Derek Pain: Animalcare is all set to come roaring back
No Pain, No Gain
Saturday 13 October 2012
Animalcare has failed to enhance the no pain, no gain portfolio since recruited almost a year ago. The shares have rarely stood above the 171p buying price and, after a profits warning, fell slowly but decisively. They are, as I write, around 136p. Figures, in line with the lower expectations, have not surprisingly made little impact.
Still I am, at least for the time being, sticking with the shares. The portfolio clearly alighted on them at the wrong time. There are signs that the climate is getting better and although it could be some time before we see 171p again the group is at least now heading in the right direction. The veterinary products concern is also in agreement with my desire to bolster the bank balances of shareholders. In spite of the disappointing profits performance, it has increased its dividend and I believe there are indications it will continue to adopt a progressive payments policy. Current yield is 3.3 per cent and if profit and dividend hopes are realised the return should increase. So the yield looks quite reasonable in these low interest rate days that, some believe, will continue to at least 2015.
Of course, the retreat from my buying price is disappointing. But the dividend attitude does provide some consolation.
The group's "true" pre-tax profits were £2.1m against £2.9m. At the adjusted level profits were £2.3m compared with £3m. Stockbroker N+1 Singer (the result of a merger between Singer Capital Markets and N+1Brewin) estimate that this year Animalcare will make an adjusted £2.6m. Analysts Chris Glasper and Sahill Shan say the group endured an "annus horribiles" last year but is now back on track. Trading so far this year is said to be "comfortably above" last year's display.
Another constituent, Marston's, has often been below my 95p buying price. My faith in the brewer and pub owner is now being rewarded as the shares have hit 120p. The group, like many others that have insisted that food and beer are the ideal blend for these straitened times, has continued to shrug off recessionary influences that have so devastated many drink-led pubs.
In a year-end trading update, the brewer of such hand pump beers as Brakespear and Pedigree said like-for-like sales at its increasing spread of managed pubs were up 2.2 per cent and the rest of the estate (composed of franchised, leased and tenanted outlets) rolled out operating profits some 3 per cent higher. Beer sales rose 2 per cent. The group has been busy building pub/restaurants for a few years to engage more fully in the casual eating-out revolution. Last year it opened 25 outlets and in the next 12 months or so could add up to another 25. Chief executive Ralph Findlay says returns from the newly opened pub/restaurants are "above target".
Marston's, too, likes to offer dividend comfort to shareholders. For a long while it enjoyed a yield in the 5 per cent and 6 per cent categories. The share price advance has, of course, cut the historic return to around the 4.9 per cent level. The interim dividend was lifted and I expect a modest increase in the final payment. Although Marston's shares are riding at around their best level for more than a year they are still a long way from the price hit some years ago when brewing and pubs were riding high.
Finally G4S which, despite unseemly take-over and Olympic shenanigans, remains a portfolio member. The security group has returned to the acquisition trail in Belgium, paying almost £3m for a fire and safety personnel and equipment enterprise there.
I have described G4S as an Indian rubber share; it keeps bouncing back. After shareholders rebelled against buying the Danish ISS catering and security group for £5.5bn the shares slumped alarmingly. They recovered only to suffer another roasting after the Olympic fiasco. The price has let bygones be bygones and improved to 269p, giving the portfolio a tiny but welcome profit. Even if its Olympic problems do reputational damage, I don't expect any reductions in dividend payments.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Day In a Page
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens