After almost nine years as chief executive of Aim-traded recruiter Staffline, Andy Hogarth stepped down last month, making way for former finance director Chris Pullen to take his place. As Mr Hogarth settles into his new life as a non-executive director, he has sold most of his stake in the company, pocketing more than £10m in the process.
The sale reduces his stake to about a third of its original size, but Mr Hogarth has pledged not to sell any of his roughly 500,000 remaining shares in the group for at least 12 months. This will give Mr Pullen time to build up his own shareholding. He recently bought an additional 5,043 shares, but his stake amounts to a little over 0.06 per cent — well shy of Mr Hogarth’s newly diminished holding of 1.82 per cent. This at a time when the shares are struggling, having steadily de-rated since May last year.
Stephen Fenby, managing director of Midwich, has offloaded a beneficial holding of 1m shares in the audio/visual distributor, generating £6.2m in the process. The sale, which included holdings of family members, was conducted a fortnight after a trading update which detailed a 28 per cent increase in revenues combined with an improving gross margin and cash generation ahead of management expectations.
An improving gross margin will draw attention from analysts, particularly given that Midwich continues to upscale through acquisitions.
There are always costs associated with integrating acquired assets, but the group operates in niche markets and management appears to have a sharply defined perspective on which kind of businesses (and which locations) are likely to generate returns in line with the group average.
New Zealand-based Wired Ltd provides a case in point, while the recent purchase of UK distributor Sound Technology and majority stakes in Netherlands-based Gebroeders van Domburg and Iberia-focused Earpro have proved wholly beneficial, with the acquired assets performing either “in line or ahead” of expectations.
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