Johns Lyng share price slides following $13m of insider selling

Johns Lyng provided a share trading and business update today.

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Key points

  • Johns Lyng shares are tumbling 4.3% to $5.95
  • Insider selling by the company's CEO as well as the COO appear to be weighing down the Johns Lyng share price
  • Management reaffirmed its earnings guidance of FY22 while it is still assessing the financial impacts of the recent floods in Australia

The Johns Lyng Group Ltd (ASX: JLG) share price is heading south during early afternoon trade on Friday.

This comes as a couple of insiders have decided sell off a portion of their shares.

At the time of writing, the building services group’s shares are down 4.34% to $5.95.

Management offloads shares

In today’s statement, Johns Lyng revealed that Scott Didier and Lindsay Barber have both sold shares in the company.

Managing director and group CEO Didier disposed of 1 million Johns Lyng shares on market at $6.25 apiece.

Following the transaction, Didier now holds more than 53.31 million fully paid ordinary Johns Lyng shares. This equates to a holding of around 20.6% on the company’s registry.

In addition, executive director and group chief operating officer Barber also reduced his portfolio with 1 million shares sold. The price received per Johns Lyng share was $6.65.

After completing the sale, Barber retains almost 12.82 million shares in the company. His current holding represents 4.95% on Johns Lyng’s books.

The company stated the pair sold these shares to manage their personal asset portfolios.

On a separate note, Didier recently relocated to the United States to leverage a number of opportunities. This comes after the company acquired Reconstruction Experts for US$144 million in December 2021.

Barber’s role includes oversight of operations in Australia and the United States.

The company is still assessing the financial impact of the recent catastrophic weather-related events in Queensland and New South Wales.

Although it is too early to ascertain the cost, at this stage, management has reaffirmed its previous FY22 earnings guidance.

As such, sales revenue for the full year is expected to be $802.4 million, up from $481.8 million in FY21.

Furthermore, earnings before interest, tax, depreciation, and amortisation (EBITDA) is forecast to reach $78.7 million in FY22. This reflects an 84% increase on the prior corresponding period (FY21: $42.7 million).

Johns Lyng share price snapshot

Over the past 12 months, Johns Lyng shares have gained 40%, but year to date have headed the other way, down 33%.

The company’s share price has been moving on a downhill trajectory since the start of May.

Currently, the relative strength index (RSI) is at 22, indicating the company’s shares have been heavily oversold.

The RSI is a momentum oscillator that is used to assess the strength or weakness of a share price. Normal levels range between 30 and 70, as anything outside reveals if the share price is attractive to buy, or expensive.

Johns Lyng commands a market capitalisation of roughly $1.66 billion.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group Limited. The Motley Fool Australia has recommended Johns Lyng Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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