29th Nov 2019 13:39
(Alliance News) - Gem Diamonds Ltd said Friday it has sought to engage shareholders after a significant minority voted against the re-election of Harry Kenyon-Slaney Clifford Elphick to the company's board.
"We understand that the significant votes received against the two directors, principally related to the board's approach on share buybacks, dividends and board composition," the company said.
Gem Diamonds continued: "Through discussions the reasoning behind the board's decision not to currently recommend a share buyback programme or payment of dividend were clarified. As stated in the half year review issued in September 2019, the company's dividend policy is dependent on the results of the group's operations, its financial condition, cash requirements, future prospects, profits available for distribution and other factors deemed to be relevant at that time."
The company stressed it needs to maintain its "appropriate" levels of cash due to the position of the diamond market. Gem Diamonds also noted its dividend policy will be regularly reviewed.
Gem, which owns 70% of Lesotho's Letseng mine, recovered 56,668 carats in the six months to June, 8.0% lower than the year before. The average price tumbled 38% year-on-year to USD1,697 per carat, but prices were 10% higher than the second half of 2018.
Gem's revenue fell 45% to USD91.3 million, with pretax profit slumping 72% to USD18.7 million.
Shares in Gem Diamonds were 4.5% lower in London on Friday at 54.80 pence each.
By Paul McGowan; [email protected]
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