Gemfields profit drops despite rising revenue

Gemfields, which provides ethically-sourced rare-coloured gemstones, posted a drop in pre-tax profit in the full year as costs rose and the margin was squeezed, even as revenue and production grew.

For the year ended 30 June 2015, pre-tax profit came in at $12.3m from $16.3 last year, as selling, general and administrative expenses rose to $55.3m from $48.1m.

Revenue increased to $171.4m from $160.1m, underpinned by record-breaking auction results, a significant uplift in gemstone production and further expansion projects coming online.

Gemfields said demand for its responsibly-sourced coloured gemstones remains high, noting that the six auctions it hosted in this financial year, three of emeralds and three of rubies, have yielded aggregate revenues of $153m.

Chief executive officer Ian Harebottle said: “I am pleased to present yet another strong year of growth and performance for Gemfields in which we have achieved record revenues and met or exceeded production guidance at each of our Kagem emerald and Montepuez ruby operations.

“Global appreciation and demand for coloured gemstone continues to increase at a steady pace, our pipeline of growth projects remains exceptionally strong and our recent move into Colombia reflects our commitment to maintaining our position as the market leader in the global coloured gemstone sector."

At 1313 BST, Gemfields shares were down 4.6% at 56.75p.