Insider: directors buy two housebuilders after heavy falls

Fresh pressure on valuations in the recruitment and housebuilding sectors has drawn a strong boardroom response after directors of four firms made purchases totalling £360,000.

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In the housebuilding sector, purchases by directors at Barratt Redrow (LSE:BTRW) and Vistry Group (LSE:VTY) took place in a week when the companies announced leadership changes, and sentiment was dealt a fresh blow by the Iran war and the knock-on impact for mortgage rates and buyer confidence.

Barratt announced that David Thomas is to retire after 11 years as chief executive and 17 years with the group. His replacement later in the year is Dean Banks, who is returning to the UK after five years leading Sydney-based infrastructure services provider Ventia.

The shares fell 14% across the week to stand on Friday at 314p, which compares with 478p in the summer. Non-executive director Nigel Webb, who has been a board member since October 2023, bought shares worth £49,000 on Thursday at a price of 329.4p.

He was followed on Friday by Katie Bickerstaffe, who topped up her shareholding with an investment worth £18,700 at a price of 322.8p. The former co-chief executive of Marks & Spencer has been a board member since March 2021.

The Vistry buying followed the results-day announcement that Greg Fitzgerald is to stand down as executive chair after May’s AGM and as chief executive by next year.

The former Galliford Try boss led the turnaround of Bovis and the acquisition of Linden Homes and Galliford Try’s partnerships business to create Vistry, which is now a leading provider of affordable, mixed tenure housing.

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Last week’s results were in line with guidance following a strong second-half performance, while Fitzgerald reported a positive start to the new financial year.

However, the targeted use of pricing initiatives and incentives to build momentum into the Spring selling season means that Vistry expects a lower margin in 2026.

The shares slumped by 25% at one point on Wednesday, when non-executive director Paul Whetsell made an investment worth £28,440 at a price of 474p. The shares closed that session 18% lower at 520p before continuing their slide to 446p on Friday, down from 1,300p in autumn 2024.

Peel Hunt maintained its Buy stance and 750p target price following the results. It said: “While the stars continue to align in the social housing/Partnerships market, the private market remains sluggish, limiting the speed at which the group can cut debt and capital employed.”

Crisis prices

This week’s boardroom deals included one worth £100,000 by the senior independent director of PageGroup (LSE:PAGE) after the FTSE 250-listed company slashed its dividend by 73% in Thursday’s annual results.

Former British American Tobacco finance chief Ben Stevens, who has been on Page’s board since January 2021, bought shares at a price last seen during the financial crisis in 2008.

Page closed Thursday’s session down 15% at 152p but had been as low as 139.7p, which is the point that Stevens made his investment. The stock has lost more than 50% of its value in the past year as the sector experiences its longest hiring downturn in two decades.

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Pre-tax profits fell 67% to £16.2 million as Page reported ongoing challenging conditions in the UK and continental Europe, offset by growth in the US and improved trading in Asia Pacific.

Chief executive Nick Kirk said the conversion of interviews to accepted offers remains the most significant area of challenge as economic conditions have fuelled candidate caution and caused companies to take longer on hiring decisions.

Pledging to control the controllables, he said Page benefited from a strong balance sheet and a “highly diversified and adaptable” business model. Shareholders will receive a final dividend of 3.21p a share worth £10 million on 17 June, which is down from 11.75p the year before.

Deutsche Bank retained its Buy recommendation following the results but cut its price target by 100p to 300p. It noted that fee rates remain close to record highs and that fee-earner productivity increased year-on-year and was significantly above pre-pandemic levels.

The shares of Hays (LSE:HAS) are already down by a third this year, having last month cut its interim dividend by 84% to 0.15p a share as profits fell 49% to £4.6 million despite a return to growth in the UK.

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Chief executive Dirk Hahn has stepped down for personal reasons, with chief digital and technology officer Ben Dearnley running the business in the interim.

Dearnley bought £150,000 of shares last week at a price of 38.6p, while board chair Michael Findlay and the company’s senior independent director made purchases totalling £12,000.

The company’s record low share price compares with 88p a year ago and Deutsche Bank’s reduced price target of 75p. UBS has a Neutral stance and 70p target.

Chief financial officer James Hilton said at the interim results: “When client and candidate confidence improve and the cycle recovers, I am confident we will deliver a strong drop through of net fee growth to operating profit.”