Companies: AIP    BNB    FCCN    GRG    KUJ    MKS   

As smaller retail stocks continue to outperform their larger peers, a raft of directors here have been selling down their stakes. This contrasts starkly with activity amongst struggling ventures, where some bosses have had to dig deep

After scouring the results and trading statements of larger retailers such as Marks & Spencer during April, I can understand why there has been little trading by directors in this sector during the month. Quite simply, dire results and a depressed outlook have punished prices.

But a few lucky directors have managed to cash in on positive financials. For instance, I spied that French Connection's operating director Neil Williams exercised 75,000 shares at 106p and promptly sold them at 470p, enjoying a £273,000 profit thanks largely to the fashion retailer's outstanding results. These saw pre-tax profits jump 28 per cent to £38.7m.

Also taking advantage of a rising share price following good results was Ian Gregg, son of the founder and currently a director of mega baker Greggs. He sold 50,000 shares at 3401p (they had traded at 3230p prior to the announcement), netting a whopping £1.7 million.

One big gain...

One of the biggest gainers of the past four months though was in a distinctly different area. The person was Tony Mack, chairman of chartered air broker Air Partner. With pre-tax profits for the interim soaring 140 per cent to £1.2 million and a royal warrant to supply aircraft charter to Her Majesty the Queen in the bag, Air Partner shares have risen 91 per cent in the past year. Mack recently sold 1.5 million shares at 420p, raking in a cool £6.3 million.

...and a few large strains

But what has really captured my interest this month is the activity of directors whose loss-making companies have been busy fundraising.

Now, it is fairly common for directors to subscribe for shares when a company raises funds, but I have to say the activities of the directors of recruitment services group BNB Resources are particularly impressive.

Having bought Garfield Robbins last September, BNB continued its acquisitive policy by purchasing the Apollo Group for £4.5 million in April. In order to fulfil the acquisition, it placed over 88 million shares at 12.5p, raising £11 million before expenses (the initial consideration was £1.2 million, with 2.4 million shares allocated to Apollo, the rest to be used for working capital and to strengthen the balance sheet). The directors and their associate companies snapped up 48.1 million of the shares on offer for £6 million.

Not satisfied with that, the directors, including chairman Julian Treger, chief executive Simon Grinstead and Rod Macleod, who incidentally owned 50 per cent of Apollo, have spent a further £177,814 on 1.1 million shares. BNB reported a pre-tax loss of £6.2 million (£4.5 million) for 2003, but since announcing its results, the share price has increased 43 per cent to its current price of 19p.

The directors of beleagured interactive games software developer Kuju have dipped into their pockets in order to help the company raise £800,000 before expenses. Issuing 7.3 million shares, which represents 46.4 per cent of the company's total issued share capital, at 11p (a 57 per cent discount to its share price in early March) managing director Jonathan Newth and his fellow directors bought over one million shares for £113,000.

Kuju went into the red during the interim to September, reporting pre-tax losses of £1.5 million compared to last year's pre-tax profits of £66,480. It has restructured and closed its loss-making simulation division. Although it signed a couple of games development programme contracts since March, I can only speculate the loss of its contract with US interactive games developer and distributor THQ in February were responsible for the massive discount at which the shares were placed.