Kenmare up after dividend pledge
SHARES in rare-earths miner Kenmare Resources surged yesterday after the company laid the groundwork to pay a dividend for the first time.
The firm, which is focused mostly on an illmenite mine in Mozambique, said it was now "focused on getting to a position where our net cash inflows from operations will enable us to start paying dividends to our shareholders at prudent levels".
To do that, the company must first pay back just under $100m (€75m) worth of debt, something it is working to do "as soon as possible".
Talk of a dividend came even as Kenmare released annual results that missed most analysts' expectations as costs increased. Profits after tax more than doubled to $49.5m on revenue that rose more than 40pc to $234.6m.
Company chairman Justin Loasby said 2013 would be a "watershed" year for Kenmare.
Despite the miss analysts were broadly positive. "Kenmare's investment reputation is predicated . . . on the expanded Moma mine to start generating significant free cash flow from 2014," said RBC.
"Our figures suggest this will be the case though clearly there is something of a 'Show me the Money' requirement for the share to be accorded a higher rating," the firm added.
By the close shares in Dublin were up 9.5pc at 39c.