Gemfields (GEM) : Corp

Excellent progress in 2019. 2020 more uncertain…

Key data

  • Share price (p) 8.5
  • Target price (p) U/R
  • Market cap (£m) 107.7
  • Enterprise value (£m) 45.3

Gemfields has released a positive trading statement for the year to 31 December 2019 ahead of releasing its full audited financial statements for the same period on 27 March 2020. Alongside the 2019 trading statement the company has also provided an update with regards to the impact the pandemic is expected to have on financial performance in 2020. Like many companies, the outlook is far from certain and as it is not able to provide accurate guidance at this time, we have withdrawn forecasts for FY 2020 and FY 2021, although we note that the company’s strong cash position gives it more breathing room than most.

Martin Potts 020 7220 0544

K3 Capital (K3C) : Corp

Positioning to take advantage of future opportunities

Key data

  • Share price (p) 136.5
  • Target price (p) U/R
  • Market cap (£m) 57.6
  • Enterprise value (£m) 51.9

Trading update as a result of the COVID-19 situation results in what we see as an absolute worst-case scenario in 2020E (to May) of Revenue pulling back from £18.4m to £15.1m (-£3.3m) and EBITDA moving down from £7.5m to £6.8m (-£0.7m) for an EBITDA margin of 45%, up from our previously estimated 41%. No debt, £7m of bank reserves and a highly experienced CEO suggest to us that not only will K3 survive this tough period, it will emerge stronger and better able to capitalise on an environment where competitors may no longer be in the picture.

Nik Lysiuk 020 7220 0546

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