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.

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