Insider: directors exploit share crash at these three companies

It was a bad week for this trio of businesses which each suffered a major sell-off. City writer Graeme Evans explains why bosses have been taking advantage.

9th June 2025 07:59

Graeme Evans from interactive investor

The heavily-sold shares of MJ Gleeson (LSE:GLE) have received boardroom backing after a profit warning by the affordable homes builder sent a chill through stocks in the sector.

Chief executive Graham Prothero spent £30,000 on shares at a price of 390p, the FTSE All-Share company’s lowest level since the year following the mini-Budget of autumn 2022.

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Prothero’s investment came after his firm warned that the pace of the housing market recovery has not been sufficient to offset the cumulative margin impact of several headwinds.

These included increased build costs, flat selling prices and the continued use of incentives.

Broker Peel Hunt said the update was clearly disappointing, but that Gleeson remains a “unique asset in the industry”. It cut its price target by 100p to 590p following the update.

Gleeson shares fell more than 20% on the day of the warning, while FTSE 100-listed builders including Taylor Wimpey and Persimmon lost as much as 4% at one point over the week.

Peel Hunt believes that margin pressure will have been felt across the industry, given that the new build market is competing with a second-hand sector seeing high stock levels.

The City firm said the demand and supply imbalance has limited the ability to achieve net pricing gains or to see incentive rates unwind, both of which are a drag on margins.

It added: “These headwinds are likely to be more acute at the cheaper end of the market and across younger demographics, which is Gleeson’s core market.”

The company’s average selling price stood at £193,900 earlier this year, 34% below other housebuilders in the areas targeted by Gleeson in the Midlands and North of England.

This average means that a couple earning the National Living Wage can afford to buy a home on any Gleeson Homes development.

The margin pressure and disclosure that a planned land sale in East Yorkshire won’t be included means the homes division’s profit will be 15-20% short of expectations in the year to 30 June.

In addition, planning delays and other factors are likely to result in the business selling from fewer sites than previously forecast in the new financial year.

Gleeson’s other division, which identifies and promotes land through the residential planning system in southern England, has completed three transactions to date and is continuing work on a further seven anticipated to complete before the year end.

Singer Capital Markets cut its price target from 804p to 617p following the update, having lowered its profit forecasts for 2026 and 2027 by 20% and 19% respectively.

It added: “The update is clearly a stumbling block, but we remain encouraged by the substantial medium-term potential within Gleeson.”

In July 2023, Prothero set a medium-term target within a stable market environment to reach 3,000 annual completions.

If that level is achieved, the former Vistry boss anticipates profitability could broadly triple on 2024’s level and that Gleeson would resume its position as the UK’s fastest growing listed housebuilder.

The Sheffield-based company’s most recent annual results in September showed the sale of 1,772 new homes and a divisional operating profit of more than £30 million.

Peel Hunt expects profit to trough in the current financial year before a recovery thereafter.

It believes a significant step-up in outlets over the medium term should support volume growth in the high single digits and double-digit compound growth in annual earnings per share.

Buying after a Mitie fall

Hefty results-day reverses for Wizz Air Holdings (LSE:WIZZ) and MITIE Group (LSE:MTO) drew a swift response from their chief executives after they bought £226,500 of shares at much cheaper prices.

Mitie chief executive Phil Bentley spent £142,000 increasing his stake in the facilities manager at a price of 142p, which compares with 159.6p before Thursday’s annual results.

Shares slid after Mitie announced a cash and paper deal worth £366 million to buy the AIM-listed fire safety and inspection business Marlowe. As well as including new shares as part of the offer, Mitie suspended its £125 million buyback programme.

The acquisition, which is expected to be earnings accretive in its first year, is part of plans by Mitie to pivot from a UK leader in facilities management to one focused on technology-led and data-driven “facilities transformation”.

In the first year of its strategic plan, the group recorded a 13% rise in revenues to £5.1 billion and a record order book up 35% to £15.4 billion. Operating profit fell slightly to £162 million.

Shares nosedive

Wizz Air chief executive József Váradi bought shares worth £84,500 on Friday after the grounding of a large part of the budget carrier’s fleet overshadowed full-year results.

The disruption caused by the Pratt & Whitney engine issue contributed to a 62% drop in operating profit to 167.5 million euros (£141 million) for the year to March. The decline came despite record passenger traffic of 63.4 million passengers and total revenues 3.8% higher at 5.3 billion euros (£4.5 billion).

Váradi said: “I describe our financial year with two words: resilience and transformation. In an environment where rare challenges have become recurrent, Wizz Air has evolved structurally, embedding increased flexibility into our standard operating model.”

He said the airline had emerged “stronger, wiser, and better prepared”, adding that he expects operational improvement in the current year as the percentage of grounded aircraft relative to the total fleet continues to reduce.

Shares fell 28%, however, as the airline declined to give formal guidance on the financial outlook due to a lack of visibility across its trading seasons. Váradi bought his shares at 1,206p, which compares with more than 2,500p last June.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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