TIDMYCA
RNS Number : 4369G
Yellow Cake PLC
19 July 2023
19 July 2023
Yellow Cake plc ("Yellow Cake" or the "Company")
Annual Results for the year ended 31 March 2023
Highlights
- Continued improvement in the outlook for U(3) O(8) despite a decrease in the spot price of
12.5% from USD57.90/lb as at 31 March 2022 to USD50.65/lb as at 31 March 2023. [1]
- Increase of 4% in the value of the Company's holding of U(3) O(8) during the financial year
to USD952.5 million as at 31 March 2023, as a result of a net increase in the volume of uranium
held from 15.83 million lb of U(3) O(8) to 18.81 million lb of U(3) O(8) , offset by the depreciation
in the uranium price.
- Loss after tax of USD102.9 million for the year ended 31 March 2023 (2022: profit after tax
of USD417.3 million) primarily due to a 12.5% reduction in the spot price and leading to a
USD96.9 million decrease in the fair value of the Company's uranium holdings (2022: USD433.3
million gain).
- Net asset value of USD1,035.3 million (GBP4.23 per share) [2] as at 31 March 2023 (2022: USD1,069.0
million (GBP4.42 per share)).
- Raised gross proceeds of USD74.3million (GBP61.8 million) during the financial year through
a share placing in February 2023.
- Applied the raise proceeds to exercise the 2022 Kazatomprom option to acquire a further 1.35
million lbs of U(3) O(8) . This additional uranium is expected to be received by 30 September
2023. On receipt, Yellow Cake's total holding of 20.16 million lbs will represent approximately
15% of 2022 global uranium production. ([3])
- Estimated proforma net asset value on 12 July 2023 was USD1,133.4 million or GBP4.40 per share
[4] , assuming 20.16 million lb of U(3) O(8) valued at the daily price of USD55.40/lb published
by UxC LLC on 12 July 2023, cash and cash equivalents of USD84.4 million and net current liabilities
of USD1.6 million as at 31 March 2023, less cash consideration of USD66.0 million to be paid
to Kazatomprom following the expected delivery of 1.35 million lb of U(3) O(8) by 30 September
2023.
- Concluded a USD3 million share buyback programme, repurchasing 566,833 shares between 4 April
and 6 May 2022 (now held in treasury) at a volume weighted average price of GBP4.15 per share
(USD5.27 per share) and a volume weighted average discount to net asset value of 10.4%, effectively
acquiring exposure to uranium at a discount to the commodity spot price.
- Holding of 18.81 million lb of U(3) O(8) as at 18 July 2023 (not including 1.35 million lb
of U(3) O(8) to be received post year-end) acquired at an average cost of USD31.11/lb [5]
.
Andre Liebenberg, CEO of Yellow Cake, said ;
"We continue to deliver on our strategy to buy and hold physical
uranium. In February we completed an oversubscribed placing to
raise GBP62 million which we immediately used to partially exercise
our 2022 purchase option with Kazatomprom, buying an additional
1.35 million pounds of uranium, which upon delivery later this year
will take our total holding to over 20 million pounds for the first
time.
"As global nuclear power accelerates and resultant uranium
market fundamentals continue to strengthen, the outlook for the
uranium price becomes increasingly compelling, and this in turn
provides considerable opportunity for value creation for our
shareholders. Our confidence in the outlook for the uranium price
is based on the consistent theme of constrained supply and steadily
growing demand. On the supply side, although the price of uranium
has risen, it is still below the levels at which it is economically
viable for new projects to be developed. We are also seeing
challenged supply chains impacting existing producers, with some
buying in the spot market to fulfil commitments instead of meeting
those obligations through production. Meanwhile the sentiment
around nuclear energy continues to improve as it becomes widely
accepted as the key to achieve our net zero targets. China's new
five-year plan means there will be a 40 per cent increase in their
nuclear capacity by 2025, while grid problems across the world
highlight the need for a reliable and low-carbon source of baseload
power."
ENQUIRIES:
Yellow Cake plc
Andre Liebenberg, CEO Carole Whittall, CFO
Tel: +44 (0) 153 488 5200
Nominated Adviser and Joint Broker: Canaccord Genuity Limited
Henry Fitzgerald-O'Connor James Asensio
Gordon Hamilton
Tel: +44 (0) 207 523 8000
Joint Broker: Berenberg
Matthew Armitt Jennifer Lee
Detlir Elezi
Tel: +44 (0) 203 207 7800
Financial Adviser: Bacchus Capital Advisers
Peter Bacchus Richard Allan
Tel: +44 (0) 203 848 1640
Communications Adviser: Powerscourt
Peter Ogden Molly Melville
Tel: +44 (0) 7793 858 211
ABOUT YELLOW CAKE
Yellow Cake is a London-quoted company, headquartered in Jersey,
which offers exposure to the uranium spot price. This is achieved
through its strategy of buying and holding physical triuranium
octoxide ("U(3) O(8) "). It may also seek to add value through
other uranium related activities. Yellow Cake seeks to generate
returns for shareholders through the appreciation of the value of
its holding of U(3) O(8) and its other uranium related activities
in a rising uranium price environment. The business is
differentiated from its peers by its ten-year Framework Agreement
for the supply of U(3) O(8) with Kazatomprom, the world's largest
uranium producer. Yellow Cake currently holds 18.81 million pounds
of U(3) O(8) , all of which is held in storage in Canada and
France.
FORWARD LOOKING STATEMENTS
Certain statements contained herein are forward looking
statements and are based on current expectations, estimates and
projections about the potential returns of the Company and the
industry and markets in which the Company will operate, the
Directors' beliefs and assumptions made by the Directors. Words
such as "expects", "anticipates", "should", "intends", "plans",
"believes", "seeks", "estimates", "projects", "pipeline", "aims",
"may", "targets", "would", "could" and variations of such words and
similar expressions are intended to identify such forward looking
statements and expectations. These statements are not guarantees of
future performance or the ability to identify and consummate
investments and involve certain risks, uncertainties and
assumptions that are difficult to predict, qualify or quantify.
Therefore, actual outcomes and results may differ materially from
what is expressed in such forward looking statements or
expectations. Among the factors that could cause actual results to
differ materially are: uranium price volatility, difficulty in
sourcing opportunities to buy or sell U(3) O(8) , foreign exchange
rates, changes in political and economic conditions, competition
from other energy sources, nuclear accidents, loss of key personnel
or termination of the services agreement with 308 Services Limited,
changes in the legal or regulatory environment, insolvency of
counterparties to the Company's material contracts or breach of
such material contracts by such counterparties. These
forward-looking statements speak only as at the date of this
announcement. The Company expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any forward
looking statements contained herein to reflect any change in the
Company's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based
unless required to do so by applicable law or the AIM Rules.
Chairman's statement
Yellow Cake was established in 2018 to provide investors with an
opportunity to realise value from long-term exposure to the uranium
spot price in a low-risk, low-cost, liquid and publicly-quoted
vehicle. The supply demand characteristics that drove the steady
rise in the uranium price since then remain as relevant today and
continue to make for a compelling investment case.
Nuclear power is now widely accepted as having a key role in the
path to global decarbonisation due to its low carbon lifecycle
emissions, reliable baseload profile and good fit with renewable
energy sources. In the past year, Russia's invasion of Ukraine not
only highlighted the need for greater energy security, but also
accelerated the shift away from fossil fuels, further strengthening
the underlying fundamentals for nuclear energy.
As a result, the past year saw an acceleration of new build
intentions, particularly from China, and a broader appreciation of
the value of existing nuclear fleet infrastructure, with life
extensions in the US and Europe, as well as further restarts in
Japan.
At the same time as future demand continues to increase, supply
remains heavily constrained due to years of underinvestment, supply
chain challenges and cost inflation. The world is already consuming
more uranium than it produces and the previous overhang from global
stockpiles has significantly eroded.
A more recent emerging theme is the shift by Western utilities
to diversify nuclear fuel sources to reduce dependence on Russia
and support non-Russian capacity. These new long -- term contracts
at higher price levels are necessary to support increased
production and project expansions throughout the nuclear fuel
cycle, presenting another strong rationale for the long-term
holding of uranium.
