Directors’ Dealings by Jenny Lowe

Directors appeared to be playing devil’s advocate over the past month. Instead of ‘selling in May’ – as the old saying goes – they were buying in their droves

One of the biggest deals in May occurred at Cove Energy, formerly Lapp Plats, where independent non-executive director Frank Moxon purchased 57,100 shares at a total cost of £29,977.50. On the same day, fellow non-exec Steve Staley spent £4,987.50 on 9,500 shares priced at 52.5p each. These buys came just days after the AIM-quoted company posted wider losses of $1.65 million for 2009, which reflected the funding of its so-far successful drilling programme.

Cove, with a new board and oil and gas exploration brief, transformed itself in 2009, acquiring proven
gas resources in Tanzania and an active ‘high-impact’ deepwater drilling campaign offshore Mozambique.

Buying into the brand
Elsewhere, another major transaction went through by directors of travel and leisure firm Global Brands, the exclusive franchisee for Domino’s Pizza across Switzerland, Luxembourg and Liechtenstein now led by a new management team.

Roberto Avondo, executive vice chairman at Global Brands, spent just under £25,000 in two separate transactions. The first saw him pick up 700,000 shares at 2.14p each, and the second was the purchase of 300,000 shares at 3p each. Non-executive director Bruce Vandenberg also splashed out on 700,000 shares at 2.14p in a transaction worth £15,000.

Global Brands, which has emerged from a very challenging 2009, remains an ambitious business, plotting to open a further five stores by the end of 2010 and, over the longer term, intending to expand the Domino's network to 50 stores in Switzerland – 20 company-owned stores and 30 sub-franchisees.

Meanwhile, directors have been out in force at AIM-traded betting firm Praesepe. Both the CEO, Nicholas Harding, and CFO, Matthew Proctor, spent £10,125 on 135,000 shares in the company, at 7.5p per share; and non-executive director Blair Sinton also clearly likes the story, having snapped up 62,000 shares in a transaction worth £4,848.40.

At the end of April, Praesepe reported a welcome narrowing of losses for 2009 to £700,000 from £1.6 million the year before, on sales increased from £4.5 million to £11.9 million. ‘We believe that revenue growth will be further underpinned by an increase in stakes on Category B3 machines later in 2010,’ enthused the company in its annual statement, ‘which will come as a result of the current review being undertaken by the Gambling Commission and the Department of Culture Media and Sport.’

Into insurance
In the insurance sector, Hampden Underwriting, which provides investors with a limited liability direct investment into the Lloyd’s insurance market, cheered investors by reporting an increase in net asset value and a swing from losses of £85,000 to pre-tax profits of £985,000 for 2009.

Following the results, non-executive director Jeremy Evans was keen to showcase his confidence in the business, boosting his holding by a further 6,000 shares to more than 51,000 in a transaction at 85p – roughly in line with the market price – worth £5,100 and increasing his stake to 0.69 per cent.

Elsewhere, shareholders in estate agent and late 2009 AIM issue M Winkworth were treated to strong financials for 2009, with pre-tax profits increasing by 31 per cent to £870,000 on sales up the best part of 15 per cent to £3.4 million.

CEO Dominic Agace clearly likes the momentum behind the business and has increased his holding, acquiring a further 12,000 shares at 82p in a move upping his interest to 4.5 per cent. He insists, ‘The prime property market remains extremely buoyant, with currency weakness attracting a steady stream of overseas buyers.

‘The increasing shortage in rental stock reflects a return to historic levels without significant upward price pressure.’