# Drax Group (DRX.LSE)

Canonical: https://gigainvestors.com/s/DRX.LSE

Analysis as of: 2026-10-16T07:38:42.484Z. Financial observations: FY2002–FY2025.

Listing currency: GBX. Reporting currency: GBP.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: GBX 773.50 per share; close as of 2026-10-15.

Estimated value: low GBX 324.24 per share, central GBX 360.96 per share, high GBX 409.85 per share. Buy at or below the central value GBX 360.96 per share. Valuation as of 2026-10-16T07:38:42.484Z; scenarios are not confidence intervals.

Expected annual return: 5.9% at the stated quote. About 5.9% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; GB 10-year bond 5.4% + 4 points).

## Checklist

### understandable: fail

- 4 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 2

- Operating margin variation: 0.95×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.07×

- FY2017: -0.03×

- FY2018: 0.01×

- FY2019: 0.02×

- FY2020: 0.03×

- FY2021: 0.04×

- FY2022: 0.03×

- FY2023: 0.11×

- FY2024: 0.14×

- FY2025: 0.10×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 7.8%

- ROIC, second-lowest year: 2.9%

- Typical minus recent gross margin: -5.1 pp

- Typical gross margin (annual median): 16.3%

- Recent gross margin (lower of latest and 3-year median): 21.5%

- Years with nonpositive capital: 0

- Capital spending / revenue: 4.1%

- ROIC including acquisitions, ten-year median: 2.0%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 9.4%

- FY2017: -4.8%

- FY2018: 3.2%

- FY2019: 2.9%

- FY2020: 5.1%

- FY2021: 6.3%

- FY2022: 11.2%

- FY2023: 23.4%

- FY2024: 22.8%

- FY2025: 16.5%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.75×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: GBP 980M

- Net income, five-year total: GBP 1.3B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -2.3 pp

- Working capital / revenue, change between three-year averages: -15.0 pp

- Working capital / revenue, final three-year average: -4.2%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.54×

- FY2022: 1.40×

- FY2023: 0.83×

- FY2024: 0.68×

- FY2025: 0.08×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 3.2% vs 22.8%

- Per-share earnings: 0.14 to 1.34 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.6%

- Ordinary dilution, 5-year annual growth: 1.7%

- Market cap gain: GBP 2.1B

- Cumulative retained earnings: GBP 544M

- Diluted shares, 10-year annual growth: 0.6%

- Diluted shares, 5-year annual growth: 1.7%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 32.9%

- Per-share value change: GBP 1.21

- Per-share value, starting three-year median: GBP 0.14

- Per-share value, ending three-year median: GBP 1.34

- Buybacks concentrated in cheaper years (correlation): 0.90

- Average buyback yield: 4.4%

- Buyback history: 5 years

- Debt-funded buybacks: No

- Acquisition spending: GBP 622M

- Cumulative net income, 10 years: GBP 1.2B

- ROIC, first three-year median: 3.2%

- ROIC, last three-year median: 22.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: GBP 0.49

- FY2017: GBP -0.37

- FY2018: GBP 0.05

- FY2019: GBP 0.00

- FY2020: GBP -0.49

- FY2021: GBP 0.13

- FY2022: GBP 0.21

- FY2023: GBP 1.41

- FY2024: GBP 1.34

- FY2025: GBP 0.17

### accounting: pass

- Sloan accruals: -16.4%

- Receivables to sales index (DSRI): 0.81×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 1.9%

- Earnings backed by cash: Yes

- Operating cash / earnings: 11.09×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.26×

Chart: Sloan accruals; fiscal year observations.

- FY2016: 0.1%

- FY2017: -13.3%

- FY2018: -6.4%

- FY2019: -8.8%

- FY2020: -11.9%

- FY2021: -4.3%

- FY2022: -1.9%

- FY2023: -4.5%

- FY2024: -6.2%

- FY2025: -16.4%

## Holders

## Price story

Price needs cash profits to grow 11.7% a year for ten years · sales -13.1%

Story as of 2026-10-16T10:00:10.167Z; price observation 2026-10-15.