Realising value for investors
Yellow Cake actively pursues strategies to support positive
returns for investors. The Company's long-term partnership with
Kazatomprom is a key strategic advantage that provides access to
material volumes of uranium at the prevailing market price and is
particularly important as we transition to an undersupplied
market.
When the shares trade above net asset value, we have an
opportunity to raise capital to invest in additional uranium. In
February 2023, Yellow Cake took advantage of a market opportunity,
placing 15 million new ordinary shares in an upsized placing with
existing and new institutional investors. We were delighted with
the strong response to our placing, which supports our view that
this remains a compelling time to invest in uranium.
The proceeds were used to acquire a further 1.35 million lbs of
U(3) O(8) , which is expected to be received in September 2023. On
receipt, our total holding of 20.2 million lbs will represent
approximately 15% of 2022 global production.
Yellow Cake continues to explore opportunities to increase
accessibility of shares to global investors. During the year, the
shares commenced trading on the OTCQX Best Market, the highest tier
of the US over-the-counter market.
Yellow Cake's Board of Directors ("the Board") reserves the
right to declare a dividend, as and when deemed appropriate,
however, the Company does not currently expect to declare dividends
on a regular or fixed basis. The Board is not declaring a dividend
for this financial year.
Yellow Cake is committed to good governance, high ethical
standards and responsible ESG practices
The Board of Directors acknowledges that Yellow Cake's ability
to create long-term value depends on the Company's ability to
responsibly manage its environmental, social and governance impacts
and performance. We welcome the increased global attention on
climate change and mitigating the effects of global warming.
To the degree appropriate to the size and nature of Yellow
Cake's business, the Company applies the principles and provisions
of the UK Corporate Governance Code 2018 (the "Code").
We are committed to good governance and high ethical standards,
and have zero-tolerance for bribery, corruption and unethical
practices. Policies and measures are in place to prevent bribery,
modern slavery, inducements and money laundering, and to ensure
compliance with economic sanctions. These include a whistleblowing
policy. The operational and performance requirements for employees,
directors, business partners, contractors and advisers are
established in the Code of Conduct, which also promotes the
Company's key values of dignity, diversity, business integrity,
compliance and accountability.
Ensuring effective oversight
Effective governance and oversight are supported by the small
scale and simplicity of the organisation, which also facilitate
good communication. Regular review and update of compliance
policies ensure continued alignment with the latest developments in
corporate governance requirements and guidelines.
The Board plays an active role in overseeing the Company's
activities and met eight times during the year to 31 March 2023.
Meetings were also held by the Audit, Remuneration and Nomination
Committees during the period to discharge their duties as set out
in their terms of reference.
Emily Manning resigned as a Non-Executive Director in November
2022 and was replaced on the Board by Claire Brazenall. We thank Ms
Manning for her contribution to the Company during her time on the
Board.
While the Company's direct social and environmental impacts are
minimal, we conduct appropriate due diligence on suppliers and
business partners to ensure that they share our commitment to
responsible business practices. We commission an annual external
and independent assessment of our ESG practices and those of our
primary suppliers.
Stakeholder engagement
The Company proactively facilitates opportunities for dialogue
with stakeholders in recognition of the importance of regular
engagement. Feedback from these engagements is regularly
communicated to the Board and informs its deliberations.
Day-to-day queries raised by stakeholders are addressed by the
Executive Directors and the chairs of the Board Committees seek
engagement with shareholders on significant matters related to
their areas of responsibility when required. The Chairman is
available to the Company's major shareholders to discuss
governance, strategy and performance.
Appreciation
I would like to express my gratitude to my fellow Directors for
their unwavering support and invaluable contributions throughout
the year. On behalf of the Board, I thank our shareholders and
investors for their significant interest in the Company.
Yellow Cake is well positioned to continue to drive shareholder
value for the long term. We remain very excited about the outlook
for uranium and confident in our strategy and investment case.
The Lord St John of Bletso
Chairman
CEO statement
The fundamental uranium supply and demand trends of the last few
years continued to strengthen in 2022. We have seen demand driven
by de-carbonisation and energy transition goals; accelerated
reactor build programmes, reactor life extensions and small modular
reactor developments; a significant jump in long-term contracting;
and a focus on energy security and energy independence post
Russia's invasion of Ukraine. Although the direct impact on uranium
markets of Russia's invasion of Ukraine has been milder than its
effects on fossil fuel prices and supplies, it has added risk to
the global uranium fuel cycle and driven a de-globalisation of
demand between Russian and non-Russian sources. Against this
backdrop of improving demand fundamentals, we have yet to see any
meaningful supply response.
Forecast demand continues to outstrip supply
Nuclear power is now widely recognised as a key part of efforts
to achieve future carbon commitments while meeting the forecast
growth in energy demand. This has rehabilitated perceptions of
nuclear power and many countries have demonstrated the positive
shift towards nuclear in restarts and lifetime extensions of
existing facilities, as well as plans for new builds.
Advanced reactors and SMRs are making encouraging progress
towards commercialisation with increased support from investors,
unlocking new opportunities for nuclear by reducing upfront costs
and construction times. Although these facilities are smaller than
existing reactors, upfront fuel requirements to support SMRs'
longer refuelling cycles suggest increased uranium demand in the
medium term.
As the outlook for future uranium demand has strengthened,
uranium supply has lagged for many years with low uranium prices
leading to major producers idling uneconomic operations or
curtailing production. Low prices also disincentivised investment
in new resources at the same time as several significant operations
closed permanently.
More recently, COVID-19 affected production, with delays to
wellfield developments in 2021 evident in lower production in 2022.
Ongoing supply chain challenges have exacerbated delays and limited
access to key equipment and materials, including sulfuric acid.
The overhang in global uranium inventories has eroded in the
last few years, removing the buffer between demand and the spot and
term markets.
Several producers have announced restarts of idled production,
but these will take time to reach full capacity and are
insufficient to meet the shortfall. More capital-intensive
greenfields developments will be required. However, the challenges
these new projects face, which include lack of funding, delays due
to obtaining permits, unavailability of skills, material and
equipment, as well as inflationary increases across the project
supply chain, suggest that further price increases will be
necessary to incentivise investment in new projects.
War in Ukraine affects the entire front end of the uranium fuel
cycle
Yellow Cake's operations, financial condition and ability to
purchase and take delivery of U(3) O(8) from any party remain
unaffected by Russia's invasion. All U(3) O(8) to which the Company
has title and has paid for, is held at the Cameco storage facility
in Canada and the Orano storage facility in France. We do not
anticipate any restrictions on being able to make further purchases
under the option agreement with Kazatomprom. Payment either follows
delivery or is managed via escrow, so there is no credit risk for
Yellow Cake attached to these deliveries.
However, the war set in motion a geopolitical realignment in
energy markets that emphasises the increasingly important role for
nuclear power as a source of secure and affordable energy.
Russia supplies approximately 14% of global uranium
concentrates, 27% of conversion and 46% of enrichment, highlighting
the security of supply risk in the context of the growing primary
supply gap and shrinking secondary supplies.
Uranium from Kazakhstan and Uzbekistan (together comprising more
than 50% of annual production) has historically been shipped to
Western markets through the Russian port of St Petersburg. These
shipments could be affected by disruptions along the route similar
to those that affected oil exports from Kazakhstan during the year,
or by future sanctions against Russian companies, facilities,
shippers and sea vessels. Ahead of official sanctions, many
utilities in the US, Europe and elsewhere are increasingly looking
to source from non-Russian suppliers.
While Kazatomprom has successfully made shipments using the
alternative Trans-Caspian International Transport Route during the
year, concerns remain about the cost and time it would take to ship
significant volumes through this channel.
Spot market volumes decrease while term contracting rises
significantly
After record spot market volumes in the 2021 calendar year
(102.4 million lb), volumes decreased by 40% to 60.8 million lb in
CY2022. The decrease was mainly due to reduced buying by financial
funds (including Yellow Cake) and limited demand from primary
producers and junior uranium companies as production started to
resume. Volumes decreased slightly in the first quarter of calendar
2023.
