Connaught FD buys after share price drop

A round-up of the biggest director deals today so far.

Connaught finance director Stephen Hill has added 50,000 shares to his holding in the outsourcing company following the departure of its chief executive last Friday.

Hill has invested £158,500 at 317p a share. This follows the purchase of 5,000 shares for 331p each on 29 January. Hill owns 177,660 shares in Connaught - equivalent to 0.13% of the company.

Last November, Hill bought 10,126 shares at 395p each. The month before he had taken up options over 1m shares at 203p each and then sold 900,000 shares at 425p each. This generated nearly £1.8m net for Hill. The more recent purchases at much lower prices have not used up much of that cash.

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The departure of Mark Davies as chief executive led to a sharp fall in the Connaught share price last Friday. This has provided a buying opportunity for Hill and new chief executive Mark Tincknell, who was previously executive chairman. Tincknell was chief executive when Connaught floated on AIM in 1998.

Tincknell has invested £647,000 in 200,000 additional shares since Davies' departure - buying equal numbers at 327.5p and 319.5p. He owns 898,840 shares, or 0.65% of Connaught. Tincknell sold 650,000 shares at 355p each last May, raising £2.3m.

Hill joined Connaught in September 2006 and, along with Davies, he significantly improved the company's cash generation. Although the 2008-09 cash generation was relatively weak.

The share price remains well below its all time high of 444p achieved last November. It is also below the last major placing price. Connaught raised £12.1m from a placing at 350p a share in July 2009. This was to finance the acquisition of fire services provider UK Fire and pest control company Igrox. In the same month, Connaught acquired forestry services provider fountains in an all share bid.

Connaught specialises in the social housing, environmental and compliance sectors. KBC Peel Hunt forecasts a rise in pre-tax profit from £42.5m to £55.8m in the year to August 2010. Even after the large share issues, earnings per share are expected to increase by 18%.

Top Director Buys

Connaught (CNT) Director name: Mr Stephen HillAmount purchased: 50,000 @ 317.00p Value: £158,500

Ovoca Gold (OVG) Director name: Mr Timothy McCutcheonAmount purchased: 200,000 @ 19.00p Value: £38,000

Sportingbet (SBT) Director name: Mr Peter DicksAmount purchased: 28,689 @ 69.71p Value: £19,999

Sportingbet (SBT) Director name: Mr Sean O'ConnorAmount purchased: 28,689 @ 69.71p Value: £19,999

Legal & General Group (LGEN) Director name: Sir Sir Robert J MargettsAmount purchased: 20,238 @ 76.95p Value: £15,573