Yellow Cake posted a maiden annual profit of $29.7m as the value of its uranium holdings increased by 22% to $217.4m.
The specialist uranium company purchased just over 8.4m pounds of the substance from Kazakh giant Kazatomprom over the 12-month period ended 31 March, its first full year as a publicly traded company, having raised £151m from its oversubscribed IPO on London’s AIM market in July 2018.
Yellow Cake had cash and cash equivalents of $8.8m as at 31 March and has raised an additional £25.9m through the placing of 12m new shares in April.
Andre Liebenberg, chief executive of Yellow Cake, said: “We continue to believe that the uranium market is structurally mis-priced and that prices will continue to rise in the long-term. Despite some continued volatility, market activity has justified our investment proposition, with the spot price increasing by 13% from $22.85/lb at our IPO to $25.75/lb at the end of March 2019.”
Trading uranium also appears to be growing in popularity, as monthly spot market transactions reached record volumes in 2018 and the calendar year saw around 88m pounds traded, more than 30% above the average annual volumes over the last decade.
Looking to the future, the company said long-term fundamentals for nuclear energy remain compelling, with the uranium industry’s supply and demand dynamics suggesting support for the uranium price, while support from existing and new shareholders for the recent capital raise demonstrates further confidence regarding the long-term outlook for the uranium price.
Yellow Cake’s shares were up 1.69% at 210.50p at 0908 BST.