The uranium spot market price started 2022 at USD42.05/lb and
ended the year 14% up at USD48.00/lb, after hitting a high in April
2022 of USD63.75/lb, the highest level since 2011.
The spot price closed at USD 50.65/lb on 31 March 2023, 12.5%
down on 31 March 2022.
Contracting activity in the long-term market increased 58% in
2022, reaching 114 million lb (2021: 72 million lb), a significant
increase on the annual average of 72.6 million lb of the previous
nine years. Indicated term prices increased 32% to USD51.00/lb.
This increase in activity was primarily driven by utilities seeking
to meet short-term needs following many years of limited long-term
contracting and by the need to address longer-term concerns over
future uranium supply and increased geopolitical risk. Identified
potential 2023 term contracting already exceeds 2021 volumes and
could even exceed 2022 volumes as utilities respond to increasing
risks in the market. These include the impact of potential
sanctions on Russian supplies, uncertainty about the long-term
outlook for uranium supply and spot market volatility.
The spikes in conversion and enrichment prices reflect the
constraints for utilities that want to move away from Russian
sources. While additional non-Russian conversion and enrichment
capacity will take several years to come to market if higher prices
are sustained, a short-term switch from underfeeding to overfeeding
could help to meet demand, but will require additional UF6 and U(3)
O(8) .
Increased holdings of U(3) O(8)
During the year, we took delivery of a further 3 million lb of
uranium contracted in the 2022 financial year. The decline in
global stock market indices resulted in Yellow Cake's shares
trading at a discount to net asset value for most of the year,
constraining our ability to raise equity to acquire more U(3) O(8)
without diluting existing shareholders.
When markets turned in January 2023, we took the opportunity to
raise USD75 million (before costs). This was applied to partially
utilise the 2022 Kazatomprom option and contract for a further 1.35
million lb, to be delivered in September 2023, bringing our total
holding after receipt to 20.2 million lb. The full 2023 Kazatomprom
option to acquire a further USD100 million remains in place.
Outlook
Global financial market conditions may well result in short-
term spot price volatility, but the longer term fundamentals of the
uranium market continue to strengthen. These include the reduction
in "mobile" near-term uranium inventories, the significant increase
in contracting activity in the uranium term market and the
heightened focus on energy security. Low prices have led to supply
concentration by origin and a growing primary supply gap.
Yellow Cake is well positioned to deliver on our stated strategy
of realising opportunities to create value for investors by
increasing our U(3) O(8) holdings when the share price is trading
above net asset value.
Andre Liebenberg
Chief Executive Officer
CFO's review
"During the financial year, the value of Yellow Cake's uranium
holding increased 4% as a result of a 3.0 million lb increase in
its holdings, partially offset by a decrease in the uranium price.
At the beginning of the financial year, the Company's shares traded
at a significant discount to net asset value. Yellow Cake completed
a share buyback programme in the first quarter of the financial
year as a means of effectively acquiring exposure to uranium at a
discount to the commodity spot price. By the last quarter of the
financial year, the discount had closed, putting the Company in a
position to successfully complete a USD74.3 million share placing
and apply the proceeds to the purchase of an additional 1.35
million lb of U(3) O(8) which is expected to be received in
September 2023."
I am pleased to present the following audited financial
statements for the year to 31 March 2023 and report a number of
salient features:
- Uranium holding of 18.81 million lb of U(3) O(8) valued
at USD952.5 million as at 31 March 2023 (15.83 million lb
of U(3) O(8) valued at USD916.7 million at 31 March 2022).
- Gross proceeds of USD74.3 million from a share placing in
February 2023, applied to the purchase 1.35 million lb of
U(3) O(8) at a price of USD48.90/lb and an aggregate consideration
of USD66.0 million. We expect to take delivery in September
2023.
- Completed two purchases totalling 2.97 million lb of U(3)
O(8) during the financial year, increasing the Company's
holdings to 18.8 million lb of U(3) O(8) .
- Loss after tax of USD102.9 million (2022: Profit of USD417.3
million), driven by a fair value loss of USD96.9 million
on the Company's investment in uranium.
Uranium transactions
Yellow Cake started the financial year with a holding of 15.83
million lb of U(3) O(8) . In the first half of the financial year,
the Company took delivery of 2.97 million lb of U(3) O(8) under two
uranium purchase agreements, which were funded with cash at
bank:
- The Company exercised its option with Kazatomprom to buy
back 2,022,846 lb of U(3) O(8) from Kazatomprom at a cost
of USD43.25/lb or USD87.5 million in aggregate consideration.
This was received by the Company at the Cameco storage facility
in Canada on 19 May 2022 in accordance with the agreed delivery
schedule.
- Pursuant to Kazatomprom's offer of 26 October 2021, the
Company entered into an agreement with Kazatomprom to purchase
950,000 lb of U(3) O(8) at a price of USD47.58/lb for a
total consideration of USD45.2 million. This was received
by the Company at the Cameco storage facility in Canada
on 30 June 2022 in accordance with the agreed delivery schedule.
The uranium price started to strengthen early in 2023 and in
February, Yellow Cake took the opportunity to raise USD74.3 million
through a share placement. The proceeds will be applied to
partially utilise the Company's 2022 Kazatomprom option by
purchasing 1.35 million lb of U(3) O(8) at an average price of
USD48.90/lb and an aggregate consideration of USD66.0 million. This
uranium purchase transaction is expected to complete in September
2023.
As at 31 March 2023, the Company's uranium investment comprised
18.81 million lb of U(3) O(8) , a net increase of 3.0 million lb of
U(3) O(8) during the financial year. Following completion of the
agreed purchase of 1.35 million lb of U(3) O(8) the Company's
uranium investment is expected to comprise 20.16 million lb of U(3)
O(8) .
Uranium-related gains and losses
Yellow Cake made a total uranium-related loss of USD96.9 million
in the year to 31 March 2023 as a result of a decrease in the fair
value of the Company's uranium investment. In 2022, the company
made a total uranium-related gain of USD433.4 million, comprising
an increase in fair value of USD433.3 million and USD0.1 million in
location swap fees.
The decrease in the fair value of the Company's uranium
investment was attributable to the decrease in the spot price from
USD57.90/lb to USD50.65/lb. This was partially offset by an
increase in the volume of uranium held.
Operating performance
Yellow Cake delivered a loss after tax for the year of USD102.9
million (2022: profit of USD417.3 million). Expenses for the year
were USD7.0 million (2022: USD6.9 million).
Yellow Cake's Management Expense Ratio for the year (total
operating expenses of a recurring nature, excluding commissions and
equity offering expenses, expressed as an annualised percentage of
average daily estimated net asset value during the period) was
0.68% (31 March 2022: 0.65%).
Share buyback programme
After a period in which the Company's shares traded at a
material discount to its underlying net asset value, Yellow Cake
implemented a share buyback programme as a means of effectively
acquiring exposure to uranium at a discount to the commodity spot
price. In total, the Company acquired 566,833 shares between 4
April and 6 May 2022, for a total consideration of USD3.0 million,
at a volume weighted average price of GBP4.15 pence per share and a
volume weighted average discount to net asset value of 10.4%. The
shares repurchased are held in treasury.
The Company does not propose to declare a dividend for the
year.
Share placing
On 2 February 2023, the Company issued 15 million new ordinary
shares to existing and new institutional investors at a price of
GBP4.12 per share. The Company raised net proceeds of GBP60.0
million (USD equivalent: USD72.1 million net of costs of USD2.2
million).
Balance sheet and cash flow
The value of Yellow Cake's uranium holding increased by 4% to
USD952.5 million at year-end compared to USD916.7 million at the
end of the 2022 financial year, as a result of a net increase in
the volume of uranium held, partially offset by the decrease in the
uranium price. As at 31 March 2023, Yellow Cake had cash of USD84.4
million (2022: USD153.1 million). The Company has allocated USD66.0
million to purchase 1.35 million lb of U(3) O(8) after the
year-end, to be paid on delivery.
