Profile image - Gemfields group, Kagem - 16072019 - JPG

Gemfields Group

JP: GML

ZAR1913.9m market cap

ZAR1.51 last close

Gemfields is a world-leading supplier of responsibly sourced coloured gemstones. It owns 75% of Montepuez Ruby Mining in Mozambique, 75% of the Kagem emerald mine in Zambia, the Fabergé jewellery business and investments in Jupiter Mines and Sedibelo Platinum.

Investment summary

Gemfields reported a solid set of half-year 2019 results despite the (previously announced) lower auction revenue from MRM and lower sales at Fabergé. EBITDA was up 3% to US$33.1m (from US$32.1m in H118) despite revenue 13% lower at US$89.0m (from US$102.1m. The company ended June with net cash of US$35.5m, up from US$9.8m in December, driven by the partial sale of its stake in Jupiter, as well as free cash flow from operations.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 81.7 30.5 55.8 3.9 2.6 N/A
2018A 206.1 58.9 (22.5) (2.3) N/A N/A
2019E 191.1 49.9 22.2 0.4 25.3 N/A
2020E 216.2 57.6 27.6 0.1 101.1 N/A
Last updated on 21/10/2019
Industry outlook

Investors concerned that weak diamond market conditions may also be reflected in coloured gemstones should take heart from Gemfields’ most recent auction results: at Montepuez Ruby Mining’s (MRM’s) June auction 98% of lots sold by weight and one lot achieved a record price per carat; Kagem’s August auction totalled US$18.6m – the highest for a commercial quality auction since November 2015. Current diamond market challenges are most unique to that sub-sector with very limited read across to coloured gemstones.

Last updated on 21/10/2019
Share price graph
Balance sheet
Forecast net cash (US$m) 44.7
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (8.5) (5.6) (22.6)
Relative* (8.0) (2.0) (28.1)
52-week high/low ZAR2.1/ZAR1.4
*% relative to local index
Key management
Sean Gilbertson CEO
David Lovett CFO