Drax lifts dividend as full-year profits jump

Power generation company Drax posted a surge in full-year profits on Thursday and lifted its dividend, as Britons struggled to pay their energy bills.

In the year to the end of December 2023, pre-tax profit jumped to £796m from £78m a year earlier, while adjusted earnings before interest, tax, depreciation and amortisation rose 66% to £1.2bn.

Drax proposed a final dividend of 13.9p a share, up 10% on the year.

The company said its full-year 2024 expectations for adjusted EBITDA are in line with analysts' consensus estimates of £882m to £1.1bn.

Chief executive Will Gardiner said: "Drax performed strongly in 2023 and we remained the single largest provider of renewable power by output in the UK. We have created a business which plays an essential role in supporting energy security, providing dispatchable, renewable power for millions of homes and businesses, particularly during periods of peak demand when there is low wind and solar power.

"Policy support for our UK BECCS project continues to progress and we remain in formal discussions with the UK Government to ensure Drax Power Station can play a long-term role in UK energy security, creating thousands of jobs during construction and helping the country reach Net Zero.

"We have made further progress in our ambition to be a world leader in carbon removals and have visibility of high-quality, long-term earnings to 2042 and a strong balance sheet which supports returns to shareholders and investment in growth, both in the UK and internationally."

At 0818 GMT, the shares were up 5.5% at 442.06p.