Drax's Strong Free Cash-Flow Generation Gives Shareholder, Investment Options -- Market Talk

Dow Jones12-11

0817 GMT - For Drax, the increasingly limited long-term role of biomass in the U.K.'s energy system provides it with a strategic challenge, HSBC says. The government's aim to develop alternative options to unabated biomass and the continued uncertainty regarding bioenergy with carbon capture and storage are expected to be long-term structural headwinds, HSBC says. Still, the U.K. government's contract for difference--the primary mechanism for supporting new low-carbon electricity generation--gives the power-generation company some breathing room to asses its strategic options, HSBC says. "We expect free cash-flow generation for the next five years to remain strong, providing plenty of headroom for attractive shareholder distributions and strategic investments," it says. Shares are up 2.6% at 7.81 pounds. (anthony.orunagoriainoff@dowjones.com)

(END) Dow Jones Newswires

December 11, 2025 03:17 ET (08:17 GMT)

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Still, the U.K. government's contract for difference--the primary mechanism for supporting new low-carbon electricity generation--gives the power-generation company some breathing room to asses its strategic options, HSBC says. \"We expect free cash-flow generation for the next five years to remain strong, providing plenty of headroom for attractive shareholder distributions and strategic investments,\" it says. Shares are up 2.6% at 7.81 pounds. 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