Insider: these FTSE 100 sellers just trousered over £250m

17th January 2022 08:45

by Graeme Evans from interactive investor

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There’s been massive selling at two of the country’s best-known retailers, but also a double dose of buying on AIM.

Significant sums have been raised after the bosses of JD Sports Fashion (LSE:JD.) and B&M European Value Retail (LSE:BME) opted to sell down their stakes in the wake of Christmas updates.

The moves by JD's executive chairman Peter Cowgill and the family office of B&M chief executive Simon Arora triggered sharp share price falls for their respective companies.

Cowgill generated more than £21 million by halving his stake in the sportswear chain at a price of 213.2p. The disposal left him with a 0.19% holding, but investors were shaken as shares dived 6.5% to below 200p and finished the week at 193p.

Cowgill has led the group since March 2004 and overseen its dramatic transformation into a retail powerhouse with substantial operations in the United States. The day before his disposal, Cowgill delivered a trademark JD Sports update by disclosing that profits for the year to January are likely to be at least £65 million ahead of City forecasts at £875 million.

He also forecast a similar figure for the 2023 financial year, which UBS analysts described as reassuring given ongoing supply chain disruption and tough comparatives in the US.

UBS has a price target of 265p, while counterparts at Peel Hunt increased their recommendation to 280p and said it was easy to build a case for this to be higher.

They said: “The comparatives continue to get tougher but JD remains with great momentum and relationships with big brands stay in the ascendant, when the opposite is true elsewhere.

“We expect further growth both organically and by acquisition, and our admiration is undimmed.”

B&M chief nets fortune from budget chain stock sale

Simon Arora, who became chief executive of B&M in the same year Cowgill took the helm at JD, has also overseen impressive growth after buying the business with his brother Bobby at a time when it traded from just 21 outlets.

The Liverpool-based general merchandise chain now has 693 B&M shops in the UK, as well as 310 Heron Foods convenience stores and 107 outlets under the Babou name in France.

Its Christmas update on 6 January impressed retail watchers as B&M grew like-for-like sales by 14% on the same quarter two years ago.

Arora called it a “very strong Golden Quarter” as he revealed that underlying earnings for the March financial year will be in the range of £605 million and £625 million, ahead of City expectations for a figure of £578 million.

The upgrade failed to benefit the share price, however, as the FTSE 100-listed stock has fallen from 635p on the morning of the trading statement to end last week at 564.8p.

Selling pressure accelerated on Friday after the disclosure that SSA Investments sold 40 million shares at 585p, raising £234 million. The move reduces SSA's stake in B&M from 11% to 7%, worth some £400 million.

SSA, which is beneficially owned by Simon and Bobby Arora, also sold 40 million shares representing a 4% stake in January 2021.

Buy equipment hire and computer games

On AIM, the long-serving chairman of HSS Hire (LSE:HSS) has spent almost £250,000 rebuilding his stake in the equipment hire business.

Alan Peterson, who has led the company's board since 2012, sold shares for estate planning purposes in October but pledged to resume buying shares in due course.

He did so on Thursday at a price of 16.6p, which is close to that earlier sale price. The purchase contributed to a strong end to the week for shares as they closed on Friday at 17.3p.

Peterson and chief executive Steve Ashmore have overseen a major overhaul that's focused HSS as a digitally-driven business. In November, it refinanced its debt in a move that resulted in a big reduction in annual interest payments.

The shares were 29p prior to the pandemic and 23p in April, but eased to 14p before Christmas.

Another AIM-listed stock to finish the week strongly was games studio Team17 Group (LSE:TM17) after it raised £78.6 million for the acquisition of Germany-based simulation games company Astragon.

Chief executive and major shareholder Debbie Bestwick took part in Thursday's fundraising at a placing price of 714p a share, alongside chairman Christopher Bell and director Martin Hellawell.

And on Friday, it emerged that chief financial officer Mark Crawford later spent £8,470 on buying Team17 shares at a price of 745p. The stock finished the week at 740p.

Founded in 1998, Astragon publishes games such as Firefighting Simulator that target a broad audience from young enthusiasts to technical experts and more casual gamers.

Peel Hunt, which has a price target of 915p, said the move gave Team17 a solid foothold in the simulation space and also provided the group with a broader audience reach.

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