Insider: a big AIM purchase and bigger tech sale

As markets rally then turn lower, we look at some of the most interesting director deals in recent days.

The chairman of former Woodford stock Benchmark Holdings (LSE:BMK) has backed up his appointment of a new CEO by buying another £200,000 of shares in the fish health and genetics business.

Peter George, who is best known for turning AIM-listed pharmaceuticals stock Clinigen Group (LSE:CLIN) into a near-£1 billion company, bought the shares in the week that Trond Williksen took the helm.

He will hope that Williksen, who previously ran Norwegian fish farm company SalMar, can step up the company's recovery from a profits warning in August, when shares slumped 30% in challenging conditions for the shrimp and Mediterranean seabass and bream markets.

A month before that warning, embattled stock picker Neil Woodford sold the majority of a 12.5% stake to Norwegian investor Kverva Finan in order to raise an estimated £24 million in the days after the suspension of his Equity Income Fund.

Woodford also dumped shares the previous December, having originally held a 20% stake when Sheffield-based Benchmark listed on AIM in November 2013 with a value of £87.3 million. It was run at that time by Malcolm Pye, who co-founded Benchmark in 2000 and stayed until just after last summer's profits warning.

Source: TradingView. Past performance is not a guide to future performance.

It currently has operations in 27 countries and more than 1,000 staff, with the Advanced Nutrition arm producing and selling live feed to aid the development of shrimp and fish. The Genetics division is one of the world’s leading producers of salmon eggs, while the third Benchmark strand of Animal Health manufactures and sells sea lice treatments.

George knows the business well, having been its executive chairman for the nine months between Pye's departure and the arrival of Williksen. He has overseen the restructuring of the group, including its greater focus on core aquaculture disciplines and a switch from an R&D investment phase towards commercial execution.

This includes next year's planned launch of BMK08, which is the animal health division's treatment to combat sea lice, one of the main biological challenges in salmon farming. 

• Stock market rally poll: too much too soon, or only the start?
• Stock market slump: reality check after grim data
• Trading tips: how to play the recovery and mitigate risk

Presenting interim results in May, George said:

“Longer term the fundamentals of our business are very attractive with an increasing need for products and solutions that enable sustainable food production.”

His comments followed a 62% drop in underlying earnings to £2.8 million for the six months to 31 March, driven by the impact of weak shrimp markets and oversupply on the advanced nutrition division.

This was offset by significant margin improvement in genetics, helped by the ramp up of its salmon egg production facility in Salten, Norway following £40 million investment.

George, who became non-executive chairman in 2018, was a regular buyer of Benchmark shares during his period of full-time responsibilities, including the £470,000 he bought in September. This was followed by another £500,000 when the company raised £42 million from investors in a placing and open offer priced at 40p a share in February.

His latest purchase, which was disclosed to the market last week, was priced at 34p and is already showing a paper profit of £42,000 following a 21% rise for the share price to 41p. Non-executive director Yngve Myhre, who has 20 years’ experience in the aquaculture sector, also bought £68,200 worth of shares at a price of 34.1p.

Banking a profit on this tech star

In other deals last week, Kainos Group (LSE:KNOS) business development director Paul Gannon picked up £1 million from the sale of shares in the fast-growing IT services company. He is one of three senior directors - the others being CEO Brendan Mooney and chief financial officer Richard McCann - who have elected to take no salary or bonus for six months from April as part of the company's response to the Covid-19 crisis.

Kainos is one of the longest standing independent technology companies in the UK, having been set up as a joint venture between ICL (now Fujitsu) and The Queen's University of Belfast.

Its shares launched on the stock market at 139p a share in July 2015 before peaking at an all-time high at 900p at the start of this year. Within two months of falling to 482p in the March market turmoil, the FTSE 250 index stock was back at a new high of 905p last month.

Source: TradingView. Past performance is not a guide to future performance.

Gannon sold 116,500 shares at an average price of 864p last Monday, but remains one of the company's biggest shareholders with a 6.5% stake. He also sold £3 million of shares last summer at a price of 622.4p.

The company, which is a leading Workday software partner and helps the government with digitisation programmes, recently marked its tenth consecutive year of growth with a 9% rise in pre-tax profits to £25.5 million after an 18% jump in revenues to £178.8 million. 

• AIM at 25: key events, star stocks and what it does best
• Income warning: why dividend drought is set to continue in 2021
• Take control of your retirement planning with our award-winning, low-cost Self-Invested Personal Pension (SIPP)

Kainos ended the year to 31 March with a strong cash balance of £40.8 million, but opted not to declare a final dividend until the impact of the pandemic on its markets is clearer.

Gannon joined Kainos in 1998 as the sales manager for Ireland before holding a company-wide role in strategy and marketing up until March 2017. The stock has fallen back to 703p following the latest market sell-off.