IT WAS an upbeat gathering for Kenmare Resources shareholders yesterday as the company outlined its progress in 2010 and laid down plans for the coming year.
The company is aiming to pay off some of its debt as revenues rise amid an upturn in its main markets. Investors have been waiting for the company to begin paying dividends, and with Kenmare reporting a revenue rise of more than 50 per cent to $92 million last year, shareholders are optimistic they may soon see some return on their investment.
“There’s one thing that I think is in all of our shareholders’ interests for us to do and that is . . . about $80 million of our subordinated debt, we can pay off without incurring a penalty,” said managing director Michael Carvill, adding he thought it would be a good use of funds to pay at least part of Kenmare’s debt.
However, he didn’t rule out the idea that investors would see some return. “From that point onwards, it becomes a decision for the board and the shareholders to decide how they want to deal with those funds. From the middle or end of next year my view is that we’ll have money that we’ll have to decide how to apportion.”
Earlier this year, Kenmare reported a loss of $16.3 million for 2010, narrowing its losses from $30.4 million recorded in 2009.
The company was positive as it presented its annual report at the AGM yesterday, in anticipation of benefiting from a stronger market for its products and reaping the benefits of expanding its activities. Kenmare is a leading producer of titanium feedstock, which is used in paints, pigments and cement.
The company is hoping to reap the full benefits of the upturn in the titanium feedstock market, where prices have increased substantially in recent months.
Kenmare has successfully negotiated “significant” prices increases with customers for 2011. Increased demand is expected to fuel further price rises in feedstocks, from which the company will benefit when it enters new sales agreements.
The presence of Charles Carvill yesterday as chairman may have come as a surprise to some of those there. Kenmare has been searching for a replacement after Mr Carvill announced his intention to step down. Michael Carvill told the AGM that the search for a successor to Charles was ongoing, and it was hoped to resolve the issue soon, with some promising candidates under scrutiny.