Price needs cash profits to grow 11.7% a year for ten years

- 2026-06-01: Drax Group Pauses Buyback as £561M Bluefield Solar Deal Boosts UK Renewables ([finance.yahoo.com](https://finance.yahoo.com/sectors/energy/articles/drax-group-pauses-buyback-561m-120311549.html))

### Sales · FY2024–2025

sales -13.1%; source https://filings.xbrl.org/549300YPSNTXR4ZHSR98/2025-12-31/ESEF/GB/0/549300YPSNTXR4ZHSR98-2025-12-31/reports/549300YPSNTXR4ZHSR98-2025-12-31-T01.xhtml; observed 2026-04-29.

- FY2016: GBP 2.9B 

- FY2017: GBP 3.7B 

- FY2018: GBP 4.2B 

- FY2019: GBP 4.7B 

- FY2020: GBP 4.2B 

- FY2021: GBP 5.1B 

- FY2022: GBP 7.8B 

- FY2023: GBP 8.1B 

- FY2024: GBP 6.2B 

- FY2025: GBP 5.4B 

### Gross margin · FY2025

gross margin 21.5%; source https://filings.xbrl.org/549300YPSNTXR4ZHSR98/2025-12-31/ESEF/GB/0/549300YPSNTXR4ZHSR98-2025-12-31/reports/549300YPSNTXR4ZHSR98-2025-12-31-T01.xhtml; observed 2026-04-29.

- FY2016: 12.8% 

- FY2017: 14.8% 

- FY2018: 15.1% 

- FY2019: 15.6% 

- FY2020: 17.1% 

- FY2021: 17.5% 

- FY2022: 13.2% 

- FY2023: 21.9% 

- FY2024: 30.5% 

- FY2025: 21.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in utilities renewable; annual sales are GBP 5.4 billion.

- Source: https://filings.xbrl.org/549300YPSNTXR4ZHSR98/2025-12-31/ESEF/GB/0/549300YPSNTXR4ZHSR98-2025-12-31/reports/549300YPSNTXR4ZHSR98-2025-12-31-T01.xhtml (filed 2026-04-29); FY2025: revenue 5355400000; grossProfit 1150500000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DRX.LSE: Drax Group plc, together with its subsidiaries, engages in renewable power generation in the United Kingdom. The company operates through four segments: Pellet Production, Biomass Generation, Flexible Generation, and Energy Solutions. The company provides renewable, dispatchable power, and system support services. It is involved in production and sale of biomass pellets; generation and sale of electricity from biomass assets, pumped storage, run-of-river hydro, and OCGTs assets; and processing and sale of waste-derived pellets, as well as supply of electricity to non-domestic customers. The company owns and operates Drax Power Station located in Selby, North Yorkshire; Cruachan Power Station, a pumped storage hydro station, with an installed capacity of 440 megawatts (MW) located in Argyll and Bute; and Lanark and Galloway hydro-electric power stations with an installed capacity of 126 MW located in south-west Scotland. In addition, it owns and operates Daldowie fuel plant that processes sludge, a plant that converts it into dry low-odour fuel pellets. Further, the company manufactures and sells compressed wood pellets; and supplies renewable electricity. Drax Group plc was incorporated in 2005 and is based in Selby, the United Kingdom.

### Why customers stay

Margins ranged from 21.5% to 30.5% during 2023–25; it earns 7.8% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-29); FY2023: grossProfit / revenue = 21.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-29); FY2024: grossProfit / revenue = 30.5%.

- Source: https://filings.xbrl.org/549300YPSNTXR4ZHSR98/2025-12-31/ESEF/GB/0/549300YPSNTXR4ZHSR98-2025-12-31/reports/549300YPSNTXR4ZHSR98-2025-12-31-T01.xhtml (filed 2026-04-29); FY2025: grossProfit / revenue = 21.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-29); 10-year return on capital observations [[2016,0.09424540690783711],[2017,-0.048242073425114725],[2018,0.03245205331021779],[2019,0.029055531824006834],[2020,0.05092341748800928],[2021,0.06265636497424577],[2022,0.11196825113707304],[2023,0.23379513340203803],[2024,0.22813666603628424],[2025,0.16454241338112305]]; median 0.07845088594104144. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back GBP 221.1 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-29); FY2016: growth capex 0; upkeep 93200000; owner earnings 210200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-29); FY2018: growth capex 0; upkeep 132600000; owner earnings 61400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-29); FY2019: growth capex 0; upkeep 171400000; owner earnings 30500000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-29); FY2021: growth capex 10300000; upkeep 199400000; owner earnings 29920000. Growth capex / owner earnings = 0.3442513368983957.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-29); FY2022: growth capex 0; upkeep 174700000; owner earnings 119180000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-29); FY2023: growth capex 148005940.46112514; upkeep 293094059.53887486; owner earnings 466945940.46112514. Growth capex / owner earnings = 0.31696590041015066.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-29); FY2024: growth capex 0; upkeep 387500000; owner earnings 357600000. Growth capex / owner earnings = 0.

