Release of Interim Report and Financial Statements
30 JUNE 2025
GEIGER COUNTER LIMITED
(THE "COMPANY")
RELEASE OF INTERIM REPORT AND FINANCIAL STATEMENTS
The Directors announce the release of the lnterim Report and Financial Statements for the period ended 31 March 2025, which are included as an attachment to this announcement.
http://www.rns-pdf.londonstockexchange.com/rns/0636P_1-2025-6-30.pdf
CHAIRMAN'S STATEMENT - FOR THE PERIOD ENDED 31 MARCH 2025
Introduction
Uranium markets experienced a volatile period despite continuous positive news flow surrounding the wider nuclear energy industry and improved fundamentals for uranium. While spot prices fell from $81.75/lb at the start of the reporting period to $64.45/lb at the end, reflecting a 21% decline, term contract prices remained stable and month end term prices have fallen just once in the last 33 months indicating utility uncertainty around future supply. Market conditions have continued to ease since I wrote to Shareholders last Autumn and the net asset value of the fund as at 31 March 2025 was 33.71p which represents a fall of 37.5% over the six months since 30 September 2024. The Company's share price return was also negative and fell by 24.52% over the six months as the discount to net asset value closed to 1%. The investment advisor's report on pages 8 to 12 sets out the investment position in more detail.
Share Buybacks and Corporate Activity
I noted in the Annual Report that the Directors and Manager were concerned about the wide discount to NAV which prevailed during 2024. The Company has engaged in a program of buy backs to provide liquidity, increase the NAV per share and ideally narrow the discount. During the period under review the Board has utilised its share buyback powers to repurchase 7,989,430 ordinary shares at a cost of £3.9m. Since the end of March, the Company has continued to utilise the share buyback authority and has repurchased a further 14,842,766 shares at a cost of £5.7m.
On 11 December 2024, the Company's ordinary shares were admitted to listing in the closed-ended investment funds category of the Official List of the FCA and to trading on the Main Market of the London Stock Exchange. The previous listing on The International Stock Exchange was subsequently cancelled. The Board anticipates that the Main Market listing will bring the Company to the attention of a wider group of potential shareholders and improve liquidity in the underlying shares.
Outlook
On 24 May 2025, US President Donald Trump signed a series of executive orders with the goal of "re-establishing the United States as the global leader in nuclear energy". This along with the disconnect between spot and long-term pricing proved to be a catalyst for the uranium equity market recovering. Since 31 March 2025, the net asset value of your Company has increased by 45% from 33.71p to 48.89p at the time of writing.
Your investment managers and Board of Directors believe that the fundamental structural support for uranium equities remains as strong as ever, and that with growing global nuclear power demand coupled with a highly constrained and fragile supply landscape, our portfolio is well-positioned to benefit.
Ian Reeves CBE
Chairman
June 2025
Sector Performance
The nuclear market had a strong finish to the 2024 calendar year driven by pledges from the world's largest technology companies that nuclear would be a key strategic focus for them in their race to secure clean baseload power for their data centres. This momentum was muted somewhat by the new U.S. Administration's volatile stance on trade, tariffs, and geopolitics which saw both equity and commodity markets shaken in the first three months of the year.
For uranium and nuclear specifically, President Trump's apparent desire to reconcile relations with Russia (along with other energy rich nations such as Saudi Arabia/OPEC) raised a risk that the Russian fuel ban may be lifted. Secondly, Kazatomprom announced a slight increase in its near-term production guidance, after the restart of its Inkai JV project. Thirdly, as speculated in the press, deferred sales of residual material from the wind-up of Kazatomprom's physical fund, ANU, dampened the spot U3O8 price. With these factors already in play, the nuclear related sectors took fright following DeepSeek's announcement suggesting that less-energy intensive AI learning was gaining momentum.
The combined effect weighed significantly on the performance of uranium mining equities, and over the period the Company's NAV declined 37.5%. Nevertheless, the fundamental outlook continues to improve as many of the above concerns are not materialising and have been overblown.
Global Nuclear Energy Agenda
Most notably, governments around the world continue to extol the benefits of nuclear and its core role in the energy mix, as illustrated by the renewed promise to triple nuclear generating capacity at COP28 in November 2024. Since then, the Trump administration has announced a target to quadruple its domestic generating capacity to 400GW by 2050. Recent deregulation proposals including a deregulated and streamlined regulatory approval process aims to facilitate this.
