Gemfields unveils bumper £63.1m sales as rubies prove recession resistant
Gemfields has announced a hefty hike in revenues at its latest ruby auction, with buyers embracing coloured gemstones as the market continues its post-Covid recovery.
The London-listed miner and auctioneer generated £63.1m ($80.4m) in sales from this month’s mixed-quality ruby auction, with 91 of the 94 lots up for sale being swept up by eager customers – up from £52.4m at its previous auction earlier this year.
One lot of 26.8kg remained unsold, which represented 30 per cent of the overall weight of the auction, leading to a record high average price of £201.69 per carat sold.
Adrian Banks, Gemfields’ managing director of product and sales, said: “The ruby market is clearly firing on all twelve cylinders and the step-change in market pricing which we reported in 2022 is notably enhanced.”
The latest windfall follows last month’s bumper auction of Zambian emeralds, where Gemfields raised £34.3m from 35 lots.
It has overseen 19 auctions since June 2014, generating £767.7m in total revenues, with the firm’s market cap rising to £202.2m with a net cash total of £92.58m.
Gemfields is one of the world’s biggest vendors of rubies and emeralds, and it has managed to maintain robust prices even amid gloomy economic data to the limited global supply.
Its chief market is wealthy customers from across the world seeking luxury items and assets, a buyers market shielded from economic headwinds.
Gemfield’s latest auction ruby lots were made available in Bangkok, Thailand, for private, in-person viewings by customers before an online auction platform allowed buyers from across the world to take part over 15 days earlier this month.
Rubies remain ‘recession resistant’
The company’s boss Sean Gilbertson told City A.M. last year he considered gemstones to be “resistant” to inflation and the worsening cost of living crisis.
Gemfields auctions rubies extracted from Mozambique through mining company Montepuez Ruby Mining Limitada.
It has a 75 per cent stake in the company, with Mozambican partner Mwiriti Limitada holding the remaining 25 per cent offering in the company.
The proceeds of this auction are returned to MRM in Mozambique, with all royalties due to the Mozimbican government being paid on the sales price achieved at the auction.
Its latest sets of results reflect a sharp upturn in Gemfields’ performance following the pandemic, which posed severe existential challenges when the company was unable to host auctions where investors could inspect the gemstones.
The company suffered a sharp drop in revenue during the pandemic, falling from £169.5m in 2019 to £26.7m the following year – but sales rebounded to £246.4m in 2022 as pandemic restrictions fell away.
Investment analyst Liberum has maintained a buy stance towards the company with a target price of 27p per share, putting the “company in a strong financial position” for interims to pay dividends.
Shares in the company are down 0.6 per cent on the London Stock Exchange, trading at 16.5p per share in this afternoon’s session.
