GEMFIELDS is to list its shares on London’s Alternative Investment Market (AIM) in an effort to win back investors some 18 months after the company was delisted from the City following its takeover by Pallinghurst Resources.
Pallinghurst Resources was consequently renamed Gemfields after a portfolio restructuring in which it established a focus on coloured gemstones. It was decided to keep Johannesburg as its only listing in order to reflect its African focus, according to CEO, Sean Gilbertson at the time.
Gemfields markets rubies and emeralds it mines from Zambia and Mozambique. However, it discovered that liquidity was low in Johannesburg as investors were not mandated to buy the shares. Analyst coverage was consequently lower than expected.
By March 2019, it was exploring re-listing in London, and in November it restructured its board – Sean’s father, Brian Gilbertson relinquished the chairmanship – in preparation for the return to the UK, planned for February 14. AIM’s authorities said the family ties linking the CEO and chairmanship roles represented a corporate governance risk.
Brian Gilbertson, who founded Pallinghurst, stepped down from all executive and non-executive duties in Gemfields.
Shares in the company gained 6% in Johannesburg today following the news, although the stock has been on an upward trajectory since the middle of last year. The stock is 10% higher on a 12-month basis.
“The AIM listing will provide Gemfields with access to much greater market liquidity, as well as a widening of the current investor base,” said Sean Gilbertson in a statement.
“The past decade has seen a consistent rise in the demand and price for precious coloured gemstones, and Gemfields has been at the forefront of driving that increased awareness, confidence and transparency in the sector from both the market and the consumer.”
Gemfields reported a decline in interim earnings in 2019 on lower revenues from its mines as well as Fabergé, the historic jeweller that Gemfields has used to market its coloured gemstone jewellery. Fabergé recorded revenues of $3.8m compared to $7m previously. The firm’s second half numbers will be assisted by the $31m consideration for selling in April its stake in Jupiter Mines, a steel feed company listed in Australia.
Gemfields also has an investment in Sedibelo Platinum Mines which has struggled to turn a profit in the past. It has significant platinum group metal resources, but it is now not a core investment for Gemfields which is trying to sell its investment.