- Source: https://filings.xbrl.org/549300YPSNTXR4ZHSR98/2025-12-31/ESEF/GB/0/549300YPSNTXR4ZHSR98-2025-12-31/reports/549300YPSNTXR4ZHSR98-2025-12-31-T01.xhtml (filed 2026-04-29); FY2025: growth capex 0; upkeep 282000000; owner earnings 6060000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-29); Dividend observations: [[2016,11000000],[2017,21600000],[2018,52500000],[2019,58900000],[2020,64700000],[2021,70900000],[2022,78900000],[2023,86300000],[2024,93500000],[2025,95700000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://filings.xbrl.org/549300YPSNTXR4ZHSR98/2025-12-31/ESEF/GB/0/549300YPSNTXR4ZHSR98-2025-12-31/reports/549300YPSNTXR4ZHSR98-2025-12-31-T01.xhtml (filed 2026-04-29); FY2025: cash repurchases 221100000 GBP.

### Are managers owners

Insiders own 0.8% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DRX.LSE SharesStats.PercentInsiders = 0.754 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 11.7% yearly over ten years; actual decline was 20.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-29); Ten-year compound average after fade. Initial solved rate 0.1559828685604786. Price 773.5; FX 100; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.13829525915008598 → FY2025 0.014022454438592756. Closing-price date 2026-10-15.

