Geiger Counter Ltd : Annual Financial Report

GEIGER COUNTER LIMITED

Date of Announcement: 18/12/2015

RELEASE OF REPORT AND FINANCIAL STATEMENTS

The Directors announce the release of the Annual Report and Financial Statements for the year ended 30 September 2015.

CHAIRMAN'S STATEMENT - FOR THE YEAR ENDED 30 SEPTEMBER 2015

The hope for return to a positive sentiment that we thought might happen for the period under review, sadly failed to materialise. Increased concerns about the Chinese economy, coupled with relatively dormant growth elsewhere in the world provided a dull background for commodities. Uranium traded in a relatively narrow range between USD 35 and USD 40 per pound and finished the period exactly halfway between the two. Reflecting a wide scale exit from the natural resources sector our shares drifted throughout the period. Fundamentally the background news was largely encouraging. Unit 2 at the Sendai nuclear power plant in Japan was finally restarted; while even more promising was the news that due process was proceeding on the restarting of a further twenty reactors.

Although some of the reports were confusing as to who was going to do what; it appears that a combination of the French and Chinese will jointly construct the new reactor due to be built at Hinkley Point in Somerset. Perhaps the one bright note was the pick up in corporate activity. Denison proposed a merger with Fission while Uranium Resources successfully concluded a tie up with Anatolia.

When it comes to predictions for the next year or so I find myself in more of a dilemma than usual. I'm confident that demand for new reactors will show further growth, but it might be that countries such as Kazakhstan continue to supply the market, almost regardless of price leaving the relevant share market somewhat stranded.

On the corporate governance front we have introduced an Audit and Risk Committee which will be chaired by our new director Gary Clark who replaces Graeme Ross. The board extends its grateful thanks to Graeme who has done a sterling job since the company's inception. In addition to these changes to the Board we are proposing a change to the Articles of Association in order that each Director will stand for re-election on an annual basis. All Directors will stand for re-election this year.

At the forthcoming Annual General Meeting to be held in March 2016 shareholders will again be given the opportunity to vote on the continuation of the Company. Although next year will continue to be a challenge the Board will be recommending in favour of continuation, as mentioned previously the underlying fundamentals remain positive in the medium to long term.

On a personal note I would like to thank the shareholders for their continued support and all the Geiger team for their valued advice and guidance during the last twelve months.

George Baird
Chairman
30 November 2015

INVESTMENT ADVISER'S REPORT - FOR THE YEAR ENDED 30 SEPTEMBER 2015

Physical uranium and equity prices struggled to sustain their particularly positive start to the year as the encouraging initial news of Japan's reactor restart programme was slowed by local court objections. Though five reactors have received official approval to restart by Japan's Nuclear Regulatory Authority, to date the actual pace of reactivation has proved disappointing. This has weighed on sentiment towards the year end, with the two "fast-tracked" Sendai facilities the only reactors to recommence electricity production.

The Fukui Court decision, due before February 2016, could allow Takahama reactors 3&4, located in the resistant prefecture, to restart. This we believe may help improve the experience in dealing with the operational and local court proceedings and accelerate the rate of progress which has put pressure on equities to date. Meanwhile Japan's nuclear regulator continues to approve reactivations, with the Ikata 3 reactor the fifth to be approved as the nation seeks to implement clean power targets. A concerted public charm offensive by the Japan's Federation of Electric Power Companies with a newly formed emergency response unit due to become operational in 2016 may also help improve public opinion and ease the reactivation process.

Notwithstanding complications arising from Japan's local court process, the industry outlook remains extremely positive, led by China and India's intentions to expand their voracious clean air power requirements. Of particular note, despite another round of safety checks after the Tianjin port explosion, China continues to work towards a 20% nuclear power generation mix which will drive a near ten-fold increase in nuclear capacity by 2030 from the currently installed 23GW.

Broader malaise towards resources, a result of sluggish global growth and US dollar strength, has also been unhelpful. This has potentially contributed to recent commodity and equity declines, with the spot uranium price retreating from its US$44/lb high early in the year to the current US$36/lb level. Nevertheless, uranium represents one of the best performing commodities over the financial year, rising 2.5% (10% in sterling terms) over the period.

Equity performances have displayed little discrimination. The defensive strategy behind the proposed mergers of explorer/developers Fission and Denison and of in-situ recovery project owners Anatolia and Uranium Resources provided little equity support, illustrative of the degree of investor malaise.

Lower cost producers, such as US in-situ recovery operators, having initially shown robust performance subsequently slipped back in-line with other the sector constituents. While the Fund retains a healthy exposure to these low cost producers, its holding of UEC was sold. UEC briefly approached US$3 per share, exceeding our group valuation over the summer. Impressive assay results were posted by explorers Nexgen and Berkeley Resources, whose share prices increased 30% and 20% respectively in sterling terms over the year. The Fund retained its position in Hong-Kong-listed China Guangdong Nuclear Power, which we believe may benefit disproportionately from China's huge domestic nuclear roll-out programme. It may also deploy its technology to compete effectively against international service provides such as Areva, with its recent successful participation in the UK's Hinkley Point project endorsing its credentials.

The Fund NAV declined approximately 43%, in-line with the sterling decline of the URA Uranium Equity ETF. The discount on the physically-backed uranium ETF, Uranium Participation, widened from 3.7% to approximately 21% currently, similar to the current discount to the Company's NAV.

Robert Crayfourd and Keith Watson
New City Investment Managers
30 November 2015
For further information please contact:

Craig Cleland - New City Investment Managers - 020 7201 5368

Lisa Neil - R&H Fund Services (Jersey) Limited - 01534 825 336

Annual Report

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Source: Geiger Counter Ltd via Globenewswire

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