March 2025

Kenmare Resources PLC (KMR) is a mining company headquartered in Dublin, Ireland. The company is one of the world's largest producers of titanium minerals, specifically ilmenite and rutile, which are used in various industrial applications, including paints, plastics, and the production of titanium metal.

The company focuses on the exploration, mining, processing, and marketing of these mineral sands. The company has been involved in the mineral sands industry for several decades and is known for its environmentally responsible mining practices.


Reinvestment in Kenmare Resources PLC


Kenmare Resources PLC (LSE: KMR, ISE: KMR) is a leading global producer of titanium minerals and zircon, operating the Moma Titanium Minerals Mine in Mozambique. With a solid financial position, robust production performance, and a strong commitment to shareholder returns, Kenmare presents an attractive reinvestment opportunity this month.


1. Strong Financial and Operational Performance


Despite a downturn in share price since we last bought in, Kenmare has delivered impressive results in 2024, exceeding key production targets:


  • Ilmenite production grew by 2.3% year-on-year to 1.0 million tonnes, within the guidance range of 950,000–1.1 million tonnes.
  • Primary zircon production of 50,500 tonnes exceeded the upper end of guidance (45,000–50,000 tonnes).
  • Rutile production saw a 17% increase year-on-year to 9,800 tonnes, surpassing its guidance range.
  • Shipments of finished products grew by 4%, indicating strong market demand.
  • Safety milestone: The company recorded two million hours worked without a lost time injury, highlighting operational excellence.


Kenmare expects continued strong demand for its products, with 2025 sales forecasted to exceed production.


2. Attractive Shareholder Returns


Kenmare maintains a commitment to returning capital to investors:


  • £48 million in dividends paid in 2024, reflecting strong free cash flow generation.
  • Full-year dividend expected at the upper end of its 20–40% profit-after-tax payout policy.
  • In 2023, the company paid 56.04p per share in dividends, showcasing a history of generous distributions.


3. Financial Strength and Growth Investment


Kenmare continues to invest in strategic growth while maintaining financial discipline:


  • £140 million invested in capital programmes in 2024, primarily for the upgrade and transition of the company’s largest mining plant to Nataka.
  • 2025 capital expenditure forecast at £155 million, supporting long-term growth and operational efficiency.
  • Net debt of £24.8 million, reflecting investment in development projects while maintaining a stable balance sheet.


4. Positive Market Outlook


Kenmare benefits from continued strong demand for titanium feedstocks and zircon:


  • The company’s products are essential for industries including ceramics, pigments, and aerospace.
  • Shipments in 2024 increased by 4%, with H2 significantly stronger than H1, signalling growing market demand.
  • 2025 production guidance for ilmenite is set between 930,000 and 1,050,000 tonnes, aligning with ongoing demand trends.


Risks to Consider


While Kenmare offers strong investment potential, we need to stay aware of key risks:


  • Commodity price fluctuations may impact revenue and profitability.
  • Regulatory developments in Mozambique could affect operations, though the company maintains strong government relations.
  • Capital expenditure projects require continued financial discipline to ensure long-term shareholder value.


Conclusion


With a strong financial performance, robust dividend policy, and strategic investments in future growth, Kenmare Resources PLC presents a compelling case for reinvestment. The company’s disciplined capital allocation, increasing production, and market demand strength make it an attractive opportunity for investors seeking stability and growth.


We will be adding Kenmare Resources PLC to our portfolio this week.

RETURNS TABLE  

Month Company Ticker Symbol Purchase Date Current Stock Price (p) Dividend Yield To Date (%) Re-Invested (£) Regular Monthly Investment (£) Purchase Price (p) Sold? Dividend Income (£) Growth with Dividends Growth without Dividends
February 2023 Cranswick PLC CWK 06/02/23 3569.00 1.79% £0.00 £2,118.78 3082.00 Yes £37.93 17.6% 15.8%
March 2023 Avingtrans PLC AVG 06/03/23 387.50 1.02% £0.00 £2,805.08 435.00 No £28.71 -9.9% -10.9%
April 2023 Vesuvius PLC VSVS 03/04/23 472.83 5.48% £0.00 £1,465.86 410.00 Yes £80.35 20.8% 15.3%
May 2023 Tyman PLC TYMN 02/05/23 296.00 1.73% £0.00 £1,212.35 249.19 No £20.96 20.5% 18.8%
June 2023 PayPoint PLC PAY 05/06/23 541.75 6.67% £0.00 £1,460.29 407.14 Yes £97.42 39.7% 33.1%
July 2023 Pan African Resources PLC PAF 03/07/23 22.35 2.57% £0.00 £1,255.45 12.88 No £32.23 76.1% 73.5%
August 2023 Hikma Pharmaceuticals PLC HIK 01/08/23 1863.00 0.00% £0.00 £879.21 2089.00 No £0.00 -10.8% -10.8%
September 2023 Castings PLC CGS 04/09/23 329.00 1.20% £6,268.97 £889.28 343.63 No £86.03 -3.1% -4.3%
October 2023 Kenmare Resources PLC KMR 02/10/23 355.00 0.00% £4,128.93 £1,086.90 416.00 No £0.00 -14.7% -14.7%
November 2023 Pets at Home PLC PETS 06/11/23 270.00 1.52% £2,904.50 £0.00 299.00 No £44.26 -8.2% -9.7%
December 2023 Serco Group PLC SRP 04/12/23 186.40 0.00% £3,517.95 £677.78 158.76 No £0.00 17.4% 17.4%
January 2024 Avingtrans PLC AVG 08/01/24 387.50 0.00% £0.00 £2,335.92 392.00 No £0.00 -1.1% -1.1%
February 2024 Future PLC FUTR 05/02/24 697.00 0.00% £0.00 £1,494.79 716.12 No £0.00 -2.7% -2.7%
March 2024 Morgan Sindall Group PLC MGNS 04/03/24 2270.00 0.00% £1,446.59 £1,045.43 2307.43 No £0.00 -1.6% -1.6%

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