Europe News: Minorplanet stock creeps up after directors buy £31,450 worth of shares

Europe News:  Minorplanet stock creeps up after directors buy £31,450 worth of shares

Minorplanet’s stock has see-sawed quite drastically during the past three or four years, and it’s now trading at less than half the share price in the first quarter of this year.

The boom saw the company’s share price hit £8.50, but, according to ThisIsMoney, Minorplanet’s over-ambitious dash for growth cost it dearly, and its shares plummeted to 43p.

According to Steve Kremer of specialist research consultancy, TRN, after Minorplanet’s initial dramatic growth and several years of poor business performance that followed, the company underwent a major two-year restructuring in mid-decade, and announced a return to profitability in the year-ending August 2006.

Following initial signs of recovery, in July this year the company announced that its performance in the UK and Germany was likely to be materially below expectations, and that it had also suffered delays in product launches.

“Investor confidence seems to have suffered accordingly,” says Kremer.

Meanwhile, the company’s directors are cashing in on the slump, buying up shares at between 27p and 27.5p each – considerably less than the share price of six months ago.

Graham Fish, a non-executive director, purchased 35,000 ordinary shares at 27p each, representing approximately 0.11% of the company’s issued share capital a week or so ago. This week chief executive Terry Donovan and operations director Carolanne Hurley each purchased 40,000 shares at 27.5p each, giving them a total of 885,742 ordinary shares (2.74%) and 148,571 ordinary shares (0.46%) respectively of the company’s issued share capital.

Kremer points out that the usual reason for directors buying their shares back is that they have confidence in the business and they believe that the share price will go up again. It’s also a signal to other institutional investors and shareholders: “We believe in this company, so should you!”

Kremer commented that the sector as a whole is characterised by sometimes "nervy" investor support, reflecting the fragmented nature of both the supply base and the customer base, technical/operational complexity and inherent unpredictability of the market. These and other factors counter-balance the potential for explosive growth and profitability for the companies that can successfully ride the fleet management wave.

“Despite sometimes nervy institutional investors, growing confidence in the sector is evident from the recent spate of M&A activity, with recent examples including acquisitions by several private equity firms as well as by existing players such as CI Omnibridge , TomTom, Transics, Punch Telematix and many others.”

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