Derek Pain: A loss so big it's worth waiting for a recovery

No Pain, No Gain

It's the best and the worst this week. Booker, the undoubted star of the no pain, no gain portfolio, has chalked up another commendable performance but SnackTime has managed to confirm its role as the weakest of my dozen constituents.

I can imagine that some readers may be getting a little tired of my laudatory comments on Booker; so I intend to dwell in some detail on SnackTime, a vending machine group that so far has lost the portfolio approaching 80 per cent of its £5,000 stake. It is always humiliating to descend on a disastrous investment and I can only apologise for the portfolio's collection of misadventures. We all know that shares can go up as well as down, but the portfolio seems to have encountered rather more than the acceptable allocation of duff stocks in the past few years. This is no doubt due to its reliance on small caps. At one time they were the key to making money. But, as I keep complaining, they are, with a few exceptions, now utterly unloved as investors eschew what are regarded as the more riskier elements of the stock market. This attitude will change – but when is anybody's guess.

The portfolio arrived on SnackTime, which ranks as the nation's third largest vending machine operator, at 119p. The shares subsequently approached 200p but the price, as I write, is a mere 28.5p, capitalising the company at £4.7m.

In its early days of stock market life the group was highly regarded. It even successfully absorbed a rival firm. But then it acquired Vendia, another vending group, in a near £11m deal. In effect, the takeover doubled SnackTime's size. It has proved such a mighty swallow that the group appears to have suffered from chronic indigestion. Whether it appreciated the problems it assumed when it absorb Vendia is unclear. Even so, its difficulties have been intensified by the recession and the much higher costs the group has experienced.

But it appears the re-organisation – a "challenging" exercise in the words of its new chairman, Jeremy Hamer – is now largely complete and "there are encouraging signs of progress being made across the group".

Mr Hamer became executive chairman in May, replacing Blair Jenkins. He is a former chairman of Inter Link Foods where the portfolio, thanks to a timely sale, nearly doubled its money.

In the year to end-March, SnackTime suffered a loss of £772,000 on revenue up 28 per cent, reflecting acquisitions – rather weaker than I expected.

As a vending machine operator the group embraces both snacks and drinks. Most of its outlets are company-run but it has a franchise business, Snack in the Box, that perhaps offers the best chance of non-acquisition expansion. In recent times directors, including Mr Jenkins, have picked up 345,000 shares. A modest outlay, but perhaps a significant indication of their confidence that the group's performance will improve. At least for the time being the portfolio intends to retain the shares. There seems little point in selling at this stage. I should have sold earlier but once again I have not been sufficiently ruthless.

Now to Booker. Sales in the first 12 weeks were up 1.7 per cent although tobacco income declined. Following a 24 per cent rejection of its pay report at last week's annual meeting, the cash and carry chain said it would re-examine its policy. The shares are around 90p while the portfolio paid 24.5p. I have no complaints about the group's remuneration policy which, for the second year running, has come under the spotlight.

Finally, Northern Petroleum. I have often discussed the yawning gap between the oil and gas group's assets and share price. Analysts Peter Bassett and Andrew Matharu at the stockbroker Westhouse Securities reckon there is "considerable value embedded" in the group's portfolio and calculate that asset value could be as high as 351p a share. The analysts believe the share price discount to their estimate is far too large and have settled on a 123p target price. The portfolio descended on Northern last summer at 68p a share; after approaching 100p the shares are now around 71p.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

peopleJonathan Ross has got a left-field suggestion to replace Clarkson
Andy Davidhazy at the beginning (left) and end (right) of his hike
Arts and Entertainment
The teaser trailer has provoked more questions than answers
filmBut what is Bond's 'secret' that Moneypenny is talking about?
Johnny Depp is perhaps best known for his role as Jack Sparrow in Pirates of the Caribbean
peopleBut how did he break it?
Lewis Hamilton secured his second straight pole of the season
f1Vettel beats Rosberg into third after thunderstorm delays qualifying
Arts and Entertainment
Written protest: Julia Donaldson, author of The Gruffalo, has sent an open letter to the Culture Secretary
travel Dreamland Margate, Britain’s oldest amusement park, is set to reopen
Founders James Brown and Tim Southwell with a mock-up of the first ever ‘Loaded’ magazine in 1994
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Retirement Coordinator - Financial Services

    Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

    Recruitment Genius: Annuities / Pensions Administrator

    Negotiable: Recruitment Genius: You will be the first point of contact for all...

    Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

    £18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

    Ashdown Group: Learning and Development Programme Manager

    £35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

    Day In a Page

    The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

    The saffron censorship that governs India

    Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
    Prince Charles' 'black spider' letters to be published 'within weeks'

    Prince Charles' 'black spider' letters to be published 'within weeks'

    Supreme Court rules Dominic Grieve's ministerial veto was invalid
    Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

    How did fandom get so dark?

    Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
    The galaxy collisions that shed light on unseen parallel Universe

    The cosmic collisions that have shed light on unseen parallel Universe

    Dark matter study gives scientists insight into mystery of space
    The Swedes are adding a gender-neutral pronoun to their dictionary

    Swedes introduce gender-neutral pronoun

    Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
    Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

    Disney's mega money-making formula

    'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
    Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

    Lobster has gone mainstream

    Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
    Easter 2015: 14 best decorations

    14 best Easter decorations

    Get into the Easter spirit with our pick of accessories, ornaments and tableware
    Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

    Paul Scholes column

    Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
    Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

    The future of GM

    The greenhouses where Monsanto 'plays God' with the future of the planet
    Britain's mild winters could be numbered: why global warming is leaving UK chillier

    Britain's mild winters could be numbered

    Gulf Stream is slowing down faster than ever, scientists say
    Government gives £250,000 to Independent appeal

    Government gives £250,000 to Independent appeal

    Donation brings total raised by Homeless Veterans campaign to at least £1.25m
    Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

    The most borrowed book at Bank of England library? Oh dear

    The book's fifth edition is used for Edexcel exams
    Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

    Cowslips vs honeysuckle

    It's the hunt for UK’s favourite wildflower
    Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

    Did a botched blackmail attempt help Cyril Smith escape justice?

    A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss