As I am writing this column, a young vixen is trying to attract my attention. She is sitting upright on the lawn staring in at my writing room window. Then she moves closer and presses her nose against the large pane before running back to the lawn.
I try to ignore her but soon she is joined by two very young boisterous cubs.
Unlike some other gardeners, my wife and I do not use poisonous anti-slug pellets in the garden – but we see far fewer slugs since birds and foxes find them tasty to eat. What has this to do with my portfolio?
If I were a City professional in a skyscraper office I would not be faced with such temptations as fox watching – I could keep my eyes on share price movements and react rapidly to events with many quick “in and out” deals. Instead, I am just a private investor working on creative activities.
In my column on April 21 I highlighted some of the attractions of Oxford Biomedica. At that time the shares were 49.5p each – the same price I paid in March for my self-invested personal pension (Sipp) to increase its holding. Unfortunately, soon after my column appeared Oxford’s share price dropped and by May 9 it was only 41.5p.
On April 27 Susan Kingsman, co-founder and director of the company, sold 4m Oxford Biomedica shares for 48p each. Following this sale Kingsman still has an interest in more than 13m Oxford shares, including 8.29m held by her husband, Alan Kingsman, Oxford’s chief executive.
On April 30 two other Oxford directors, Andrew Wood and Peter Nolan, exercised options at 19.25p per share over 167,000 and 132,000 shares respectively and sold them for 48p each. Both gentlemen still have a holding in the company: Wood with 205,067 shares and more than 1.4m share options, and Nolan with 163,638 shares and 906,162 options.
At the time of writing I have confidence in the company and hope the share price will rise. Overall, my Sipp’s investment in Oxford Biomedica is still showing a profit.
One company which has proved rewarding for my Sipp to increase its shareholding is Weir Group. I first bought shares for 436p each on July 4 last year and added to the holding later that month for just above 384p per share.
Weir’s share price has since rocketed to over 660p following a spate of good news announcements. On March 21 the company announced its results for the 52 weeks ended December 29, 2006. Pre-tax profit was up 174 per cent over the previous year to £102.8m and the dividend per share increased by 10 per cent.
On May 8 Weir reported the sale of its Glasgow-based Weir Pumps operation to Clyde Pumps for a cash consideration of £45m. All employees of Weir Pumps will transfer to Clyde. The Glasgow pumps business represented less than 5 per cent of Weir’s annual profits.
At the annual general meeting on May 9 Weir’s chairman, Sir Robert Smith, stated that “orders booked” by the firm’s “continuing operations” in the first quarter of 2007 were “ahead of the same period in the prior year”. Sir Robert viewed “the outcome for the year as a whole with confidence”.
The following day Weir announced that it had agreed to sell its 24.5 per cent interest in Devonport Management (DML) for £86m to Babcock International.
DML offers a range of “design, build and support solutions across both defence and commercial sectors, including nuclear submarine refit and maintenance”.
The disposal of the DHL stake is conditional on the approval of the Ministry of Defence and shareholders in Babcock. Weir anticipates the transaction will be completed “in about 60 days” and will lead to “an exceptional profit of approximately £50m in Weir’s 2007 accounts”.
Weir plans to use the proceeds from the sale to “grow specialist higher margin businesses in oil, power and mining”.
My Sipp’s success with Weir more than makes up for its tiny holding in mail order group Dream Direct. Dream’s trading update on May 3 stated that “trading in the final quarter of the year ended 31 March 2007 was significantly worse than expectations”. The shares were suspended on May 4.
If I had not been painting, writing and watching garden creatures I might have dumped the shares some time ago.