Yellow Cake's net asset value at 31 March 2023 was GBP4.23 [6]
per share or USD1 035.3 million, consisting of 18.8 million lb of
U(3) O(8) valued at a spot price of USD50.65/lb, cash and cash
equivalents of USD84.4 million and other net current liabilities of
USD1.6 million.
Yellow Cake's estimated proformanet asset value on 12 July 2023
was USD1,133.4 million or GBP4.40 per share [7] , assuming 20.16
million lb of U(3) O(8) valued at the daily price of USD55.40/lb
published by UxC LLC on 12 July 2023, cash and cash equivalents of
USD84.4 million and net current liabilities of USD1.6 million as at
31 March 2023, less cash consideration of USD66.0 million to be
paid to Kazatomprom following the expected delivery of 1.35 million
lb of U(3) O(8) by 30 September 2023.
Carole Whittall
Chief Financial Officer
Financial statements
Statement of Financial Position
As at As at
31 March 2023 31 March 2022
Notes USD '000 USD '000
================================================= ===== ============= =============
ASSETS:
Non-current assets
Investment in uranium 4 952,504 916,717
------------------------------------------------- ----- ------------- -------------
Total non-current assets 952,504 916,717
------------------------------------------------- ----- ------------- -------------
Current assets
Trade and other receivables 5 324 130
Cash and cash equivalents 6 84,428 153,136
------------------------------------------------- ----- ------------- -------------
Total current assets 84,752 153,266
------------------------------------------------- ----- ------------- -------------
Total assets 1,037,256 1,069,983
------------------------------------------------- ----- ------------- -------------
LIABILITIES:
Current liabilities
Trade and other payables 7 (1,930) (970)
------------------------------------------------- ----- ------------- -------------
Total current liabilities (1,930) (970)
------------------------------------------------- ----- ------------- -------------
Total liabilities (1,930) (970)
------------------------------------------------- ----- ------------- -------------
NET ASSETS 1,035,326 1,069,013
------------------------------------------------- ----- ------------- -------------
EQUITY
Attributable to the equity owners of the Company
Share capital 8 2,724 2,544
Share premium 8 660,203 588,181
Share-based payment reserve 9 166 122
Treasury shares 10 (14,216) (11,219)
Retained earnings 386,449 489,385
------------------------------------------------- ----- ------------- -------------
Total equity 1,035,326 1,069,013
======================================================== ============= =============
The financial statements of Yellow Cake plc and the related
notes were approved by Directors on 18 July 2023 and were signed on
its behalf by:
Andre Liebenberg
Chief Executive Officer
Statement of Comprehensive Income
1 April 2022 1 April 2021
to 31 March 2023 to 31 March 2022
Notes USD '000 USD '000
========================================================================= ======= ================ ================
Uranium investment (losses)/gains
Fair value movement of investment in uranium 4 (96,902) 433,274
Uranium swap income 4 - 100
Fair value movement of uranium derivative liability - (3,193)
Discount to spot price on disposal 4 - (6,058)
------------------------------------------------------------------------- ------- ---------------- ----------------
Uranium investment (losses)/gains (96,902) 424,123
---------------------------------------------------------------------------------- ---------------- ----------------
Expenses
Share-based payments 9 (44) (220)
Equity offering expenses 8 (144) (534)
Commission on uranium transactions 11 (226) (1,884)
Procurement and market consultancy fees 11 (3,092) (2,130)
Other operating expenses 12 (3,466) (2,180)
------------------------------------------------------------------------- ------- ---------------- ----------------
Total expenses (6,972) (6,948)
---------------------------------------------------------------------------------- ---------------- ----------------
Bank interest income 576 11
Gain on foreign exchange 362 85
---------------------------------------------------------------------------------- ---------------- ----------------
(Loss)/profit before tax attributable to the equity owners of the Company (102,936) 417,271
---------------------------------------------------------------------------------- ---------------- ----------------
Tax expense 13 - -
------------------------------------------------------------------------- ------- ---------------- ----------------
(Loss)/profit and total comprehensive income for the year after tax
attributable to the equity
owners of the Company (102,936) 417,271
------------------------------------------------------------------------- ------- ---------------- ----------------
Basic (loss)/earnings per share attributable to the equity owners of the
Company (USD) 15 (0.56) 2.60
Diluted (loss)/earnings per share attributable to the equity owners of
the Company (USD) 15 (0.56) 2.59
========================================================================= ======= ================ ================
Statement of Changes in Equity
Attributable to the equity owners of the Company
Share-based
Share payment Treasury Retained Total
Share capital premium reserve shares earnings equity
===============
Notes USD '000 USD '000 USD '000 USD '000 USD '000 USD '000
=============== ===== ============= =============== ============== ============== ============== ==============
As at 31 March
2021 1,785 358,812 141 (11,458) 72,114 421,394
--------------- ----- ------------- --------------- -------------- -------------- -------------- --------------
Total
comprehensive
income after
tax for the
year - - - - 417,271 417,271
Transactions
with owners:
Shares issued 8 759 235,818 - - - 236,577
Share issue
costs 8 - (6,449) - - - (6,449)
Share-based
payments 9 - - 220 - - 220
Exercise of
bonus option 10 - - (239) 239 - -
--------------- ----- ------------- --------------- -------------- -------------- -------------- --------------
As at 31 March
2022 2,544 588,181 122 (11,219) 489,385 1,069,013
--------------- ----- ------------- --------------- -------------- -------------- -------------- --------------
Total
comprehensive
income after
tax for the
year - - - - (102,936) (102,936)
Transactions
with owners:
Shares issued 8 180 74,072 - - - 74,252
Share issue
costs 8 - (2,050) - - - (2,050)
Share-based
payments 9 - - 44 - - 44
Purchase of own
shares 10 - - - (2,997) - (2,997)
--------------- ----- ------------- --------------- -------------- -------------- -------------- --------------
As at 31 March
2023 2,724 660,203 166 (14,216) 386,449 1,035,326
=============== ===== ============= =============== ============== ============== ============== ==============
Statement of Cash Flows
1 April 2022 1 April 2021
to 31 March 2023 to 31 March 2022
Notes USD '000 USD '000
================================================================ ===== ================ ================
Cash flows from operating activities
(Loss)/profit before tax (102,936) 417,271
Adjustments for:
Discount to spot price on disposal 4 - 6,058
Change in fair value of investment in uranium 4 96,902 (433,274)
Change in fair value of uranium derivative liability - 3,193
Share-based payments 9 44 220
Gain on foreign exchange (362) (85)
Interest income (576) (11)
----------------------------------------------------------------------- ---------------- ----------------
Operating cash out flows before changes in working capital (6,928) (6,628)
----------------------------------------------------------------------- ---------------- ----------------
Changes in working capital:
Increase in trade and other receivables (190) (11)
Increase/(decrease) in trade and other payables 1,369 (2,607)
----------------------------------------------------------------------- ---------------- ----------------
Cash used in operating activities (5,749) (9,246)
----------------------------------------------------------------------- ---------------- ----------------
Interest received 576 11
----------------------------------------------------------------------- ---------------- ----------------
Cash used in operating activities (5,173) (9,235)
----------------------------------------------------------------------- ---------------- ----------------
Cash flows from investing activities:
Purchase of uranium 4 (132,689) (284,890)
Proceeds of sale of uranium 4 - 90,934
---------------------------------------------------------------- ----- ---------------- ----------------
Net cash used in investing activities (132,689) (193,956)
----------------------------------------------------------------------- ---------------- ----------------
Cash flows from financing activities:
Proceeds from issue of shares 8 74,252 236,577
Issue costs paid 8 (2,050) (6,449)
Share buyback programme (2,997) -
---------------------------------------------------------------- ----- ---------------- ----------------
Net cash generated from financing activities 69,205 230,128
----------------------------------------------------------------------- ---------------- ----------------
Net (decrease)/increase in cash and cash equivalents during the year (68,657) 26,937
Cash and cash equivalents at the beginning of the year 153,136 126,159
Effect of exchange rate changes (51) 40
----------------------------------------------------------------------- ---------------- ----------------
Cash and cash equivalents at the end of the year 84,428 153,136
======================================================================= ================ ================
Notes to the Financial Statements
For the year ended 31 March 2023
General information
1.
