Executive Decisions, by Oliver Haill

London’s fledgling green energy producers are making such solid progress that their executives have been able to pocket tidy profits from the growing demand for their shares.

John Kennair, chairman of Romag, the firm that has developed and manufactures photo-voltaic glass (it creates electricity from sunlight), saw his company increase interim pre-tax profits 37 per cent to £429,000 million for the period to March. This bred much interest in the Square Mile and a few weeks back Kennair sold almost a third of his holding in Romag (for £3.7 million at 77p) in order to ‘meet institutional demand and provide increased liquidity in the shares’. The sale has left him with 25 per cent of the company.

In the month since his trade, the shares have gained 34 per cent to 103.5p. This strengthening means that the 10.6 million shares he has left have jumped in value from £8.2 million to £11.9 million – delivering another (hypothetical) £3.7 million for the canny Kennair.

Dr George Taylor, chief executive of Ocean Power Technologies (OPT), is another at the helm of a green counter with keen institutional appeal. He sold £375,000 worth of stock at 75p ‘in order to satisfy market demand’, leaving him with a residual 17 per cent. Taylor’s sale helped wash the shares up eight per cent to 81p, meaning his remaining stake has increased in value by £514,000.

For those who aren’t aware, OPT has developed a device called a PowerBuoy that generates electricity from marine waves. It floated on AIM in October 2003, raising an impressive £22.4 million at 125p – a considerable premium of course to the price at which Taylor sold. Taylor and finance director Charles Dunleavy have also been given options over 135,000 shares each exercisable at a US dollar price equivalent (at the current exchange rate) to 75p.

Supportive buying
Away from the energy world, I have been intrigued lately by the actions of three AIM executives who all picked up shares at seemingly cut-price levels following profit warnings from their companies.

Printing services provider TripleArc (incidentally, a previous GCI Recommendation) fell to relatively low levels following its recent warning that upcoming figures will be ‘significantly’ below forecasts. This depressing news didn’t prevent sales director Nick Haigh purchasing 800,000 shares at 7p, spending £56,000 in the process. Haigh obviously feels TripleArc’s shares (which were trading at 18p in June) represent something of a bargain at current levels, although I’m not so sure.

David Williams, non-executive chairman of toxic-waste handler Augean, spent £148,000 at a profit-warning-hit price of 148p. Floated as a shell last autumn, the shares hit a peak of 270p in March but plunged after the warning. Since Williams’ trade they have nudged up to 169p and, given this group’s strategic goals, could go higher.

The last of my trio of bargain hunters is Bruno Brookes, the founder and chief executive of Immedia Broadcasting. In July he bought 50,000 at 21p for a cost of £10,500. Brookes’ market dabblings helped the shares recover 15 per cent after Immedia’s depressing profits alert. However, Immedia is still loss making, is operating in a very difficult sector and needs to move towards break-even as soon as possible. I’d advise you not to follow his lead.