SEVERAL directors of Macfarlane Group (Clansman) sold shares in the Glasgow-based packaging company during the run-up to last week's annual meeting, when the board warned that problems at the plastic mouldings division would damage interim profits.
The annual meeting statement was not circulated to investors through the Stock Exchange, but one of Macfarlane's two house brokers, Spiers & Jeffrey, subsequently downgraded its profits forecast for the company. That move forced Macfarlane to issue a formal profits warning on Monday, which instantly wiped 8% off the share price.
This second statement, which was circulated through the Stock Exchange, specified that problems at the plastic mouldings division were expected to reduce profits by #2m at the half year.
Deputy chairman Godfrey Lane, chief executive William Mackie, finance director Andrew Reekie and Gordon Lane, the executive director in charge of Macfarlane's packaging division, all sold shares during the two weeks leading up to the general meeting on May 25. They realised prices of 165p to 172p, well above Macfarlane's closing price of 149.5p yesterday (Tuesday), a day after the profits warning. Together the four directors realised over #523,000.
A spokesman for Macfarlane Group insisted yesterday that the directors had proceeded in good faith and had done nothing wrong.
''The shares were sold in the proper manner with the appropriate authority of the board and the chairman,'' the spokesman said. ''It is not unusual for the directors of the company to sell shares at this time of year.
''When the shares were sold the directors believed, and they still do believe, that although the first half results would not be as expected, by the end of the year the trading performance would recover to a satisfactory level.''
However, Stock Exchange rules ban the directors from selling shares during ''any period when there exists any matter which constitutes unpublished price sensitive information in relation to the company's securities (whether or not the director has knowledge of such matter).''
The Macfarlane spokesman stressed that ''at all times the directors act in good faith with the utmost integrity''.
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