Drax Group (LSE:DRX) PLC will give its shareholders a £150mln windfall after reporting strong system support and generation performance during the first three months of 2023.
Shares in the FTSE 250 listed company surged 4.4% following the update putting it top of the FTSE 250 risers.
The buyback will commence in the second quarter and complete by end-2023.
In a trading update, Drax said 2023 adjusted EBITDA would be in line with expectations which it put between £1.1bn to £1.2bn with the consensus figure £1.16bn.
It added that it would defer plans to invest about £50m in carbon capture technology at its power plant’s biomass burning units this year while it waits for the government to include the project in its funding scheme.
Will Gardiner, the chief executive of Drax, set out plans to pause the project as it emerged that the energy regulator has opened an investigation into whether the company’s activities are aligned with biomass sustainability rules.
Reflecting the reprofiling of investment in UK BECCS, Drax now expects capital investment in 2023 to be in the range of £520-580mln (down from £570-630mln.
Drax will host a Capital Markets Day on 23 May, updating on its plans for growth with a focus on BECCS.