Drax Group (LON:DRX) shares plunged on Thursday after it said it was notified of a Financial Conduct Authority (FCA) investigation into the company.
The probe, initiated on August 26, 2025, covers the period from January 2022 to March 2024.
The FCA's investigation focuses on historical statements made by Drax regarding its biomass sourcing and the compliance of its 2021, 2022, and 2023 Annual Reports with Listing Rules and Disclosure Guidance and Transparency Rules.
Markets reacted negatively to the news, with Drax shares currently down more than 9% at 637.5p. The stock earlier hit a low of 614p. The investigation introduces a layer of uncertainty for investors.
Drax has stated it is cooperating fully with the FCA.
In July, the company reported its interim results, with operating profit coming in at £301 million, down from £518 million in H1 2024. Profit before tax also fell from £463 million to £281 million.
“Across the Group we are confident in our ability to generate significant free cash flow through 2031 and are focused on aligning the business to deliver,” commented Drax Group CEO, Will Gardiner. “The energy transition is creating significant value opportunities aligned with the UK's energy needs and we will continue to explore investing in those in a disciplined fashion consistent with our capital allocation policy.”
Drax shares are down 1.2% in 2025 and 3.4% in the last 12 months.
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