## Monthly share-price history (GBX per share)

- 2016-10: GBX 316.90 per share

- 2016-11: GBX 283.60 per share

- 2016-12: GBX 377.90 per share

- 2017-01: GBX 370.40 per share

- 2017-02: GBX 351.50 per share

- 2017-03: GBX 325.40 per share

- 2017-04: GBX 323.00 per share

- 2017-05: GBX 346.20 per share

- 2017-06: GBX 325.70 per share

- 2017-07: GBX 318.40 per share

- 2017-08: GBX 308.40 per share

- 2017-09: GBX 311.30 per share

- 2017-10: GBX 277.80 per share

- 2017-11: GBX 270.60 per share

- 2017-12: GBX 270.60 per share

- 2018-01: GBX 260.00 per share

- 2018-02: GBX 248.60 per share

- 2018-03: GBX 274.60 per share

- 2018-04: GBX 316.00 per share

- 2018-05: GBX 328.60 per share

- 2018-06: GBX 327.80 per share

- 2018-07: GBX 363.80 per share

- 2018-08: GBX 382.20 per share

- 2018-09: GBX 388.20 per share

- 2018-10: GBX 401.60 per share

- 2018-11: GBX 390.60 per share

- 2018-12: GBX 358.80 per share

- 2019-01: GBX 401.80 per share

- 2019-02: GBX 364.80 per share

- 2019-03: GBX 378.40 per share

- 2019-04: GBX 341.00 per share

- 2019-05: GBX 294.80 per share

- 2019-06: GBX 260.20 per share

- 2019-07: GBX 302.40 per share

- 2019-08: GBX 270.00 per share

- 2019-09: GBX 276.20 per share

- 2019-10: GBX 296.80 per share

- 2019-11: GBX 279.00 per share

- 2019-12: GBX 314.00 per share

- 2020-01: GBX 272.00 per share

- 2020-02: GBX 270.00 per share

- 2020-03: GBX 153.70 per share

- 2020-04: GBX 208.80 per share

- 2020-05: GBX 210.40 per share

- 2020-06: GBX 257.20 per share

- 2020-07: GBX 280.00 per share

- 2020-08: GBX 280.20 per share

- 2020-09: GBX 266.20 per share

- 2020-10: GBX 295.80 per share

- 2020-11: GBX 328.40 per share

- 2020-12: GBX 375.00 per share

- 2021-01: GBX 373.60 per share

- 2021-02: GBX 382.20 per share

- 2021-03: GBX 420.00 per share

- 2021-04: GBX 408.60 per share

- 2021-05: GBX 435.80 per share

- 2021-06: GBX 424.20 per share

- 2021-07: GBX 403.00 per share

- 2021-08: GBX 414.80 per share

- 2021-09: GBX 481.80 per share

- 2021-10: GBX 530.50 per share

- 2021-11: GBX 550.00 per share

- 2021-12: GBX 605.00 per share

- 2022-01: GBX 601.00 per share

- 2022-02: GBX 706.00 per share

- 2022-03: GBX 786.00 per share

- 2022-04: GBX 808.00 per share

- 2022-05: GBX 673.50 per share

- 2022-06: GBX 643.00 per share

- 2022-07: GBX 784.50 per share

- 2022-08: GBX 636.00 per share

- 2022-09: GBX 600.50 per share

- 2022-10: GBX 521.00 per share

- 2022-11: GBX 607.50 per share

- 2022-12: GBX 703.00 per share

- 2023-01: GBX 646.00 per share

- 2023-02: GBX 636.50 per share

- 2023-03: GBX 607.50 per share

- 2023-04: GBX 629.60 per share

- 2023-05: GBX 553.40 per share

- 2023-06: GBX 580.00 per share

- 2023-07: GBX 604.80 per share

- 2023-08: GBX 552.00 per share

- 2023-09: GBX 438.80 per share

- 2023-10: GBX 422.60 per share

- 2023-11: GBX 436.80 per share

- 2023-12: GBX 489.70 per share

- 2024-01: GBX 509.20 per share

- 2024-02: GBX 465.70 per share

- 2024-03: GBX 501.40 per share

- 2024-04: GBX 518.00 per share

- 2024-05: GBX 518.50 per share

- 2024-06: GBX 492.20 per share

- 2024-07: GBX 648.50 per share

- 2024-08: GBX 638.50 per share

- 2024-09: GBX 644.50 per share

- 2024-10: GBX 623.00 per share

- 2024-11: GBX 667.00 per share

- 2024-12: GBX 648.00 per share

- 2025-01: GBX 622.50 per share

- 2025-02: GBX 610.00 per share

- 2025-03: GBX 585.50 per share

- 2025-04: GBX 617.00 per share

- 2025-05: GBX 661.00 per share

- 2025-06: GBX 693.00 per share

- 2025-07: GBX 707.50 per share

- 2025-08: GBX 650.00 per share

- 2025-09: GBX 699.50 per share

- 2025-10: GBX 721.50 per share

- 2025-11: GBX 743.00 per share

- 2025-12: GBX 837.00 per share

- 2026-01: GBX 901.00 per share

- 2026-02: GBX 887.00 per share

- 2026-03: GBX 885.50 per share

- 2026-04: GBX 883.60 per share

- 2026-05: GBX 791.50 per share

- 2026-06: GBX 759.00 per share

- 2026-07: GBX 737.50 per share

- 2026-08: GBX 775.00 per share

- 2026-09: GBX 815.50 per share

- 2026-10: GBX 773.50 per share

## Annual estimated value (GBX per share)

- FY2016: low GBX 190.78 per share, central GBX 211.23 per share, high GBX 238.46 per share

- FY2017: low GBX 218.41 per share, central GBX 243.49 per share, high GBX 276.87 per share

- FY2018: low GBX 260.19 per share, central GBX 289.10 per share, high GBX 327.59 per share

- FY2019: low GBX 266.75 per share, central GBX 292.75 per share, high GBX 327.37 per share

- FY2020: low GBX 127.28 per share, central GBX 137.71 per share, high GBX 151.60 per share

- FY2021: low GBX 130.76 per share, central GBX 141.63 per share, high GBX 156.09 per share

- FY2022: low GBX 190.21 per share, central GBX 260.44 per share, high GBX 302.20 per share

- FY2023: low GBX 234.45 per share, central GBX 311.52 per share, high GBX 356.40 per share

- FY2024: low GBX 322.99 per share, central GBX 359.34 per share, high GBX 407.71 per share

- FY2025: low GBX 252.74 per share, central GBX 281.36 per share, high GBX 319.47 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original ESEF filing](https://filings.xbrl.org/549300YPSNTXR4ZHSR98/2025-12-31/ESEF/GB/0/549300YPSNTXR4ZHSR98-2025-12-31/reports/549300YPSNTXR4ZHSR98-2025-12-31-T01.xhtml); period 2025-12-31, filed 2026-04-29.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations