Three things you need to know as the UK financial markets open, from Tony Cross.
#1. Drax sees EBITDA, dividends up and net debt down
Power generation company Drax LON:DRX issued half year results this morning noting adjusted EBITDA up by almost 25%, net debt down by around 20% and a 10% uplift in the interim dividend. Full year EBITDA is now set to come in at the top end of analyst estimates and the outlook for 2025 is robust, too. The note adds that the company welcomes the launch of GB Energy and looks forward to working with the government to move to net zero energy production – something that has been on the Drax agenda for some time as it closed down the UK’s last coal power station a year ago.
#2. Operating profits leap at Babcock
Babcock International LON:BAB has issued full year results for the period to 31st March with revenues down fractionally but operating profits well up. The contract backlog has grown, driven by nuclear and marine work, FY25 expectations remain unchanged and 70% of next year’s revenues are already under contract. A final dividend of 3.3p is proposed, taking the full year payment to 5p per share.
#3. Dividend jumps 9% at NatWest as impairment charges fall
Half year results are out from NatWest LON:NWG this morning, noting operating profits of £3bn, a return on tangible equity of 16.4% and a 6p interim dividend. Impairment charges for the period are £48m – down from the £223m of a year ago – and the company has provided updated guidance. RoTE this year is set to come in no lower than 14%, with a figure above 13% expected next year. Operating costs are set to remain stable and FY24 impairment rates are expected to come in below 15 basis points – that could be something of a red flag for the wider economic outlook given the low rates being reported so far.