China continues its aggressive reactor build out, with the recent announcement of another 10 large scale reactor construction approvals. The estimated total cost of building these latest 10 reactors was roughly 1/6th the cost of those in the developed markets, such as Hinkley Point C.
Utility inventories approaching limits
Utility inventories are approaching very low levels, highlighting the need for re-engagement in purchasing which has been absent over the past year. Western market utility inventories are at or approaching limits equivalent to a fuel cycle of 18-24 months (the time it takes to mine, process enrich and manufacture enriched fuel bundles) as illustrated below.
At the margin, Japan is slowly pushing on with its restart plans as it attempts to increase nuclear's share of its energy mix to 20-22%+ by 2030, up from ~8.5% in 2024. Including the two Boiling Water reactors restarted in December, a total of 14 reactors were in operation during the fiscal year.
Source: The World Nuclear Agency
Notwithstanding the Q1 scramble for material, which pushed U3O8 spot prices above $100/lb in Q1 2024 when Russia reciprocal ban was first mooted, the low level of western utility fuel stocks suggests they will soon need to acquire material.
Recent fears not panning out
In the meantime, factors which severely dented sentiment have failed to materialise.
Russia's embargo on supplying fuel to the US remains in place. Kazatomprom has, since end-March indicated that its acid plant, an important input to its ability to scale-up production, has been delayed until Q1 2027. The question of reduced power demands from data centres brought about by more efficient Chinese technologies have also abated.
However, whilst the tech sector and broader markets have largely recovered from this jolt, uranium mining equities continue to lag.
Supply-demand imbalance remains supportive
The market now finds itself in a position where there remains significant international drive to expand nuclear power generation but without the price to incentivise necessary supply growth into the expected market deficit.
Source:: BMO Capital Markets
In addition to utility purchases, there is also incremental support from current fuel cycle costs. With conversion and enrichment costs near all-time-highs, it is increasingly cost effective to use more uranium, and less conversion and processing service to produce fuel.
With all this in mind we also note the need for Orano to find new sources of uranium to replace its expropriated Niger output. This may prompt some M&A activity at an opportune time.
Sector outlook remains bright
With Cameco production still sold forward for a significant period of time, alternative new brownfield and greenfield projects remain preferred investments for the Trust.
Within this, there is no change to the view on NexGen which remains a core investment, despite the decline in share price after the final court hearing date on the Rook I development was delayed until 2026. The project remains a globally strategic asset and the shares have now recovered somewhat, realigning with the broader uranium mining sector. It is also noteworthy that Canada's new pro-nuclear PM is cognisant of the strategic importance of Canada's uranium assets.
Activity and stocks
Late in 2024, the Company halved its positions in Uranium Energy Corp as it was believed at that time it was fully valued.
The Company participated in placings by explorer Canalaska and Cosa Resources, which currently continue to trade at their respective placing prices. The Company also reduced its holding in Kazatomprom in February after the share price bounced following the Q4 results.
Outlook
Underpinned by a structural supply shortage and combined with favourable government policies aimed at increasing nuclear's share of the global energy mix the outlook for the sector remains extremely positive. Furthermore, after a period of absence from the market since the panic buying of early 2024, western utility inventories appear to be once again approaching minimal levels.
Together with improved clarity on energy policies, notably in the US, currently the largest nuclear power market globally, nearer-term prospects for a pick-up in buying activity by utilities is also extremely positive and should drive a recovery in commodity prices following a period of consolidation from early 2024 highs and with it a recovery in sentiment towards related mining equities which have followed a similar trajectory. With its own unique investment cycle and given the price inelasticity of demand, the uranium market outlook remains extremely bright.
The Company remains focussed on those assets that are best positioned to deliver strong returns in such a market with a focus on Nexgen that owns the world class Rook I project along with controlling interests in other strategic assets. We remain structurally overweight North American provenance uranium which we believe should benefit as the region seeks to reduce its reliance on overseas supply.
Keith Watson and Robert Crayfourd
New City Investment Managers
June 2025
Enquiries
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Manulife CQS Investment Management |
Craig Cleland |
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