Yellow Cake plc (the "Company") was incorporated in Jersey,
Channel Islands on 18 January 2018. The address of the registered
office is Gaspé House, 66-72 The Esplanade , St Helier, Jersey, JE1
2LH.
The Company operates in the uranium sector and was established
to purchase and hold U(3) O(8) . The strategy of the Company is to
invest in long-term holdings of U(3) O(8) and not to actively
speculate with regards to short-term changes in the price of U(3)
O(8) .
The Company was admitted to list on the London Stock Exchange
AIM market ("AIM") on 5 July 2018.
On 22 June 2022, the Company's shares were admitted to trading
on the OTCQX, the highest tier of the US over-the-counter
market.
Summary of significant accounting policies
2.
Basis of preparation
The financial information has been prepared in accordance with
UK-adopted international accounting standards ("IFRS") as issued by
the International Accounting Standards Board ("IASB").
In accordance with Section 105 of The Companies (Jersey) Law
1991, the Company confirms that the financial information for the
period ended 31 March 2023 is derived from the Company's audited
financial statements and that these are not statutory accounts and,
as such, do not contain all information required to be disclosed in
the financial statements prepared in accordance with IFRS.
The statutory accounts for the period ended 31 March 2023 have
been audited and approved, but have not yet been filed.
The Company's audited financial statements for the period ended
31 March 2023 received an unqualified audit opinion and the
auditor's report contained no statement under section 113B (3) and
(6) of The Companies (Jersey) Law 1991.
The financial information contained within this preliminary
statement was approved and authorised for issue by the Board on 18
July 2023.
The principal accounting policies adopted are set out below:
New and revised standards
At the date of approval of these financial statements there are
no new or revised standards that are in issue but not yet effective
that are relevant to the financial statements of the Company.
Going concern
The Directors, having considered the Company's objectives and
available resources along with its projected income and expenditure
for at least 12 months from the date of approval of the audited
financial statements, are satisfied that the Company has adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, the Directors have adopted the going concern
basis in preparing these audited financial statements.
The Board continues to monitor the ongoing impact of the
conflict in Ukraine and sanctions imposed against Russia and
Belarus on the Company's activities, the uranium industry, and the
world economy.
After taking into account of the Company's cash balance of
USD84.4 million at year-end and of its post year-end commitments to
purchase USD66.0 million of U(3) O(8) , the Company considered
that, as at 31 March 2023, it had sufficient working capital to
meet approximately 18 months of operating expenses before it would
need to raise additional funds. Further details can be found in
note 4 of these financial statements. The Company has no debt or
hedge liabilities on its balance sheet.
Sale of uranium and uranium swaps
The income in respect of disposals of uranium is recognised at
the point when the significant risks and rewards of ownership and
legal title have been transferred to the buyer. At the point of
disposal the carrying value of the uranium, being the spot price,
is derecognised from the balance sheet.
The gain or loss on disposal of uranium is calculated as the
difference between the sales price and the carrying value, being
the spot price, at the point of sale. This gain or loss is
reflected as a premium or discount to the spot price on a separate
line in the statement of comprehensive income during the period in
which the disposal occurs.
The Company has entered into certain uranium location swap
agreements under which it has agreed to exchange, by way of book
transfer, an equal quantity of uranium between specified storage
facilities. In certain instances, the location swap is temporary
and the uranium will be swapped back to the original location at
the end of an agreed term. Where the swap is temporary and for a
fixed term, the income which the Company is entitled to receive in
consideration for the swap is recognised over the term of the swap,
in line with the substance of the transaction and delivery of the
related performance obligations.
Investments in uranium
Acquisitions of U(3) O(8) are initially recorded at cost net of
transaction costs incurred and are recognised in the Company's
statement of financial position on the date the risks and rewards
of ownership pass to the Company, which is the date that the legal
title to the uranium passes.
After initial recognition, investments in U(3) O(8) are measured
at fair value based on the daily spot price for U(3) O(8) published
by UxC LLC.
IFRS lacks specific guidance in respect of accounting for
investments in uranium. As such the Directors of the Company have
considered the requirements of International Accounting Standard 1
"Presentation of Financial Statements" and International Accounting
Standard 8 "Accounting Policies, Changes in Accounting Estimates
and Errors" to develop and apply an accounting policy. The
Directors of the Company consider that measuring the investment in
U(3) O(8) at fair value provides information that is most relevant
to the economic decision-making of users. This is consistent with
International Accounting Standard 40 Investment Property, which
allows for assets held for long-term capital appreciation to be
presented at fair value.
Foreign currency translation
Functional and presentation currency
The financial statements are presented in United States Dollars
("USD") which is also the functional currency of the Company.
These financial statements are presented to the nearest round
thousand, unless otherwise stated.
Foreign currency translation
Transactions denominated in foreign currencies are translated
into USD at the rate of exchange ruling at the date of the
transaction.
Monetary assets and liabilities denominated in foreign
currencies at the reporting date are translated into USD at the
rate of exchange ruling at the reporting date. Foreign exchange
gains or losses arising on translation are recognised through
profit or loss in the statement of comprehensive income.
Financial instruments
Financial assets and financial liabilities are recognised when
the Company becomes a party to the contractual provisions of the
instrument. The Company shall offset financial assets and financial
liabilities if the Company has a legally enforceable right to set
off the recognised amounts and intends to settle on a net
basis.
The carrying amount of the Company's financial assets and
financial liabilities are a reasonable approximation of their fair
values due to the short-term nature of these instruments.
Financial assets
The Company's financial assets comprise trade and other
receivables. These assets are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are initially recognised at fair value and
subsequently carried at amortised cost using the effective interest
method, less any provision for impairment.
Cash and cash equivalents comprise cash in hand and short-term
deposits in banks with an original maturity of three months or
less.
Financial liabilities
The Company's financial liabilities comprise trade and other
payables. They are initially recognised at fair value and
subsequently carried at amortised cost using the effective interest
method.
Share capital
The Company's ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of shares are
recognised in share premium as a deduction from proceeds of the
share issue.
Treasury shares
The Company's treasury shares are classified as equity. Treasury
shares are accounted for at cost and shown as a deduction from
equity in a separate reserve. Transfers from treasury shares are
recognised at the weighted average of the cost of acquiring the
treasury shares.
Share-based payments
Where the Company issues equity instruments to external parties
or employees as consideration for services received, the statement
of comprehensive income is charged with the fair value of the goods
and services received, except where services are directly
attributable to the issue of shares, in which case the fair value
of such amounts is recognised in equity as a deduction from share
premium.
Equity-settled transactions are awards of shares, or options
over shares that are provided to employees in exchange for the
rendering of services.
Equity-settled transactions are measured at fair value on grant
date. Fair value is independently determined using a Black-Scholes
option pricing model that takes into account the exercise price,
the term of the option, the impact of dilution, the share price at
grant date and expected price volatility of the underlying share,
the expected dividend yield and the risk free interest rate for the
term of the option, together with non-vesting conditions that do
not determine whether the consolidated entity receives the services
that entitle the employees to receive payment. No account is taken
of any other vesting conditions.
The cost of equity-settled transactions is recognised as an
expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based
on the grant date fair value of the award, the best estimate of the
number of awards that are likely to vest and the expired portion of
the vesting period. The amount recognised in profit or loss for the
period is the cumulative amount calculated at each reporting date
less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining
fair value. Therefore, any awards subject to market conditions are
considered to vest irrespective of whether or not that market
condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense
is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting
period, for any modification that increases the total fair value of
the share-based compensation benefit as at the date of
modification.
If the non-vesting condition is within the control of the
Company or employee, the failure to satisfy the condition is
treated as a cancellation.
If an equity-settled award is cancelled, it is treated as if it
has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is
substituted for the cancelled award, the cancelled and new awards
are treated as if they were a modification.
Taxation
As the Company is managed and controlled in Jersey it is liable
to be charged to tax at a rate of 0% under schedule D of the Income
Tax (Jersey) Law 1961 as amended.
Expenses
Expenses are accounted for on an accruals basis.
Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker is responsible for allocating
resources and assessing performance of the operating segments and
has been identified as the Board of Directors of the Company.
The Company is organised into a single operating segment being
the holding of U(3) O(8) for long-term capital appreciation.
Critical accounting judgments and estimation uncertainty
The preparation of financial statements requires management to
make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. Revisions to accounting estimates are recognised in
the year in which the estimate is revised and in any future years
affected.
The resulting accounting estimates will, by definition, seldom
equate to the related actual results.
Accounting estimates
The key accounting estimates in prior periods were the
assumptions made in valuing the uranium derivative liability. The
option in favour of Kazatomprom was exercised on 22 November
2021.
Judgements
The Company receives regular tax advice and opinions from its
advisors and accountants to ensure it is aware of, and can seek to
mitigate the effects on its tax position of, changes in regulation.
While the Company stores its uranium in storage facilities in
Canada and France, the Company does not carry on business in either
of these jurisdictions. The directors have considered the tax
implications of the Company's operations and have reached judgement
that no tax liability has arisen during the year (year ended 31
March 2022: USDnil).
Management of financial risks
3.
Financial risk factors
The Company's financial assets and liabilities comprise of cash,
receivables and payables that arise directly from its operations.
The accounting policies in note 2 include criteria for the
recognition and the basis of measurement applied for financial
assets and liabilities. Note 2 also includes the basis on which
income and expenses arising from financial assets and liabilities
are recognised and measured.
The Company's assets and liabilities have been primarily
categorised as assets and liabilities at amortised cost, with the
exception of the investment in uranium being held at fair value.
The carrying amounts of all such instruments are as stated in their
respective notes.
Market risk
The fair value or future cash flows of a financial instrument
may fluctuate because of changes in market prices. This market risk
comprises two elements - interest rate risk and other price risk
and arises mainly from the changes in values of the investment of
uranium and derivatives.
Interest rate risk
Any cash balances are held on variable rate bank accounts or in
money market funds yielding rates of interest dependent on the base
rate of the applicable institution or fund return.
Price risk and sensitivity
If the value of the investment in uranium fell by 5% at the year
end, the profit after tax would decrease by USD47,625,185 (year
ended 31 March 2022: USD45,835,826. Likewise, if the value rose by
5% the profit after tax would have increased by USD47,625,185 (year
ended 31 March 2022: USD45,835,826).
Economic risk
Geopolitical events that occurred in Russia-Ukraine during the
Company's financial year have not had a material impact to date on
the Company's operations, nor affected its financial position.
While the Company has purchased and intends to continue to purchase
U(3) O(8) from Kazatomprom, the Kazakh national atomic company, all
U(3) O(8) to which the Company has title and has paid for, is held
at the Cameco storage facility in Canada and the Orano storage
facility in France.
The Company has agreed to purchase 1,350,000 lb of U(3) O(8)
under its agreement with Kazatomprom (the "Framework Agreement")
and expects to take delivery at the Cameco storage facility in
Canada by 30 September 2023. Payment will be released to
Kazatomprom following delivery to the Company.
While part of Kazatomprom's production is transported through
Russia, the Company is unaware of any restrictions on Kazatomprom's
activities related to the supply of its products to end customers
and the Company does not anticipate any material delays to the
delivery dates indicated above. There are nevertheless risks
associated with both transit through the territory of Russia and
the delivery of cargo by sea vessels, which could adversely impact
deliveries from Kazatomprom.
Liquidity risk
This is the risk that the Company will encounter in realising
assets or otherwise raising funds to meet financial commitments.
Prudent liquidity risk management involves maintaining sufficient
liquidity and short-term investment securities, being able to raise
funds based on suitably adapted lines of credit and a capacity to
unwind market positions.
At year end, the liquidity of the Company is composed of either
bank account or bank deposits, for a total amount of USD84,428,484
(31 March 2022: USD153,136,073). The Company's cash and cash
equivalents are held with Citibank Europe PLC, which is rated A+
(2022: A+) according to ratings agency Fitch.
Carrying amount <1 year 1 to 2 years 2 to 10 years
As at 31 March 2023 USD '000 USD '000 USD '000 USD '000
============================= =============== ================= ============ =============
Cash and cash equivalents 84,428 84,428 - -
Other creditors and accruals (1,930) (1,930) - -
As at 31 March 2022
============================= =============== ================= ============ =============
Cash and cash equivalents 153,136 153,136 - -
Other creditors and accruals (970) (970) - -
============================= =============== ================= ============ =============
Fair value estimation
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether
that price is directly observable or estimated using another
valuation technique. In estimating the fair value of an asset or
liability, the Company takes into account the characteristics of
the asset or liability at the measurement date. IFRS 13 "Fair Value
Measurement" requires the Company to classify fair value
measurements using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. The
fair value hierarchy has the following levels:
1 Quoted prices (unadjusted) in active markets for identical
- assets or liabilities (level 1);
2 Inputs other than quoted prices included within level
- 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is,
derived from prices) (level 2); and
3 Inputs for the asset or liability that are not based on
- observable market data (that is, unobservable inputs)
(level 3).
The level to the fair value hierarchy within which the fair
value measurement is categorised in its entirety is determined on
the basis of the lowest level input that is significant of an input
is assessed against the fair value measurement in its entirety. If
a fair value measurement uses observable inputs that require
significant adjustment based on unobservable inputs, that
measurement is a level 3 measurement. Assessing the significance of
a particular input to the fair value measurement in its entirety
requires judgement, considering factors specific to the asset or
liability. The following table analyses within the fair value
hierarchy the Company's financial assets and liabilities (by class)
measured at fair value.
Assets and liabilities Level 1 Level 2 Level 3 Total
As at 31 March 2023 USD '000 USD '000 USD '000 USD '000
======================= ======== ======== ======== ========
Investment in uranium 952,504 - - 952,504
As at 31 March 2022
Investment in uranium 916,717 - - 916,717
======================= ======== ======== ======== ========
Investment in uranium
4.
Fair value USD '000
========================= ===================
As at 31 March 2021 302,098
------------------------- -------------------
Acquisition of U(3) O(8) 284,890
Change in fair value 433,274
Sale of U(3) O(8) (103,545)
------------------------- -------------------
As at 31 March 2022 916,717
------------------------- -------------------
Acquisition of U(3) O(8) 132,689
Change in fair value (96,902)
------------------------- -------------------
As at 31 March 2023 952,504
========================= ===================
The value of the Company's investment in U(3) O(8) is based on
the daily spot price for U(3) O(8) of USD50.65/lb as published by
UxC LLC on 31 March 2023 (2022: USD 57.90/lb as published by UxC
LLC on 31 March 2022).
As at 31 March 2023, the Company:
- Had purchased a total of 21,476,515 lb of U(3) O(8) at an
average price of USD29.85/lb;
- Had disposed of 2,670,914 lb of U(3) O(8) at an average
price of USD 40.23/lb that had been acquired at an average
price of USD21.01 /lb, assuming a first-in-first-out methodology;
and
- Held a total of 18,805,601 lb of U(3) O(8) at an average
price of USD31.11/lb for a net total cash consideration
of USD585.1 million, assuming a first-in-first-out methodology.
Purchase of uranium
The Company completed the following purchase transactions during
the year:
- The Company exercised its option under its Framework Agreement
with Kazatomprom to buy back 2,022,846 lb of U(3) O(8) from
Kazatomprom at a cost of USD43.25/lb or USD87.5 million
in aggregate consideration. This was received by the Company
at the Cameco storage facility in Canada on 19 May 2022.
- Pursuant to Kazatomprom's offer of 26 October 2021, the
Company entered into an agreement with Kazatomprom to purchase
950,000 lb of U(3) O(8) at a price of USD47.58/lb for a
total consideration of USD45.2 million. This was received
by the Company at the Cameco storage facility in Canada
on 30 June 2022.
Post year-end purchases of uranium
Following the completion of the approximately GBP62 million
share placing on 7 February 2023, the Company elected to purchase
1,350,000lb of U(3) O(8) at a price of USD48.90/lb for a total
consideration of USD66.0 million as part of its 2022 uranium
purchase option under its Framework Agreement with Kazatomprom. The
Company expects to take delivery at the Cameco storage facility in
Canada by 30 September 2023.
