GENERAL FIELDS today declared a $15 million interim dividend following “sparkling” results that CEO Sean Gilbertson colorfully remarked were like pulling “a very well-groomed rabbit out of the hat.”
He also said he would seek shareholder approval in the fourth quarter of this calendar year for a $10 million buyback of his shares, which have gained 14% over the past 12 months.
“Gemfields shareholders have waited approximately 17 years for their first dividend and, with this milestone announced only six months ago, we are delighted today to be able to declare a non-routine interim dividend of $15 million in recognition sparkling results delivered for the first six months of 2022,” Gilbertson said in the company’s earnings notes released today.
The company announced a first dividend totaling $20 million in March.
Gemfields previously said in a trading update that it expects taxed profits to double. He today detailed a 50% increase in earnings and overall earnings for the six months ended June of three US cents per share.
The declaration of dividend is equivalent to a payment of approximately 1.3 US cents per share. Shares of the company, which mines and trades emeralds and rubies, closed down 7.5% in Johannesburg on Wednesday.
Intermediate figures were achieved thanks to a return to Gemfields’ normal auction schedule during which sales figures broke records. As a result, free cash flow before working capital was $86.5 million for the six months. Gemfields ended with a gross debt balance of $29.7 million as of June 30.
Commenting in its chairman’s statement, Martin Tolcher said Gemfields had received notice of a claim for damages up to £400,000 on behalf of 29 people linked to the group’s Kagem emerald mine in Zambia. Further claims on behalf of 69 other people were also expected, he said.
“We reaffirm that Gemfields and Kagem take allegations of this nature very seriously. The companies involved are working with outside attorneys and will continue to defend themselves strongly,” Tolcher said.
Following a process of unbundling an associated company, Sedibelo Platinum Mines, Gemfields now holds a direct 6.54% of the company, renamed Sedibelo Resources. Tolcher said the “short-term strategy” was an orderly sale of his stake most likely when Sedibelo Resources lists this year – which is believed to be the strategy.
Commenting on the group’s outlook, Tolcher said the record first-half sales were unlikely to be repeated in the current six-month period. However, he said Gemfields intended to stick to discretionary dividend payments, although he flagged the impact of cost inflation on consumables, particularly fuel.