Station 1. Adjusted EBITDA fell to 129 million pounds from 143 million, because the transfer price follows a cost-plus methodology, so cost savings lower the transfer price 1.
Market context
Drax operates in the British electricity market and in balancing services, where demand for flexible capacity and storage grows as the share of intermittent generation rises 1. The report notes that as the system moves to net zero it needs more balancing services, which may support the group's flexible assets 1. On the other hand, power prices and government support directly influence margins, and the company stresses that government support will be critical for investment 1.
Regulatory pressure on biomass, including sustainability criteria and carbon pricing mechanisms, also shapes the group's operating conditions. Management believes a CBAM-type mechanism would not materially affect its operations but is monitoring developments closely 1.
Trends
- Shift to flexible renewable powertailwind
A rising share of intermittent generation increases the need for balancing and storage, which could favour Drax's flexible assets such as hydro and batteries 1.
- Battery storagetailwind
The acquisition of BESS projects and the tolling agreement with West Burton C signal growing interest in storage, which could become a new revenue source if projects are completed on schedule 1.
- Biomass regulationheadwind
New biomass rules, including EUDR and REDIII, could raise compliance costs and affect the supply chain, although the company is actively tracking them 1.
- Power prices and government supportmixed
Lower achieved power prices reduced Adjusted EBITDA in 2025, and the company says government support could be decisive in attracting costly investment 1.
Competitive position
Drax competes in the British electricity market with other generators and flexibility providers, as well as with battery storage operators. The consulted sources do not name specific competitors and do not allow a quantitative comparison of market shares 1.
In pellets, the group's advantage lies in integrating its supply chain with its own power station, although costs and transfer prices influence results. The US business performed well on production and margins, while the Canadian assets carry legacy contracts that limit profitability 1.
- Independent battery storage operators
Compete with Drax's BESS projects for flexibility services; the sources do not name specific companies.
- North American wood pellet producers
Compete in the biomass pellet market, where the US business has performed well; the sources do not name specific companies.
- Gas and coal power generators
Compete in the British power market; the report only mentions coal being displaced by biomass.
- Industrial energy services providers
Compete in the I&C and renewables services segment, where Drax reported significant revenue.
News & filings
In the press
- Drax Unveils £20 Billion AI Data Centre Plans at UK Biomass PlantOil Price · 03 Nov 2026 · EN
- UK’s Drax power plant set to host $27B AI data center projectAnadolu Agency (TR, EN) · 03 Nov 2026 · EN
- Drax wants to feed Britain's AI habit with £20B datacenter at biomass power stationThe Register · 03 Nov 2026 · EN
- UK’s most polluting power plant could power country’s largest AI datacentreThe Guardian World · 03 Nov 2026 · EN
- Brookfield targets $27 billion AI data center at power station. Energy firm Drax surges 8%CNBC World · 03 Nov 2026 · EN
- Brookfield, QIA to Invest in Data Center for DraxBloomberg Markets · 03 Nov 2026 · EN
- Drax datacentre could create nearly twice the yearly emissions of all Gatwick flightsThe Guardian — Environment · 06 Oct 2026 · EN
- JPMorgan, Santander Lead £1.1 Billion Loan for Drax Solar DealBloomberg Markets · 18 Sept 2026 · EN
- FCA closes investigation into Drax over biomass sourcingThe Guardian World · 18 Jun 2026 · RO
Annual reports (ESEF)
- Annual report 202529 Apr 2026
- Annual report 202407 May 2025
Sources
- [1] Annual report, fiscal year ended 2025-12-31 (ESEF) · SEC / Drax Group plc · 31 Dec 2025
Figures computed by olivLaw from ESEF annual reports and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.