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After the strong share price rises at the end of last year, a clutch of canny directors embarked on their own version of the January sales, off-loading hefty chunks of shares and crystallising a host of in-the-money options.

The last 12 months have been pretty good for the UK's growth companies, with the SmallCap and Fledgling indices rising 11 per cent and 19.4 per cent respectively, and AIM finishing 20.4 per cent higher at 1,005.6 points

The gains of the past eight weeks or so have mostly come from a raft of stocks surging ever higher on the back of improved results and trading statements. As such, I expected to see directors continuing to sell significant blocks of shares in the early weeks of the New Year – and I was not disappointed.

Cool profits

Excellent full year results (to September), which saw pre-tax profits rise 33.6 per cent to £14 million, topped off an exemplary year for ice cream manufacturer Richmond Foods. Its shares excelled as a result, rising 48.5 per cent during the year to a high of 672.5p at the end of December. Both the chief executive James Lambert and finance director Andy Finneran took advantage of the gains by selling 338,000 shares at 600p between them in early December, netting a not-to-be-sniffed-at £1.7 million and £318,000 respectively.

Also taking advantage of a rising share price were chief executive Richard Atkinson and finance director Robert Baddeley of specialist holiday provider Holidaybreak. Poor trading had sent its shares as low as 465.5p in August, but recent reports of a sales upturn enabled the two to exercise shares at almost half the price they promptly sold them for. Atkinson gained £420,000 from selling 70,000 shares at 614p and Baddeley pocketed £182,000 after exercising options at a range of favourable prices.

Model behaviour

Over at models and collectibles group Hornby, finance director John Stansfield exercised 100,000 share options at 33p and proceeded to sell 75,000 shares at a more appetising price of 271p, making a gain of £179,000. This company has enjoyed improved profits of late and expanded its European interests by purchasing Spanish and Italian model train manufacturers Electrotren and Lima.

While the timing of Stansfield's sells are difficult to fault, the same couldn't be said of Philip Molloy at Mears, the local authority maintenance specialist. Molloy probably should have waited a little longer, in my opinion. before selling 450,000 shares in the company during December. Although he netted a substantial sum of £927,000, if he'd waited until the beginning of January, he could have picked up an extra 23p per share – a handy £103,500.

A few good buys

Amidst all the selling though, some directors were in a buying frame of mind, taking advantage of what they, no doubt, hoped would be bargain basement prices.

Bill Humphries, a director at Eastern European-focused oil and gas concern Regal Petroleum, recently purchased 100,000 shares at 356p. This compares to the 12-month high of 443.5p set in the summer of 2004 prior to set of interims that revealed a 78 per cent increase in pre-tax losses to £2.5 million. Humphries obviously believes there is much room for improvement. Following a momentary blip in the share price of Expro International, an oil field services company, at the beginning of 2005, chief executive Graeme Coutts snapped up 25,175 shares at 348p. The shares have already recovered to 359p. They could go higher.