Gem Diamonds (LON: GEMD), which owns 70% of the Letšeng diamond mine in Lesotho, swung back to profit in the first half of 2026, a turnaround the market had not priced in after a torrid 2025.
Shares in the small-cap miner surged from Wednesday’s close of 6.25p to a last price of 10.45p earlier today, a rise of roughly 67%, having touched an intraday high of 11p after the results were published at 6am. The move reflects a market that had been braced for continued balance-sheet stress ahead of December’s debt facility expiry.
The 2025 financial year had ended with a $104m loss and a writedown at Letšeng, leaving the market wary heading into today’s release. Revenue for the first half of 2026 rose 32% to $59.7m from $45.4m a year earlier, while underlying EBITDA, earnings before interest, tax, depreciation and amortisation, flipped to a positive $8.6m from negative $2.6m in H1 2025.
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The company swung to an attributable profit of $0.6m, against an $11.7m loss a year earlier. The improvement was driven by a higher average price per carat of $1,395, up from $1,008, even as carats sold slipped slightly to 42,624 from 44,360, alongside savings from the Business Resilience Programme launched in July 2025.
Net debt collapsed to just $0.5m at the end of June from $20.1m at the end of 2025, while cash on hand rose to $20.2m from $3.8m, transforming the liquidity picture that had worried the market. Chief executive Clifford Elphick said: “We are pleased to report a significantly improved financial performance in H1 2026 compared to the same period last year. Revenue increased by 32%, supported by improved production quality and stronger prices achieved.”
The company also recovered a 346.99 carat white diamond in June, named the Lesotho Jubilee, which will be sold after the period end. Despite the turnaround, Gem Diamonds still flags refinancing of its roughly $102.1m credit facilities, of which $20.7m is drawn, expiring in December, as a material uncertainty for its status as a going concern.
