Directors’ Dealings by David Russell

Depleted company valuations have recently compelled a number of seasoned, entrepreneurial chairmen to buy shares in their own businesses.

Among them was David Elstein, a media sector veteran and non-executive chairman of AIM-traded DCD Media, which has seen its market value fall by two-thirds to less than £18 million since last May, despite a strong trading performance and three acquisitions that have propelled the company into the UK’s top ten independent production ventures.

Displaying his faith in the company, Elstein purchased 750,000 shares in DCD at 31p, for an outlay of £232,500, bringing his holding to 3.03 per cent. Elstein, on the board of cable giant NTL and chairing several other media concerns, boasts good value creation credentials – he was chairman of Sparrowhawk Media, which was recently acquired by NBC Universal for a bumper £175 million.

As for DCD, currently priced at 33.5p, its half-year results to December showed good revenue growth to £18.1 million (2006: £13.1m) and pre-tax profits of £250,000 in the seasonally quieter half. With the busier second half shaping up, analysts are looking for a full-year profit of £1.5 million. Revenue growth is being driven in particular by its US division, Done & Dusted, which obtained a Grammy nomination during 2007 and is expected to push further in the right direction as acquisitions come on stream.

Dowler buys into Baobab
Directors of Mozambique-focused mining outfit Baobab Resources, searching for gold, silver and copper and currently valued at £9.4 million at 14.5p per share, recently filled their boots following price weakness that saw the shares subside to 9.13p.

The issuing of positive drilling results at the group’s main Mundonguara site prompted non-executive chairman Jeremy Dowler’s purchase of 200,000 shares just above this level at 9.8p, increasing his holding to eight per cent. The company’s market relations manager, Jon Crowe, also acquired shares in tranches of 50,000 and 10,000, at 9.25p and 9.5p respectively and through his Millridge vehicle, increasing his overall ‘beneficial interest’ in the business to 11.2 per cent.

Kellan duo acquire
John Bowmer and Tony Reeves, co-chairmen of recruitment group Kellan (formerly Berkeley Scott), have increased their respective stakes in the £17.6 million AIM-listed business to 10.68 per cent each. This they did through the acquisition of 500,000 shares each in the company at 20p – around the current 20.25p market price – taking their stakes to 10.68 per cent apiece.

The move was preceded a month earlier by finance director Will Coker, who acquired 21,000 shares at 20.625p, shortly after the release of preliminary figures to December demonstrating that a turnaround was well under way.

Sellers at James Halstead
There have also been sellers in the market recently, with two directors of flooring specialist James Halstead realising £416,172 between them by selling 74,986 shares at 555p. The sales followed the exercising of options at prices between 221p and 256.25p, with chief executive Mark Halstead selling 44,986 shares and finance director Gordon Oliver selling 30,000 shares, booking handsome profits in the process.

These disposals came hot on the heels of strong interim figures from the company, which showed pre-tax profits increased by more than 16 per cent to a record £13.1 million and the half-time dividend lifted by almost 20 per cent to a record 6.25p.