Gem Diamonds (GEMD) surprised the City with full-year net earnings of $57.9m (£39.1m), a 52 per cent increase year on year. And although foreshadowed, the miner's maiden dividend declaration is very welcome. In all, Gem Diamonds delivered a total return of 23 per cent in 2014.
But perhaps the group's most noteworthy achievement was the successful commissioning of production at the Ghaghoo mine in Botswana. Ghaghoo was delivered on time and within budget - a rarity in diamond mining. And first production from the mine revealed diamonds of superior quality and size than those unearthed during the exploration phase.
An average price of $2,540 per carat was achieved at Gem's flagship Letseng mine in Lesotho. Despite some political unrest, 108,569 carats were recovered from the mine - including five exceptional diamonds that together accounted for 14 percent of group revenue. Diamond recovery at Letseng should continue to improve following the installation of a new coarse recovery unit, due at the end of the second quarter, as well as a phased upgrade project designed to increase throughput and reduce breakage.
Prior to these figures, Westhouse Securities anticipated 2015 pre-tax profit of $91.3m, with EPS of 26.9¢.
| GEM DIAMONDS (GEMD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 140p | MARKET VALUE: | £194m | |
| TOUCH: | 140-144p | 12-MONTH HIGH: | 223p | LOW: 134p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 220¢ | NET CASH: | $73.4m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | 266 | 54.0 | 15.0 | nil |
| 2011 | 396 | 156 | 47.0 | nil |
| 2012 | 202 | 35.0 | -74.0 | nil |
| 2013 | 213 | 59.0 | 15.3 | nil |
| 2014 | 271 | 92.9 | 24.0 | 5.0 |
| % change | +27 | +57 | +57 | - |
Ex-div: 7 May Payment: 9 Jun £1=$1.48 | ||||