Sale of uranium
During the period, there were no sales of uranium.
The following table provides a summary of the Company's
investment in U(3) O(8) at 31 March 2023:
Quantity Fair value
lb USD '000
Canada 18,505,601 937,309
France 300,000 15,195
------- ---------- ----------
Total 18,805,601 952,504
======= ========== ==========
5. Trade and other receivables
As at As at
31 March 2023 31 March 2022
USD '000 USD '000
================== ============= =============
Other receivables 324 130
------------------ ------------- -------------
324 130
================== ============= =============
6. Cash and cash equivalents
Cash and cash equivalents as at 31 March 2023 were held with
Citi Bank Europe plc in a variable interest account with full
access. Balances at the end of the year were USD84,420,908 and
GBP6,127 a total of USD84,428,484 equivalent (31 March 2022:
USD152,243,206 and GBP678,367 a total of USD153,136,073
equivalent).
7.
Trade
and
other
payables
As at As at
31 March 2023 31 March 2022
USD '000 USD '000
============================ ============= =============
Other payables and accruals 1,930 970
---------------------------- ------------- -------------
1,930 970
============================ ============= =============
Share capital
8.
Authorised :
10,000,000,000 ordinary shares of GBP0.01
Issued and fully paid:
Ordinary shares
Number GBP '000 USD '000
================================== =========== ======== ========
Share capital as at 31 March 2021 132,740,730 1,327 1,785
---------------------------------- ----------- -------- --------
Issued 21 June 2021 25,000,000 250 348
Issued 29 October 2021 30,000,000 300 411
---------------------------------- ----------- -------- --------
Share capital as at 31 March 2022 187,740,730 1,877 2,544
---------------------------------- ----------- -------- --------
Issued 7 February 2023 15,000,000 150 180
---------------------------------- ----------- -------- --------
Share capital as at 31 March 2023 202,740,730 2,027 2,724
================================== =========== ======== ========
The number of shares in issue above includes the 4,636,331
Treasury shares - refer to note 10.
Share premium
GBP '000 USD '000
================================== ======== ========
Share premium as at 31 March 2021 266,290 358,812
----------------------------------- -------- --------
Proceeds of issue of shares 171,150 235,818
Share issue costs (4,684) (6,449)
----------------------------------- -------- --------
Share premium as at 31 March 2022 432,756 588,181
----------------------------------- -------- --------
Proceeds of issue of shares 61,650 74,072
Share issue costs (1,706) (2,050)
----------------------------------- -------- --------
Share premium as at 31 March 2023 492,700 660,203
=================================== ======== ========
The Company has one class of shares which carry no right to
fixed income.
On 7 February 2023, the Company issued a total of 15,000,000 new
ordinary shares to existing and new institutional investors, at a
price of GBP4.12 per share. The Company incurred listing expenses,
comprising of commissions and professional adviser fees totalling
USD2,194,125 of which USD2,050,108 have been taken to the share
premium account. Additional placing costs of USD144,017 have been
recognised in the statement of comprehensive income. Net proceeds
from the placing were GBP 59,974,596 (USD equivalent:
72,058,575).
9. Share-based payments
The Company implemented an equity-settled share-based
compensation plan in 2019 which provides for the award of long-term
incentives and an annual bonus to management personnel.
During the period, USD43,996 was recognised in the statement of
comprehensive income, in relation to share-based payments (31 March
2022: USD220,285).
Annual bonus
The annual bonus award in relation to a financial year is
usually granted following publication of the Company's audited
annual results for that financial year. The annual bonus awards are
either in cash or in the form of nominal-cost options, which
usually will vest and become exercisable no earlier than one year
after grant.
In respect of the 2022 and 2023 financial years, annual bonuses
were paid in cash and no share-based annual bonus awards were made.
The annual bonus award in respect of the year ended 31 March 2023
was based on commercial targets and was 50% of base salary (31
March 2022: 70% of base salary).
Long-term incentive
The long-term incentive is in the form of options granted to
acquire shares in the Company that will become exercisable not
earlier than three years after grant (save in certain circumstances
including a change of control of the Company) and will expire 10
years after the date of grant. The option exercise price has been
determined to be the net asset value per share at the grant date of
the shares placed under option. The options are subject to a
post-vesting holding period of not less than two years (although
sufficient shares may be sold on exercise in order to meet tax
liabilities arising at vesting). Prior to 1 April 2022, the face
value (exercise price of the options multiplied by the number of
options granted) was capped at 125% of salary. Following this date,
the cap was reduced for the CEO and CFO respectively to 75% and
45%. Each option gives the right to acquire one share in the
Company.
The long-term incentive award relating to a financial year is
usually granted at the beginning of that financial year. The
exercise of each of the long-term incentive options is conditional
upon the share price as at the exercise date being equal to or
greater than the net asset value per share of the Company as at the
date of grant.
Set out below is the summary of the long-term incentive options
awarded on 24 February 2020 in relation to the year ended 31 March
2020, on 8 July 2020 in relation to the year ended 31 March 2021
and on 3 November 2022 in relation to the year ended 31 March
2023:
Expired/
Opening forfeited/ Closing
Director Grant date Vesting date Exercise price balance Exercised other balance
A Liebenberg 24/02/2020 24/02/2023 GBP2.13 84,480 - - 84,480
C Whittall 24/02/2020 24/02/2023 GBP2.13 67,584 - - 67,584
-------------- ----------- ------------- --------------- -------------- --------- -------------- --------------
Total 152,064 152,064
----------------------------------------------------------- -------------- --------- -------------- --------------
Total fair value as at the grant date* USD 56,967
=========================================================== ============== ========= ============== ==============
* The USD equivalent is derived using the FX rate as at the date of reporting.
Expired/
Opening forfeited/ Closing
Director Grant date Vesting date Exercise price balance Exercised other balance
A Liebenberg 08/07/2020 08/07/2023 GBP2.88 78,262 - - 78,262
C Whittall 08/07/2020 08/07/2023 GBP2.88 62,609 - - 62,609
-------------- ----------- -------------- --------------- ------------- --------- ------------- -------------
Total 140,871 140,871
------------------------------------------------------------ ------------- --------- ------------- -------------
Total fair value as at the grant date* USD 41,976
============================================================ ============= ========= ============= =============
* The USD equivalent is derived using the FX rate as at the date of reporting.
Expired/
Exercise Opening forfeited/ Closing
Director Grant date Vesting date price balance Exercised other balance
A Liebenberg 03/11/2022 03/11/2025 GBP4.75 33,162 - - 33,162
C Whittall 03/11/2022 03/11/2025 GBP4.75 14,094 - - 14,094
------------- ------------ -------------- -------------- ------------ --------- ------------ ------------
Total 47,256 47,256
----------------------------------------------------------- ------------ --------- ------------ ------------
Total fair value as at the grant date* USD 60,998
=========================================================== ============ ========= ============ ============
* The USD equivalent is derived using the FX rate as at the date of reporting
Subsequent to the grant of the 2020 and 2021 long-term incentive
awards, the plan was amended such that the exercise price per share
represents the estimated net asset value per share on the grant
date.
A Black-Scholes option pricing model was used to determine the
fair value of the long-term incentive options. The valuation model
inputs used to determine the fair value at the grant date are as
follows:
Fair Fair
value at value at
Share price at Expected Risk-free grant grant
Grant date Vesting date grant date Exercise price volatility interest rate date GBP date USD*
=========== ============= ============== ============== ============= ============= ============= =============
24/02/2020 24/02/2023 GBP1.95 GBP1.97 25% 0.40% GBP46,075 USD56,967
08/07/2020 08/07/2023 GBP2.26 GBP2.88 30% (0.08%) GBP33,950 USD41,976
03/11/2022 03/11/2025 GBP4.30 GBP4.75 40% 3.21% GBP49,335 USD60,998
----------- ------------- -------------- -------------- ------------- ------------- ------------- -------------
* The USD equivalent is derived using the FX rate as at the date of reporting.
