Derek Pain: A tale of shale and ale as Alkane and Marston's take centre stage

Two contrasting members of the No Pain, No Gain portfolio have made stock market ripples in the past week or so – one a longstanding constituent, the other a relative newcomer. Marston's, the long- established brewer, arrived in August five years ago; Alkane Energy, incorporated for only 20 years, was recruited last summer.

As if to emphasise the differences, Marston's rolled out interim profits; Alkane arranged a deal involving its potential shale gas interests. As I write, however, the two have had a common experience: their shares responded with decidedly flat displays.

The Pedigree and Brakspear brewer, with around 1,800 pubs, said underlying profits were up 9.4 per cent to £29m, but the statutory pre-tax figures showed a £54.8m loss. Such a display should not have come as a surprise. Indeed stockbroker The Share Centre warned before the results that Marston's disposal programme may produce "a short-term drag".

In the event, pub sales and other factors took their toll although it is quite clear the brewer is trading well, prompting the chief executive Ralph Findlay to observe: "We are beginning to see some evidence of consumer confidence returning in the regions, leaving us confident of making positive progress in the rest of the year." Revenue was up 4.5 per cent to £374.3m in the half year and the dividend was lifted by 4.3 per cent to 2.4p a share.

Marston's has sold 286 "small, wet-led" pubs for £116m and expects to open a further 27 of its new-style pub/restaurants this year.

The shares, like so many small and mid caps, are a long way from their 12-month peak. They hit 165.5p and now reside at 147p. The portfolio recruited them at 95p.

Alkane's conditional arrangement to make an exit from its onshore shale prospects will leave it with 18 per cent of the buyer, Egdon Resources. When the deal is finalised, Egdon will be one of the major players in this country's nascent and still controversial fracking activities.

Alkane has been exploring the shale potential of its sites for some time. It was weighing whether it should go it alone, recruit a partner or sell out. In the event it is selling but retaining an interest in more than 140,000 acres, 10 licences and possibly a huge amount of gas. It also obtains a slice of Egdon's existing shale interests. Alkane maintains that the deal leaves it "best placed to benefit from any uplift in shale development while enabling the group to continue to focus on its core power-generation business".

As part of the shale takeover, Egdon is raising £7m through a placing and open offer at 20p – the same price as the valuation placed on the Egdon shares that Alkane is collecting. Those shares are around the 25p mark, capitalising the company at £36m. Although at one time gaining about 4p on the deal, Alkane shares seem to have settled at near 39p, a little below the portfolio's buying price.

Another portfolio constituent, the Avation aircraft-leasing group, has modestly increased its shareholding in offshoot Capital Leasing, an Aim-traded company. By buying 180,000 shares at 15.25p, it has lifted its stake to 65.6 per cent. As I mentioned a few weeks ago, a bid for full control could emerge in the not- too-distant future.

Avation has also achieved a tax advantage by becoming a member of a Singapore scheme that allows a reduction in corporation tax. The group qualifies for this benefit because of its extensive operations in Singapore.

yourmoney@independent.co.uk

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

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Pricing Analyst

    £30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

    Guru Careers: C# Project Team Lead

    £55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

    Day In a Page

    Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

    Blundering Blair quits as Middle East peace envoy – only Israel will miss him

    For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
    Fifa corruption arrests: All hail the Feds for riding to football's rescue

    Fifa corruption arrests

    All hail the Feds for riding to football's rescue, says Ian Herbert
    Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

    The Kurdish enclave still resisting the tyranny of Assad and Isis

    In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
    How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

    How I survived Cambodia's Killing Fields

    Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
    Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

    How Stephen Mangan got his range

    Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor
    The ZX Spectrum has been crowd-funded back into play - with some 21st-century tweaks

    The ZX Spectrum is back

    The ZX Spectrum was the original - and for some players, still the best. David Crookes meets the fans who've kept the games' flames lit
    Grace of Monaco film panned: even the screenwriter pours scorn on biopic starring Nicole Kidman

    Even the screenwriter pours scorn on Grace of Monaco biopic

    The critics had a field day after last year's premiere, but the savaging goes on
    Menstrual Hygiene Day: The strange ideas people used to believe about periods

    Menstrual Hygiene Day: The strange ideas people once had about periods

    If one was missed, vomiting blood was seen as a viable alternative
    The best work perks: From free travel cards to making dreams come true (really)

    The quirks of work perks

    From free travel cards to making dreams come true (really)
    Is bridge the latest twee pastime to get hip?

    Is bridge becoming hip?

    The number of young players has trebled in the past year. Gillian Orr discovers if this old game has new tricks
    Long author-lists on research papers are threatening the academic work system

    The rise of 'hyperauthorship'

    Now that academic papers are written by thousands (yes, thousands) of contributors, it's getting hard to tell workers from shirkers
    The rise of Lego Clubs: How toys are helping children struggling with social interaction to build better relationships

    The rise of Lego Clubs

    How toys are helping children struggling with social interaction to build better relationships
    5 best running glasses

    On your marks: 5 best running glasses

    Whether you’re pounding pavements, parks or hill passes, keep your eyes protected in all weathers
    Joe Root: 'Ben Stokes gives everything – he’s rubbing off on us all'

    'Ben Stokes gives everything – he’s rubbing off on us all'

    Joe Root says the England dressing room is a happy place again – and Stokes is the catalyst
    Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

    Please save my husband

    As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada