Kenmare hopes FTSE listing will boost share price
DUBLIN-based mining company Kenmare Resources is to enter the FTSE 250 from the middle of this month, it was announced yesterday.
The move, which was expected, comes a fortnight after the company, whose main asset is a titanium mine in Mozambique, posted a $1.2m (€945,000) profit for the first half of the year, reversing a $200,000 loss in the same period in 2008.
The move onto the list of the 250 biggest companies on the London Stock Exchange is significant as it would force index tracker funds to buy the shares, potentially leading to a spike in the share price. Typically, tracker funds buy 10pc of a FTSE 250 company, according to the investment bank JP Morgan.
Kenmare, which had to change its primary listing from Dublin to London in order to be eligible for the 250, will formally join the index after close of business on Friday, September 17.
Michael Carvill, Kenmare's managing director, said, "We are delighted that the FTSE Nationality Committee deemed Kenmare eligible for FTSE Index inclusion and that we are now entering the FTSE 250. This is testament to all the hard work of everyone in the company. We believe that entering the FTSE 250 will broaden the range of potential investors."
Kenmare's finance director Tony McCluskey said being added to the index would allow the miner to grow its business.
"Not only is being added to the index prestigious but it also allows the company to broaden the shareholder base," he said.
"Joining the FTSE 250 allows us to grow the company. Investors who may not have looked at us before will more than likely take a closer look at us, now that we're on the index," he added.
"We've had a good year, and while we have been happy with posting a profit on turnover of $40m for the first half of the year, the key thing has been the increase in ilmenite production which was up 16pc in the first half of the year."
Ilmenite is a titanium-based mineral which is widely used in the production of paint, paper and plastics.
"That has been key for us and we are hoping to continue to grow that," he concluded.