Investors in Sepura – which makes digital radios for such customers as the emergency services and the military – may be intrigued by news that non-executive director Sion Kearsey sold 1m of the group’s shares, worth £300,000, this month.
The sale, however, was part of a plan by four of the principal shareholders – John Drinkwater, Jonathan Green, Sion Kearsey and Michael Sherwood – to sell 10.78m shares in order to “aid liquidity and broaden the shareholder base”, following “substantial” demand from institutional shareholders.
And why the demand? Well, Sepura isn’t doing at all badly. A trading update this month revealed that demand is proving resilient with, for example, an order in place for 1,800 of its ATEX radios from a single customer in the oil and gas sector. Meanwhile, the full-year figures revealed that pre-tax profits had soared 66 per cent in the year to end-March 2012 to €4.58m (£3.6m) – with broker Peel Hunt forecasting that cash profits will rise 32 per cent in 2013 and 16 per cent in 2014. The share price has risen over 60 per cent since the start of the year, to 76p, and the pace of progress suggests that there’s more upside to come.
Gillies grabs the opportunity to buy
Crawford Gillies followed his appointment to the Mitie board as non-executive director on the 12 July with a purchase of 10,000 shares less than a week later. It won’t have required much experience gained from his 25-year career with management consultancy Bain & Company to notice the record order book, which stands at some £8.6bn, and the improving group operating margins, up from 5.5 per cent to 5.6 per cent in the half-year results.
With the UK public and private sector strapped for cash and Mitie well placed to offer facilities management and energy services’ cost savings the group is well placed to benefit from the next wave of outsourcing. The share price at 267p, is up 37 per cent on our buy advice (195p, 7 April 2011), yet it is still not expensive, trading is in line with sector peers on 11.5 times forecast earnings. Given the strong dividend growth and high earnings visibility, Mitie is perfectly placed for these times of austerity. We retain our buy advice as we like the 3.5 per cent dividend yield and recommend following Mr Gillies lead.
John Ficenec
Director buys
| Company | Director | Date | No. of shares | Price (p) | Value (£) |
|---|---|---|---|---|---|
| CSF | Richard King | 24 Jul 12 | 55,000 | 44.75 | 24,613 |
| Cyan | John Cronin (ch) | 20 Jul 12 | 5,625,000 | 0.375 | 21,094 |
| Dods | Sir William Wells | 19 Jul 12 | 250,000 | 4.75 | 11,875 |
| ECR Minerals | Paul Johnson | 19 Jul 12 | 1,000,000 | 0.46 | 4,600 |
| ECR Minerals | Paul Johnson | 20 Jul 12 | 500,000 | 0.699 | 3,495 |
| ECR Minerals | Stephen Clayson (cfo) | 20 Jul 12 | 182,000 | 0.669 | 1,218 |
| Global Energy Development | Mikel Faulkner | 18 Jul 12 | 5,000 | 80 | 4,000 |
| Global Energy Development | Mikel Faulkner | 19 Jul 12 | 20,000 | 80 | 16,000 |
| Highway Capital | M Szytko | 20 Jul 12 | 95,141 | 0 | |
| LPA | Per Staehr | 18 Jul 12 | 10,500 | 57.8 | 6,069 |
| Mitie | Crawford Gillies | 18 Jul 12 | 10,000 | 267.27 | 26,727 |
| Nature | Darren Laguea | 20 Jul 12 | 210,514 | 32 | 67,364 |
| Optos | Dr Peter Kehoe | 20 Jul 12 | 2,000 | 184 | 3,680 |
| RedHot Media | Cheong Chia Chieh (md) | 18 Jul 12 | 100,000 | 20 | 20,000 |
| Rockhopper Exploration | Peter Dixon-Clarke (fd) | 18 Jul 12 | 12,484 | 198.25 | 24,750 |
| Rockhopper Exploration | Sam Moody | 18 Jul 12 | 7,490 | 198.25 | 14,849 |
| Rockhopper Exploration | Dave Bodecott | 18 Jul 12 | 14,982 | 198.25 | 29,702 |
| Snacktime | Jeremy Hamer (ch) | 18 Jul 12 | 80,000 | 30 | 24,000 |
| Standard Life Equity Income | Charles Wood | 23 Jul 12 | 3,000 | 269.25 | 8,078 |
| Tasty | Sam Kaye (j ceo) | 18 Jul 12 | 95,262 | 63.76 | 60,739 |
| Tasty | Adam Kaye | 18 Jul 12 | 95,262 | 63.76 | 60,739 |
| Throgmorton Trust | Jean Kemmis-Matterson | 19 Jul 12 | 12,000 | 175 | 21,000 |
| TR Property | Simon Marrison | 19 Jul 12 | 10,000 | 156 | 15,600 |
| World Trust Fund | Philip McLoughlin | 16 Jul 12 | 15,000 | US$2.82 | US$42,300 |
| Wynnstay Properties | Toby Parker (fd, cs) | 20 Jul 12 | 1,750 | 280.00 | 4,900 |
Director sells
| Company | Director | Date | No. of shares | Price (p) | Value (£) |
|---|---|---|---|---|---|
| Ruukki | Philip Baum | 19 Jul 12 | 150,000 | 55 | 82,500 |
| Sepura | Sion Kearsey | 18 Jul 12 | 1,000,000 | 69.86 | 698,600 |
| Tasty | Jonny Plant (j ceo) | 18 Jul 12 | 470,514 | 63.76 | 300,000 |
| Utilico Emerging | Charles Jillings | 18 Jul 12 | 400,000 | 164.25 | 657,000 |
| Utilico Emerging | Charles Jillings | 19 Jul 12 | 134,795 | 163.50 | 220,390 |
| Worldwide Healthcare | Samuel Isaly | 17 Jul 12 | 100,000 | 184 | 184,000 |
Table compiled by Robert Ansted.
Key to abbreviations: ch = chairman; ce = chief executive; cfo = chief financial officer; fd = finance director; coo = chief operating officer; cs =company secretary; md = managing director
