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Virbac & Borussia Dortmond

Directors at Virbac have been sending mixed messages of late. The company which is involved with animal pharmacology has seen another record year, with the company pushing its revenue over €500 million in 2010. The good news has continued into 2011, with both quarters having outperformed sales from the same time last year. Investors have been suitably impressed, and the share price has been pushed up to five year high in the last six months.

Despite all this good news, the directors don’t quite seem to know what to do. At the end of July, Chairman and Chief Executive, Eric Maree, invested into the market €110k. This followed Virbacs Supervisory Chairman, Marie-Helene Dick, who invested €55k. Both trades took place within two days at about €117. Strangely, M. Maree trade was a reversal of a sale he made in May, when the director dumped €125k, making himself €15k and an extra 50 shares in the process. Executive director, Pierre Pages, was also another changing tack. Having bought 500 shares at €118.39 in December, the directors then sold in June 2,183 shares at €126.65.

Generally the German market has been on the quiet side this last week, as many go on their summer holidays. One part of society that have already had their holidays and are back hard at work, are footballers. Assuming you can call playing football work. With the Bundesliga starting up on 5th August, the 2010-11 championsBorussia Dortmond will be hoping to get their season off to a flying start. The team jumped from 5th in 2009-10, to win the German domestic league title by 7 points two months ago. The win is also their first for ten years.

Financially, the big benefit of winning the Bundesliga is qualification for the Champions League. The final this year became the biggest grossing single annual sporting event, overtaking American football’s Superbowl. Manchester United almost made €80 million had they won last year’s competition, but had to settle for a total €74 million as runners-up. It is these revenues that will make the difference for Dortmond, as they try and match Bayern Munich’s dominance of German domestic football (having won 6 out of 10 Bundesliga titles). The Champions League hasn’t been a happy hunting ground for German teams in recent years, despite their dominance in the nineties, Bayern Munich were the first German team to make the final in 2010 for over five years. Also Schalke 04 were soundly beaten 6-1 by Manchester United in last year’s semi-finals. Dortmond will hope to go as far as they can, and try and emulate their 1997 season when they won the trophy.  

Their encouraging season was mirrored in the company’s share price, as it had a rapid rise from €1 at beginning of the season, finishing at €3.1 as they lifted the title in April this year. The team’s biggest shareholder and Supervisory board member, Bernd Geske, made the most of lower prices that followed the end of the season to top up his holding. The director was a major buyer throughout the 2009-10 season, buying substantial amounts whilst the price hovered around €1. However as the team started to perform, and prices rose, the director stopped purchasing until the end of the season. Since June the director has bought a total of €1.5 million, all at prices below €2.6.