Three directors of Midwich have offloaded two million shares in the company, with the sale reported to be worth an estimated £12.4 million.
The sale shouldn’t start ringing alarm bells for investors; in fact, it can be seen as positive new for Midwich. Demand from an institutional investor forced Midwich to make 2.5% of the company available, leading to the directors to offer their own shares.
Stephen Fenby, managing director, and his family sold approximately 1 million ordinary shares, which equates to £6.2 million. They still retain 21.28 million shares of Midwich, however, meaning their stake in the company is around 26.8%.
Iain Campbell, the sales director, and Lee Baker, the commercial director, also sold shares, with each offloading around 500,000. Baker retains 1.95 million shares, or 2.5% of the company, while Campbell retains 1.25 million shares, or 1.6% of the company.
Speaking to the Financial Times, Stephen Fenby notes: “The sale, which included holdings of family members, was made a fortnight after a trading update which showed a 28% increase in revenues together 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.”