Derek Pain: At last, some signs of life at green TEG

No Pain, No Gain

TEG, one of the No Pain, No Gain portfolio's small-cap constituents, is showing signs of justifying the faith of its long-term shareholders. The composting technology group has performed miserably since being recruited in November last year at 8p a time. The price slumped in response to a rescue cash call in June but last week came a shaft of hope as what appears to be a rewarding and significant contract was finalised.

The group, in conjunction with environmental funds, some set up by the Mayor of London, Boris Johnson, is establishing a green facility at Dagenham which should be functioning in the first quarter of 2014. TEG will have a 24.5 per cent stake in the company that will run the operation. In addition it will build the plant, producing around £16m of revenue for the group, and then operate the cutting-edge development for a fee starting at £1.3m a year.

When completed, Dagenham will absorb 49,000 tonnes of food and green waste a year, producing, in addition to such essentials as agricultural compost, sufficient electricity for 2,000 homes.

So, suddenly, it's good vibrations for TEG. It has recently produced the type of display that drives shareholders to distraction. The shares were once about 150p. Although promise abounded, it seemed destined to become one of those forever jam tomorrow companies.

Last year, the shares fell sharply on a surprise cash call and earlier this year came the rather urgent request for more money. The portfolio invests only £5,000 in each member and is, therefore, unable to indulge pleas for more cash. In the event, it would have scored by subscribing for its share entitlement.

This year's £2m injection was at 3p a share. With the shares now approaching 6p, the portfolio's overall investment would have looked much more encouraging. TEG has clearly indicated that it is on the right route in this fledgling and still controversial green business and may soon rid itself of the unhelpful "promises, promises" tag.

Another constituent, Animalcare, is also adding to its armoury. The animal medicines group has produced a new drug – one of four scheduled this year – to help ageing dogs. The potential market is estimated at £1.5m a year. The shares edged ahead but are still well below the portfolio's recruitment level.

Figures have emerged from other constituents. Whitbread, the leisure group, produced a 14.8 per cent first quarter sales growth but the Spirit Pub Co had to contend with a modest slowdown. The budget hotels, coffee shops and pub/restaurants chain is one of the portfolio's success stories. The shares, as I write, are 2,300p, compared with 1,105p when enlisted in the summer of 2008. I recall that around that time and for two or three years afterwards, some were sceptical about Whitbread's ability to withstand recessionary influences. But it has survived with something to spare.

Spirit was until last year part of Punch Taverns, so it is difficult to assess its performance over a number of years. But in its brief independent life, it has performed well. Its maiden results as a quoted company are, I suggest, going to look impressive despite the slowdown in growth in the final three months of its year.

The managed pub chain continued to roll out cheerful figures with sales up 4.1 per cent and the year's advance put at 4.8 per cent. The leased estate, however, remains a problem with net income down 5.4 per cent, making a year's fall of 4.9 per cent.

The pub chain is reducing its leased involvement, selling some outlets and switching a few to management. With rent reviews taking place, a fall in income is not surprising as earlier levels were fixed in happier times. The portfolio acquired the shares at 42p; they are around 55p after topping 60p.

Finally, Northern Petroleum, the oil and gas explorer and producer, reported interim pre-tax profits of €2.4m (£1.9m) against €689,000. With €28.2m in the bank, the group seems to be in a strong position to pursue its promising Italian explorations.

It also has a tiny stake in what appears to be a major strike off South America. The shares hover around the portfolio's buying price.

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

    Recruitment Genius: Digital Optimisation Executive - Marketing

    £30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

    Recruitment Genius: Financial Reporting Manager

    £70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

    Recruitment Genius: Payments Operations Assistant

    £23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

    Recruitment Genius: Telephone Debt Negotiator

    £13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

    Day In a Page

    Sepp Blatter resignation: The beginning of Fifa's long road to reform?

    Does Blatter's departure mean Fifa will automatically clean up its act?

    Don't bet on it, says Tom Peck
    Charles Kennedy: The baby of the House who grew into a Lib Dem giant

    The baby of the House who grew into a Lib Dem giant

    Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
    Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

    The harrowing testament of a five-year-old victim of Syria's endless civil war

    Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
    The future of songwriting: How streaming is changing everything we know about making music

    The future of songwriting

    How streaming is changing everything we know about making music
    William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

    Recognition at long last

    Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
    Beating obesity: The new pacemaker which helps over-eaters

    Beating obesity

    The new pacemaker which helps over-eaters
    9 best women's festival waterproofs

    Ready for rain: 9 best women's festival waterproofs

    These are the macs to keep your denim dry and your hair frizz-free(ish)
    Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

    Wiggins worried

    Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
    Liverpool close in on Milner signing

    Liverpool close in on Milner signing

    Reds baulk at Christian Benteke £32.5m release clause
    On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

    On your feet!

    Spending half the day standing 'reduces risk of heart attacks and cancer'
    With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

    The big NHS question

    Why are there so few new GPs when so many want to study medicine?
    Big knickers are back: Thongs ain't what they used to be

    Thongs ain't what they used to be

    Big knickers are back
    Thurston Moore interview

    Thurston Moore interview

    On living in London, Sonic Youth and musical memoirs
    In full bloom

    In full bloom

    Floral print womenswear
    From leading man to Elephant Man, Bradley Cooper is terrific

    From leading man to Elephant Man

    Bradley Cooper is terrific