Bacchus Capital Advisers are the founders of Yellow Cake plc, which specifically operates in the uranium sector. The material, which is in a solid state is a mixture of uranium oxides generally yellow in colour, produced from uranium ore in the extraction of uraniumÂ is called yellow cake. The material is further sent to processing facilities. The company is into procurement and storage of physical uranium and uranium oxide ("U3O8") for the longer term to consistently explore a range of opportunities such as commodity streaming and royalties thereby offering shareholders an opportunity to create a position in uranium pricing.
Â The company has a strategic partnership with Kazatomprom, the low cost and largest producer of natural uranium in the world. This contract empowers the company to procure uranium at a pre-decided price so that any fluctuations in the price does not hinder in the acquisition of uranium stock. Thus, enabling the company to reap benefits from any surge in uranium prices to create better value for shareholders. Currently, the company has a stock of uranium oxide worth Â£8.4 million stored in Ontario, Canada.
Yellow Cake has taken possession of uranium (1.175 millionÂ lbs) from Kazatomprom. The company exercised its contract in April 2019 to procure uranium from Kazatomprom at a price of $25.88Â /lb.
By the end of May 2019, the uranium stockÂ was drop-shipped to the YCA (Yellow Cake) at Cameco Corporation's Port HopeÂ in Canada for storage. The total cost incurred for buying uranium stock amounts to US$ 30,409,000 and it will be paid in cash by the company. Post-transaction, the company reportedly has a stock of 9.62 million lbs of uranium. Â The average procurement cost to the company for procuring uranium is $21.68/Â lb, with an aggregate procurement cost of US$208.5 million.
James Keating who was associated with the company as an independent non-executive director has announced his resignation effective from 31 May 2019. The company has expressed immense gratitude for his sincere efforts and contributions to the company. The Board has expressed intent to appointÂ Alexandra Nethercott-ParkesÂ to replace Mr Keating as an independent non-executive director of the Company. Alexandra's appointment is under consideration and shall come into effect upon successful due diligence by the Company's Nominated Advisor.
Â Alexandra has more than 15 years of experience in privately managed, corporate funds administration, listed and regulated funds, large real estate companies, UK Real Estate Investment Trusts (REITâs) and capital markets. Alexandra has played a pivotal role at Jersey Financial Services Commission since 2016 and holds a BA (Hons) in Psychology with Economics and is an Associate of the Institute of Chartered Secretaries. Alexandra possesses comprehensive knowledge of listing rules, EU regulation, capital markets and alternative investments.
Interim Financial Highlights for the period ended 30 September 2018
The company was able to raise the capital of Â£151 million through Initial Public Offering on the London Stock Exchange. The spot price gained momentum from 22.85 USD/lb at the time of IPO to 27.35 USD /lb by the end of September 2018. The total holding of uranium was 8,441,385 lb, which was acquired at an average cost of 21.10 USD/ lb against a spot price of 27.35 USD/ lb at the end of September 2018.
The value of stock rose significantly by 30 per cent to $230.9 million by the end of September 2018 against $178.2 million at the time of procurement. By the end of September, the spot price of uranium in the market has risen to 29.15 USD/ lb, and accelerated the valuation of inventory to $246.1 million, up by 38 per cent from the procurement cost.
The PAT (profit after tax) stood at $44.2 million at the end of September 30, 2018. The Net Asset Value was GBP 2.39 (USD 3.12) per share as at 30 September 2018. The cash of the company stood at $9.8 million as on September 30th, 2018.
The company also recorded an unrealized gain of $49.7 million during this period which can be attributed to the steady rise in the value of the underlying stock. The Dividend was not declared for the first half of the Financial year 2019.
Yellow Cake Plc Share Price Performance
Daily Chart as at June-07-19, after the market closed (Source: Thomson Reuters)
On June 7, 2019, Yellow Cake PLC shares closed at GBX 209, down by 9 points or 4.13 per cent against the previous day closing price. Stock's 52 weeks High and Low is GBX 260.00 /GBX 193.00.
At the time of writing, the share was 19.62 per cent lower than the 52w High and 8.29 per cent higher than the 52w low.
Stock's average traded volume for 5 days was 121,591.20; 30 days â 100,483.53 and 90 days â 152,361.76. The average traded volume for 5 days was up by 21.01 per cent as compared to the 30 days average traded volume.
The outstanding market capitalisation was around Â£183.87 million. The companyâs stock beta was 0.13, reflecting significantly lower volatility as compared to the benchmark index.