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LondonMetric chair sells £1.1m stake

Latest disposal continues an annual pattern
December 2, 2021
  • Patrick Vaughan top-slices holding at 271p
  • Market value of chairman’s holding still up over a decade

One of the past week’s largest director sell orders came from the brokerage account of Patrick Vaughan, non-executive chair of LondonMetric (LMP), who banked £1.1m from the sale of 400,000 shares on 23 November.

The sale followed a busy few days for the commercial landlord. On 18 November, LondonMetric posted an expectation-beating total accounting return of 14.5 per cent for the six months to September. On the same day, the Reit announced and completed a £175m share placing to help fund £282m-worth of property purchases.

That fundraising was struck at 260p. Although half-year results revealed a 12 per cent jump in net assets to 214.4p a share – thanks to strong rental income growth, canny capital recycling and swelling investor appetite for the warehouses and urban logistics assets LondonMetric specialises in – that still leaves the shares at a chunky premium to forecast book value growth.

Might Vaughan have concluded the shares are overvalued?

Past trading activity suggests not. While the chairman has gradually trimmed his absolute holding by 44 per cent over the past decade, he still owns 10.3m shares after last week’s disposal. And while historic sales have netted around £13.8m gross, the market value of Vaughan’s stake has increased from £25m to £28m over the period, thanks to the 8.9 per cent average annual return for the shares, before dividends.

His recent share sales, which are understood to be to meet tax obligations, have also consistently occurred at the end or slightly after each calendar year end. A LondonMetric spokesperson declined to comment.

At 274p, the premium to book value (and smaller peers like Urban Logistics (SHED) and Warehouse Reit (WHR)) has started to widen, but investors should weigh Vaughan’s disposal against the £175m of investor capital that just poured in. Prospects remain bright, though fairly priced. Hold. AN

The pandemic accelerated companies’ need for digital capabilities, which has been a boon for  digital transformation consultant Kin and Carta. The potential to profit from companies' digital drives led to the company selling off all of its non-core assets to focus solely on helping them.

Since August last year, Kin and Carta has sold almost all non-core businesses, along with three of its subsidiaries, for a combined £30.6m. The remaining core has performed well, with revenue from continuing operations increasing 13 per cent to £141m, while pre-tax profit jumped 61 per cent to £13m during the 12 months to 31 July.

The group added 11 new clients through the period, with the effect that it now boasts 30 clients that each spend upwards of £1m a year on its services. Significant clients include the UK government’s Home Office, Santander and The Economist. Kin and Carta’s biggest issue is a lack of talented workers to tackle its record pipeline of £135m.

On the back of these promising results published at the end of October, the share price initially jumped 25 per cent.

This bullish rise was short-lived, though, as on 23 November Marie James Capital, a private holding company for CEO John James Schwan III, announced its intention to sell £15.05m worth of shares – approximately 2.9 per cent of the company’s issued capital.

The announcement said the “sale has been made as a prudent diversification of Mr Schwan's children's estate”. However, this reassurance did little to assuage the market, with the share price dropping 6 per cent in subsequent days.

Given that Kin and Carta is trading at a pricey forward PEratio of 41, any sniff of trouble was always going to have an impact on the share price. Mr Schwan's estate's diversification plan provided just enough bad news to have that effect. AS

 

Buys    
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)
Anglo Asian MiningKhosrow Zamani (ch)17-19 Nov 2111746,213
Anglo Asian MiningJohn Monhemius23 Nov 2111328,225
Bank of GeorgiaAlasdair Breach *17-19 Nov 211,633447,141
Aston Martin LagondaAnne Stevens23 Nov 211,581110,670
AvivaMartin Strobel24 Nov 21394157,760
Bank of IrelandIan Buchanan22 Nov 2142121,047
CarcloNick Sanders (ch)23 Nov 213949,552
CheckitKeith Daley (ch) **26 Nov 21462,800,000
CheckitKit Kyte (ce) **26 Nov 214650,000
CheckitGreg Price (cfo) **26 Nov 214625,001
CheckitJohn Wilson **26 Nov 2146100,000
CheckitSimon Greenman **26 Nov 214625,000
CheckitWilliam Maunder-Taylor (PDMR) **26 Nov 214620,700
Coats GroupJacqueline Callaway (cfo)25 Nov 216549,552
CranswickAdam Hartley Couch (ce)24 Nov 213,54749,739
CVSRichard Connell (ch)25 Nov 212,20292,500
EnQuestAmjad Bseisu (ce) *18-23 Nov 2119706,772
EurowagPaul Manduca (ch)23 Nov 2112030,025
GenusIain Ferguson (ch) *24 Nov 214,480224,016
GenusStephen Wilson (ce) *24 Nov 214,71194,227
GlaxoSmithKlineDr H Barron (PDMR)22 Nov 213,102 (ADRs) †37,560 †
Greatland GoldShaun Day (ce) **24 Nov 211554,375
Harbour EnergyAnne Stevens22 Nov 21400120,016
Hill & SmithAlan Giddins (ch)25 Nov 211,74436,975
Literacy CapitalJeroen Sibia (PDMR)19 Nov 2131024,003
M&GMassimo Tosato18 Nov 21200199,940
Merit GroupDavid Beck (ce)18 Nov 215138,500
MJ HudsonMatthew Hudson (ce)25 Nov 214748,750
MJ HudsonGeoff Miller25 Nov 214726,814
musicMagpieMartin Hellawell (ch)24 Nov 2117074,990
NB Private Equity PartnersWilken von Hodenberg *23 Nov 211,818299,068
NB Private Equity PartnersWilliam Maltby (ch) *24 Nov 211,82599,744
PayPointNick Wiles (ce)26 Nov 2161761,679
Petershill PartnersNaguib Kheraj (ch)25 Nov 21307230,250
RecordKrystyna Nowak24 Nov 218324,574
Royal MailSimon Thompson (ce)18 Nov 2147298,631
Royal MailMark Amsden (PDMR) *18 Nov 2146399,252
RyanairGeoff Doherty19 Nov 211,329 †39,870 †
Seeing Machines Kate Hill (ch)25 Nov 211227,599
Triad GroupJames McDonald (cfo)19 Nov 2112534,500
Van ElleMark Cutler (ce) *19 Nov 2146161,000
Virgin MoneyDavid Duffy (ce)26 Nov 2116862,986
Virgin MoneyClifford Abrahams (cfo)25-26 Nov 21172103,290
WH SmithNicky Dulieu25 Nov 211,53238,300

 

Sells    
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)
Atalaya MiningHarry Liu19 Nov 2140624,360
Cake Box HoldingsSukh Chamdal (ce) *25 Nov 2135010,500,000
CerillionMark Nicholls (coo) *24-25 Nov 21836117,010
CranswickChristopher Aldersley (coo)23 Nov 213,660218,392
Croda InternationalTom Brophy (PDMR)22 Nov 2110,099201,986
Kin and Carta J Schwan**24 Nov 2130115,050,000
LondonMetric PropertyPatrick Vaughan (ch)23 Nov 212711,084,000
National GridDavid Wright (PDMR)22 Nov 21984137,719
TBC Bank GroupNino Masurashvili (PDMR)18 Nov 211,60080,000
TBC Bank GroupNikoloz Kurdiani (PDMR)25 Nov 211,556112,670
*Spouse/Family/Close Associate. ** Placing / Subscription / Open Offer  † Converted from € / $