Yellow Cake Interim Net Asset Value Rises On Increased Uranium Price

LONDON (Alliance News) - Yellow Cake PLC released its first interim results Monday since its July ...

Alliance News 26 November, 2018 | 11:59AM
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LONDON (Alliance News) - Yellow Cake PLC released its first interim results Monday since its July initial public offering on AIM.

The uranium investor posted a pretax profit of USD44.2 million for the period January 18 to September 30.

At September 30, Yellow Cake's net asset value was 239 pence, a 20% increase from its IPO price of 200p.

Yellow Cake also said its NAV has increased since the end of September to 249p per share at October 31.

The profit and rise in NAV was attributed to the rise in spot price of uranium.

"The beginning of Yellow Cake's life on the public markets has been incredibly rewarding. Following our oversubscribed IPO and purchases totalling over 8.4 million pounds of uranium from Kazatomprom as part of our ten-year framework agreement, an improving uranium spot price has recently seen the value of our inventory increase by 38%, in line with the thesis we presented to investors at the time of our IPO," said Chief Executive Officer Andre Liebenberg.

The uranium spot market has seen a "notable price strengthening" during the period, said Yellow Cake.

After hitting a yearly low point of USD20.50 a pound in April, the spot price has risen 33% to USD27.35 a pound at September 30 and has increased, again, to USD29.15 since then.

Yellow Cake's total holding of uranium at September 30 was 8.4 million pounds, acquired at an average cost of USD21.10 per pounds.

The value of the company's underlying uranium has increased to USD230.9 million from an acquisition cost of USD178.2 million.

Liebenberg added: "We continue to believe the market for physical uranium holds potential for further growth, driven by both reduced global output from uranium mines and increasing uranium demand from markets such as China and Japan."

Yellow Cake said its strategy remains long-term buy and hold, with no hedging or leverage.

At September 30, Yellow Cake had USD9.8 million in cash.

The company did not propose an interim dividend.

Shares in Yellow Cake were up 1.8% on Monday at 246.40 pence each.

By Paul McGowan;

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