Drax profits soar despite windfall tax, shares jump 6.6%

Drax Group (LSE: DRX) reported a significant leap in profits for 2023, attributing it to lower sales costs and higher revenue despite a windfall tax burden.

The company’s profit surged to £796 million compared to £78 million the year prior, even after paying a £204.6 million windfall tax, a new expense for 2023. This positive performance was driven by a 4.5% increase in revenue to £8.13 billion and a 12% decrease in cost of sales to £5.97 billion.

Drax also declared a final dividend of 13.9 pence per share, up 10% from the previous year, bringing the total dividend to 23.1p, a 10% increase as well.

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While Land Securities Group announced the resignation of their CFO Vanessa Simms from her non-executive director position at Drax, Drax CEO Will Gardiner expressed confidence in the company’s future, stating their continued role in supporting the UK’s energy security and their belief in a long-term role in the nation’s decarbonisation efforts.

The FTSE 250 electricity company’s share price jumped 6.6% following the news in early trade on Thursday morning.