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Building materials group Breedon has had a turbulent year. It moved its listing from Aim to the main London market, adopted a much more generous dividend policy and embarked on an ambitious move into the US.
The $300 million (£238 million) takeover of BMC Enterprises in March was described as a “beachhead transaction” by chief executive Rob Wood. It provides an entry point into a U.S. construction sector that stands to benefit from federal and state infrastructure investment programs, such as the 1,200 Infrastructure Investment and Jobs Act. billions of dollars.
Against this backdrop, it seems somewhat surprising that shares have been trading in a tight range, up just 5 percent (taking into account last May’s five-to-one consolidation) for the year.
It has faced a combination of headwinds, including a moribund property market in the UK (from which it derives around a fifth of its revenue), which has driven volumes down and put pressure on margins. Breedon’s return on invested capital also fell from 10.8 percent to 9.9 percent in 2023, just below its benchmark target of 10 percent.
On the other hand, a vehicle linked to company chairman Amit Bhatia made large stock purchases. Abicad Holdings said in October that while it would continue to purchase Breedon shares, they were held “for investment purposes” and that it had no plans to make a bid for the company. She then bought £45m worth of shares in October, plus a further £1.6m in November, taking her stake to 18.2 per cent as of February 20 this year, according to the report annual of the company. And it seems that diving in the United States did not delay him. Last week, Abicad bought a further £5.8 million worth of shares.
Alpha’s chief risk officer cashes in
Foreign exchange trading and hedging specialist Alpha Group International has benefited from an impressive rebound in its share price after a string of positive annual results and accompanying improvements boosted investor confidence.
Shares have risen 25 percent since reporting results on March 20, despite what management described as “challenging market conditions” that have limited growth in its core foreign exchange hedging business. Analysts expect revenue growth of 16% for 2024, with the company responding by protecting its margins.
So the ambient music was undeniably upbeat. And, not surprisingly, the management below the board decided to sell thanks to the strength of these stock prices. Alpha’s largest recent sale was by divisional head Alex Howorth, managing director of FX risk management, who sold a block of 11,495 shares at an average market value of 1,740p, or a total of £200,000.
The company said the sale of the shares represented less than 4 percent of Howorth’s total stake and was motivated by personal cash flow reasons. There is a general feeling of change in Alpha. In its annual results, the company said Dame Jayne-Anne Gadhia would fill the vacant position of chairwoman. Gadhia has a banking background and was chief executive of Virgin Money between 2007 and 2018. The appointment will add weight to City on the board as Alpha moves from Aim to the main market. According to broker Peel Hunt, this should give it more visibility and attract interest from international investors. J.