The 12 per cent jump in the share price that followed publication of Gem Diamonds ' (GEMD) full-year results suggests the market had lost hope in the owner of the Letseng mine in Lesotho. Despite a number of operational headaches and a mixed year for diamond prices, favourable currency swings and a record year for Letseng contributed to a better than expected post-tax profit of $77m (£54.2m).
That represents a 28 per cent uplift on 2014, and was achieved in spite of a 15 per cent dip in rough diamond sales. This was in no small part thanks to the discovery of a record 11 diamonds exceeding 100 carats, and the sale of 36 rough diamonds for more than $1m each. Overall sales were also buttressed by a small $14.4m contribution from the Ghagoo mine, where Gem Diamonds has now completed the first phase of its development programme. The company would have wanted the Botswana operation to have come online sooner, resulting in a $24.8m increase in the carrying value of the asset.
Panmure Gordon expects full-year adjusted pre-tax profit of $66.7m, giving EPS of 17.4¢, against $79.5m and 21.2¢ in 2015.
GEM DIAMONDS (GEMD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 110.5p | MARKET VALUE: | £153m | |
| TOUCH: | 107.5-111p | 12-MONTH HIGH: | 160p | LOW: 95p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 4 | |
| NET ASSET VALUE: | 205¢ | NET CASH: | $55.3m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 396 | 156 | 47.0 | nil |
| 2012 | 202 | 35.0 | -74.0 | nil |
| 2013 | 213 | 59.0 | 15.3 | nil |
| 2014 | 271 | 95.4 | 24.0 | 5.0 |
| 2015 | 249 | 109 | 37.6 | 5.0* |
| % change | -8 | +14 | +57 | - |
Ex-div: 12 May Payment: 14 June £1=$1.42 *Excludes special dividend of 3.5¢ per share | ||||
