Purplebricks non-exec cashes in

April 28, 2017

by: Jonas Crosland and Alex Newman, Investors Chronicle

Purplebricks recently caused a stir by attacking traditional estate agents and the amount of commission they charge. This prompted a response questioning Purplebricks’ completion ratios.

Either way, Purplebricks has grabbed a lion’s share of the online market, although online sales still account for just 5 per cent of all completions. What is more, the original shareholders have seen an explosive increase in the value of their shareholdings. In fact, since the first day of dealing in December 2015, the shares have trebled in value.

In March, several original shareholders crystallised some of these gains by selling about 7.9m shares via an accelerated book build to institutional investors, and this month senior non-executive director Nick Discombe followed suit with the sale of 1.6m shares at 300p a share. That still leaves him and connected persons with just over 4.8m shares in the company.

Non-executive directors are not privy to inside information, but there’s nothing stopping them acquiring a company on whose board they sit. Martin Wiwen-Nilsson, Goldman Sachs’ former head of global commodities, is on a buying spree for shares in Kyrgyz miner Chaarat Gold, where he acts as a non-executive director. Since April 13, Mr Wiwen-Nilsson has been steadily building his holding in the company, which will soon start the first phase of development at its eponymous gold project.

This month, Mr Wiwen-Nilsson also subscribed to $375,000 (£292,000) of Chaarat’s $15m short-term senior secured convertible loan note issue. Under the terms of that deal, Mr Wiwen-Nilsson and Labro — an investment vehicle controlled by Chaarat’s non-executive chairman Martin Andersson — were given three months to acquire 3.5m shares without triggering a requirement to make a mandatory offer for the company. Assuming the concert party buys all of the shares, and Labro and Mr Wiwen-Nilsson convert their loan notes, the duo’s stake would amount to 48.5 per cent of the existing share capital.