Interactive Investor

Insider: big purchases at two familiar names 

27th September 2021 08:42

Graeme Evans from interactive investor


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There’s significant share buying at some of the country’s biggest estate agents, and bargain hunting at a struggling summer IPO stock.

The boss of the UK and Europe arm of Savills (LSE:SVS) has backed further progress in the property agency's key global markets after he acquired £122,500 worth of company shares.

James Sparrow, who joined Savills in 1988 and has been in his current role since 2018, made the purchase at a price of 1,366p, which is close to an all-time high for the FTSE 250-listed stock.

Shares were boosted last month when Savills posted a record half-year performance, benefiting from a strong recovery in global residential markets and the company's continued growth in less transactional areas such as property and facilities management.

Subject to Covid-19, the half-year figures prompted Savills to forecast that full-year results will be meaningfully ahead of previous expectations. Its optimism reflects hopes for a continued “progressive recovery” in transactional markets, albeit with activity likely to return to more normal levels after an exceptionally busy start to 2021.

This included a record first half performance for Sparrow's UK residential transaction business, where revenues rose 97% to £104.2 million after both second-hand and new home sales rose significantly.

Central London investment and leasing activity was more muted in the first half, although the UK commercial division still increased fee income by 25% to £38.5 million.

Across transaction advisory work, which includes operations in Asia Pacific and North America, revenues rose 30% to £362 million. The less transactional businesses now account for 61% of the company after growing revenues by 11%.

In response to the results, Numis Securities upgraded its 2021 and 2022 profit forecasts by 24% and 12% respectively, and said it now expects profits to recover to 2019 levels one year earlier than expected in 2022.

Analyst Chris Millington added: “This update corroborates management's decision to continue investing in the business through Covid. Whilst uncertainties persist in the global real estate market we are confident that Savills will emerge a stronger player.”

He highlighted the company's leadership in key property markets, geographic diversification and strong balance sheet after Savills ended the period with net cash of £106.7 million.

Elsewhere in the sector last week, Nigel Rich bought Foxtons Group (LSE:FOXT) shares worth £150,000 ahead of starting as chairman of the London-focused estate agency chain at the start of October.

Rich has previously held a similar role at Hamptons International and is currently on the boards of Urban Logistics Reit and AVI Global Trust. He bought his shares at 52.4p, which
is down from the 60p seen in July and the 94p prior to the pandemic.

The chartered accountant replaces Ian Barlow, who came under pressure earlier this year after 40% of AGM votes went against the company's remuneration report and a major shareholder hit out at the share price performance. Barlow has been in the role for eight years.

Betting this IPO can bounce

Seraphine (LSE:BUMP) chief executive David Newton Williams has spent £250,000 in a show of support for the maternity wear brand after the newly-listed shares tumbled 25% last week.

The company said trading since the start of July had been more challenging than expected after supply chain issues from China meant it struggled to fully satisfy customer demand.

Underlying earnings for the first half of the financial year are now set to be 15% below the previous year at around £2.5 million. Seraphine is now taking action to improve the full-year performance, including through the redistribution of marketing spend to rebuild momentum.

Williams, who has been in charge since 2019 and has previously held roles at ASOS, said: “I believe the actions we are taking are the right ones to ensure an improved second half performance and I remain fully confident in the future prospects for Seraphine."

He backed up these comments by acquiring 125,000 shares at a price of 200.5p on Thursday, while non-executive director Sharon Flood spent £100,000 on shares at the same price.

Under the ticker BUMP, Seraphine was valued in its July IPO at £150.2 million based on an initial launch price of 295p. Numis Securities began its coverage a short time later with a price target of 330p, having noted the company's growth potential was underpinned by factors such as a long track record of profitable growth and healthy gross margins.

Seraphine opened its first store in west London in 2002 and is a digital-led brand supported by an active social media strategy and high profile endorsements.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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