REG - Geiger Counter Ltd Geiger Counter - GCS - Release of Interim Report and Financial Statements

Geiger CounterAnnouncement

30/06/2025 17:30

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RNS Number : 0636P  Geiger Counter Ltd  30 June 2025

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
(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

 Manulife CQS Investment Management      Craig Cleland                              T: +44 (0) 20 7201 5368

 Cavendish Capital Markets Limited       Tunga Chigovanyika                         T: +44 (0) 20 7220 0557

                                         (Corporate Finance)

                                         Daniel Balabanoff / Pauline Tribe (Sales)  T: +44 (0) 20 7220 0500

 R&H Fund Services (Jersey) Limited      Jane De Barros                             T :+44 (0) 1534 825 259

 

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