The Johns Lyng Group Ltd (ASX: JLG) share price fell 11.75% today to $6.01 after an executive sold shares.
Johns Lyng describes itself as an integrated building services group delivering building and restoration services across Australia and the US. Its core business is rebuilding and restoring a variety of properties and contents after damage by insured events, including weather events.
Johns Lyng share sale
The business announced today that Lindsay Barbar, an executive director and group chief operating officer (COO), has sold 4 million shares in the company. According to the ASX announcement, the sale was for a total of $25 million.
This share sale represented around 31% of Mr Barber’s prior holding in the ASX share.
One of the most interesting things about a management share sale is the reason. I’m not sure any management figure would say “I think the shares are overvalued” or “I’m worried about a drop of the share price.”
The given reason was that it was done to “diversify Mr Barber’s personal asset portfolio”.
Despite the major sale, Barber will still retain 8.87 million shares which “continues to reflect the major proportion of his personal wealth and investments.”
Johns Lyng said that Barber “remains committed to his role as chief operating officer and executive director of the company.” He has told the company he has no intention to sell any more shares within the next 12 months.
Confirmation of FY23 guidance
The business confirmed that it’s still expecting FY23 sales revenue to be $1.03 billion, including ‘business as usual’ (BAU) sales revenue of $930.4 million, an increase of 27.4% year on year.
FY23 EBITDA (EBITDA explained) is expected to be $105.3 million, including BAU EBITDA of $93 million, representing an increase of 43.3% year on year.
Final thoughts
Johns Lyng is exposed to strong tailwinds with strong storm events, fire events, inflation and so on.
So, it’s interesting to see that management are selling shares – this sale follows on from October when the CEO sold 4 million shares – after a fall of more than 30% for the Johns Lyng share price.
Over the long-term, I think the business is still an attractive one to look at, but there will probably be some downs and ups on the journey.
