Directors’ Deals: Share purchases give N Brown a boost 

The UK faces recession and despite positive trading updates from some companies this month, new data from the Office for National Statistics showed that retail sales fell unexpectedly in December, following a small contraction the month before.

But the wife of N Brown’s biggest shareholder must feel optimistic, having just bought over £3.7mn of shares in the online clothing company. Lady Homa Alliance — who is married to Lord Alliance, the Iranian-born entrepreneur who chaired N Brown between 1968 and 2012 — bought almost 13mn shares over seven days, paying between 25.9p and 30p a share.

N Brown’s share price has rallied since the retailer issued a profit warning in October but a further trading update this month was also far from glowing — management said quarterly revenue fell by 8 per cent year-on-year, in what it described as a “soft and highly promotional market”. 

However, the group has finally settled a long-running legal dispute with Allianz Insurance. Allianz was the underwriter of historic PPI sold to customers by mail order catalogue firm JD Williams, an N Brown subsidiary. In January 2020, the insurer issued a claim against the retailer for the “significant amounts” of redress paid. Two years down the line, N Brown has agreed to settle the case for £49.5mn. 

After paying this, the group still has net cash of £30mn but a strong balance sheet on its own is not a good enough reason to invest in the company. Guidance has fallen, consumer spending is under serious pressure and customers are returning more items than before. With a forward price-to-earnings ratio of 40.1, according to FactSet, it’s a very expensive gamble.

Berkeley directors cash in chips

Four executive directors at luxury homebuilder Berkeley Group sold over £3mn in shares as the UK housing market enters its worst downturn since 2008.

Karl Whiteman, Justin Tibaldi, Paul Vallone and group finance head Richard Stearn

sold a combined 68,750 shares at £44.72 a share, the stock’s highest price since last January. Tibaldi and Vallone sold £894,446 each, while Whiteman sold £670,835 and Stearn sold £614,932.

The directors’ decision to sell comes after November data from Halifax revealed that house prices are falling faster than at any point since 2008, with experts predicting a 10 per cent drop over the course of 2023 as higher interest rates shrink buyers’ budgets and financing abilities.

Berkeley said in its results for the six months to 31 October published last month that it was entering into an “uncertain and challenging operating environment”. It added that “margins may be placed under pressure [ . . .] as households and businesses come to terms with heightened inflation, increased interest rates and the more protracted recession articulated by the Bank of England in its most recent forecasts”.

Berkeley posted a 2 per cent year-on-year drop in pre-tax profit for the period, with revenue flat and costs creeping higher. It said that sales dropped 25 per cent in the five weeks since the end of September, when compared with the previous five months.

Build cost inflation remained high at around 10 per cent, but it expected this to “moderate during 2023 from the current elevated levels”. Going forward, the company slashed its pre-tax earnings target for the next two years from £1.25bn to “at least £1.05bn”.