10. Treasury shares
Number GBP '000 USD '000
------------------------------------ --------- -------- --------
Treasury shares as 31 March 2021 4,156,385 8,866 11,458
Exercise of bonus options (86,887) (185) (239)
------------------------------------ --------- -------- --------
Treasury shares as at 31 March 2022 4,069,498 8,681 11,219
------------------------------------ --------- -------- --------
Purchase in the year 566,833 2,352 2,997
------------------------------------ --------- -------- --------
Treasury shares as at 31 March 2023 4,636,331 11,033 14,216
==================================== ========= ======== ========
In April 2022, Yellow Cake announced the initiation of a share
buyback programme to purchase up to USD3 million of the Company's
Ordinary Shares over 30 calendar days commencing on 4 April 2022
(the "Programme"). Given that the Company's shares had traded at a
material discount to its underlying net asset value since
mid-January 2022, the Yellow Cake Board resolved to implement a
share buyback programme as a means of effectively acquiring
exposure to uranium at a discount to the commodity spot price.
Shares were purchased when the closing mid-market share price of
the Company on any given day represented a discount of 10% or more
to the Company's pro forma net asset value at that time. Under the
Programme, the Company acquired 566,833 shares between 4 April and
6 May 2022, at a volume weighted average purchase price of GBP4.15
per share or USD3 million in aggregate and at a volume weighted
average discount to the Company's pro formanet asset value of
10.4%.
11. Commissions, procurement and consultancy fees
308 Services Limited ("308 Services") provides procurement
services to the Company relating to the sourcing of U(3) O(8) and
other uranium transactions and in securing competitively priced
converter storage services.
In terms of the agreement entered into between the Company and
308 Services on 30 May 2018, 308 Services is entitled to receive
(i) a Holding Fee comprised of a Fixed Fee of USD275,000 per
calendar year plus a Variable Fee equal to 0.275% per annum of the
amount by which the value of the Company's holdings of U(3) O(8)
exceeds USD100 million and (ii) an Annual Storage Incentive Fee
equal to 33% of the difference between the amount obtained by
multiplying the Target Storage Cost (initially set at USD0.12/lb
per year) by the volume of U(3) O(8) (in pounds) owned by the
Company on 31 December of each respective year and the total
converter storage fees paid by the Company in the preceding
calendar year.
The Company considers Holding Fees and Storage Incentive Fees to
be costs of an ongoing nature. During the period the Company paid
Holding Fees and Storage Incentive Fees of USD3,092,083 (31 March
2022: USD2,129,617) to 308 Services.
308 Services is also entitled to receive a commission equivalent
to 0.5% of the transaction value in respect of certain uranium sale
and purchase transactions completed at the request of the Yellow
Cake Board.
In addition, if the purchase price paid by the Company in
respect of such a purchase transaction is in the lowest quartile of
the range of reported uranium spot prices in the calendar year in
which the transaction completed, 308 Services is entitled to
receive, at the beginning of the following calendar year, an
additional commission of 0.5% of the value of the uranium
transacted. If the purchase price paid by the Company in respect of
such a purchase transaction is in the second lowest quartile of the
range of reported uranium spot prices in the calendar year in which
the transaction completed, 308 Services is entitled to receive, at
the beginning of the following calendar year, an additional
commission of 0.25% of the value of the uranium transacted. If the
purchase price is in the top half of the range for the calendar
year in which the transaction completed, no additional commission
will be payable to 308 Services.
During the period, commissions payable to 308 Services totalled
USD226,005 (31 March 2022: USD1,884,453).
12. Other operating expenses
1 April 2022 to 1 April 2021 to
31 March 2023 31 March 2022
USD '000 USD '000
======================================== =============== ===============
Professional fees 772 769
Management salaries and Directors' fees 965 709
Other expenses 1,590 603
Auditor's fees 139 99
---------------------------------------- --------------- ---------------
3,466 2,180
======================================== =============== ===============
13. Taxation
1 April 2022 to 1 April 2021 to
31 March 2023 31 March 2022
USD '000 USD '000
======================== =============== ===============
Tax expense for the year - -
------------------------ --------------- ---------------
- -
======================== =============== ===============
As the Company is managed and controlled in Jersey it is liable
to be charged tax at a rate of 0% under schedule D of the Income
Tax (Jersey) Law 1961 as amended.
Related party transactions
14.
During the year, the Company incurred USD160,607 (31 March 2022:
USD186,056) of administration fees payable to Langham Hall Fund
Management (Jersey) Limited ("Langham Hall"). Emily Manning was an
employee of Langham Hall and served as a Non-Executive Director of
the Company from 31 March 2021 to 8 November 2022, for which she
received no Directors' fees. Claire Brazenall was an employee of
Langham Hall and has served as a Non-Executive Director of the
Company since 9 November 2022, for which she has received no
Directors' fees. As at 31 March 2023 there were no amounts due to
Langham Hall (31 March 2022: USD nil).
The key management personnel are the directors and there are no
other employees. Their remuneration is detailed in note 12 and
represented within "Other operating expenses" in the Statement of
Comprehensive Income.
The following Directors own ordinary shares in the Company as at
31 March 2023:
% of share
Number of capital as at
ordinary shares 31 March 2023
============================ =============== =============
The Lord St John of Bletso* 26,302 0.01%
Sofia Bianchi 13,186 0.01%
The Hon Alexander Downer 29,925 0.02%
Claire Brazenall - -
Alan Rule 18,837 0.01%
Andre Liebenberg 121,478 0.06%
Carole Whittall 49,918 0.03%
---------------------------- --------------- -------------
Total 259,646 0.14%
============================ =============== =============
* The Lord St John of Bletso's shares are held through African
Business Solutions Limited, in which he holds 100% of the Ordinary
Shares.
While the Non-Executive Directors hold shares in the Company,
the holdings are considered sufficiently small so as not to impinge
on their independence.
15. Earnings per share
1 April 2022 to 1 April 2021 to
31 March 2023 31 March 2022
USD '000 USD '000
================================================================================= =============== ===============
(Loss)/profit for the year (USD '000) (102,936) 417,271
--------------------------------------------------------------------------------- --------------- ---------------
Weighted average number of shares during the year - Basic* 185,323,320 160,754,398
Weighted average number of shares during the year - Diluted* 185,635,546 161,046,530
(Loss)/earnings per share attributable to the equity owners of the Company (USD)
Basic (0.56) 2.60
Diluted (0.56) 2.59
================================================================================= =============== ===============
* The weighted average number of shares excludes treasury shares.
16. Events after the reporting date
There were no material events after the reporting date.
[1] Based on the daily spot price of USD57.90/lb published by
UxC LLC on 31 March 2022 and the daily spot price of USD50.65/lb
published by UxC LLC on 31 March 2023.
[2] Net asset value per share as at 31 March 2023 is calculated
assuming 202,740,730 ordinary shares in issue less 4,636,331 shares
held in treasury, the Bank of England's daily USD/GBP exchange rate
of 1.2364 as at 31 March 2023 and the daily spot price published by
UxC LLC on 31 March 2023.
[3] UxC Weekly, 2022 U(3) O(8) Production Review, 15/05/23.
[4] Estimated net asset value per share as at 12 July 2023 is
calculated assuming 202,740,730 ordinary shares in issue, less
4,604,645 shares held in treasury, a USD/GBP exchange rate of
1.2997 and the daily spot price published by UxC LLC on 12 July
2023.
[5] Average cost calculated based on a first-in, first-out methodology.
([6]) Net asset value per share as at 31 March 2023 is
calculated assuming 202,740,730 ordinary shares in issue less
4,636,331 shares held in treasury, the Bank of England's daily
USD/GBP exchange rate of 1.2364 as at 31 March 2023 and the daily
spot price published by UxC LLC on 31 March 2023.
([7]) Estimated proforma net asset value per share as at 12 July
2023 is calculated assuming 202,740,730 ordinary shares in issue,
less 4,604,645 shares held in treasury, the Bank of England's
USD/GBP exchange rate of 1.2997 as at 12 July 2023 and the daily
spot price published by UxC LLC on 12 July 2023.
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END
FR NKFBDKBKBFOD
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