Directors’ Deals: AstraZeneca chair bets on upward momentum

AstraZeneca is the jewel in the FTSE 100’s crown. The pharmaceutical group now has a market capitalisation of £182bn. This places it firmly ahead of Shell, the index’s second-largest constituent, with a market cap of £161bn.

This might be difficult to believe given oil’s well-documented resurgence in the wake of the war in Ukraine. But it is a testament to the power of both AstraZeneca’s pipeline and its existing portfolio of medicines.

The company recently overtook Pfizer in market value terms — a significant milestone given that the US firm attempted a hostile takeover of its UK rival nine years ago. AstraZeneca’s shares have climbed more than 123 per cent in the past five years, despite the well-documented turbulence surrounding its Covid-19 vaccine.

Some corners of management are clearly feeling bullish about the company’s prospects for continued growth. It was announced this month that Michel Demaré, non-executive chair of the board, had purchased 2,000 of the company’s ordinary shares at a price of £117 each.

On the other hand, chief financial officer Aradhana Sarin sold £1.15mn-worth of American depository shares a couple of days later. Two ADSs are worth one ordinary share.

Sarin previously sold more than 16,000 shares in November last year, a trade valued at £2.15mn. The share price has risen by roughly 9 per cent since then.

FactSet broker consensus says sales could rise to $46bn (£36.8mn) for the full financial year, up from $44bn last year. By December 2025, analysts currently estimate revenue will grow to over $54bn. 

Superdry chief tops up through equity raise

Superdry’s shares have cratered by 40 per cent this year on the back of weak trading and the withdrawal of profit guidance. Management had told the market that it expected pre-tax profits for this financial year of £10mn-£20mn. This was downgraded to a rough break-even position in January. Then, last month, “given the challenging trading environment”, even that was removed.

The fashion retailer has pinned trading issues — retail sales growth “at a slower rate than anticipated” and a difficult wholesale recovery — on the cost of living crisis and its impact on consumer spending. According to the board, demand for the company’s spring-summer collection has also been hit by inclement weather. Investors, as the year-to-date mark down of the shares indicates, are far from satisfied.

In this context, the turnround plan that founder and chief executive Julian Dunkerton is spearheading looks much needed. Around £35mn of initial cost savings have been identified, through such means as optimising the estate and improving procurement (which the company expects will be fully realised in financial year 2024) and work is being done to deliver further cost-cutting. Management expects this to deliver a “material uplift” in underlying profitability over the medium-term.

A turnround needs cash. Superdry proceeded with an equity raise, via a retail offer and placing of ordinary shares, earlier this month and raised gross proceeds of £12mn. Dunkerton’s bullishness on the future of the business was apparent in his acquisition of 4.5mn shares on 4 May as part of the raise, which takes his interest in the company’s shares to over 25 per cent.

The shares are rated at 15 times forward earnings, according to consensus forecasts on FactSet, in line with the five-year average. Analysts forecast sales of £624mn this financial year, in the middle of management’s guidance range of £615mn to £635mn, and a net loss of over £7mn.

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