Gemfields (GEM) turned in cash profits of $61.7m (£40.1m) at the half-year mark - more than triple the 2013 figure. The interim numbers would have been even more impressive if the group's high-end Fabergé jewellery business hadn't logged a material slump in sales as a result of the dispute between Ukraine and Russia.
Gemfields, which holds majority stakes in the Kagem emerald mine in Zambia and the Montepuez ruby operation in Mozambique, continues to deliver operationally. Production at Kagem was up 16 per cent to 12.1m carats, despite the mining of lower-grade deposits. Further production increases could follow on the back of a project under way at the Chama pit, together with a step-up in the bulk sampling programme at the nearby Libwente and Fibolele pits.
Unlike diamonds, coloured gemstones held their value during the final quarter of 2014. An auction of high-end emeralds in November set a record average price of $65.89 per carat. The miner also achieved record prices at an auction of rubies held in Singapore during December. As at Kagem, production at Montepuez rose despite lower grades. Gemfields doubled the size of its licensing area in Mozambique, too.
Charles Stanley expects normalised EPS of 2.27p this year, up from 1.04p in 2014.
| GEMFIELDS (GEM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 50p | MARKET VALUE: | £269m | |
| TOUCH: | 50-51p | 12-MONTH HIGH: | 55p | LOW: 35p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 16 | |
| NET ASSET VALUE: | 47¢* | NET CASH: | $19.4m | |
| Half-year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2013 | 65.7 | 7.8 | 0.26 | nil |
| 2014 | 103 | 43.5 | 3.00 | nil |
| % change | +57 | +459 | - | - |
Ex-div: na Payment: na £1 = $1.51 *Includes intangible assets of $45.7m, or 8¢ a share | ||||
