Derek Pain: Despite Nighthawk's lacklustre showing, the portfolio is edging up

No Pain, No Gain

The No Pain, No Gain portfolio has achieved modest headway in the past three months, but Nighthawk Energy, its one shot at enjoying some reward from the resources boom, is a worrying disappointment.

Recruited three years ago at 44p, the shares, as I write, have halved. Various exploration bulletins have been upbeat, but the US-focused oil and gas group has failed lamentably to endear itself to the stock market.

The shares, which once topped 100p, have, I feel, been buffeted by a round of private placings. The cash-hungry group may not have to indulge in another cash-raising exercise in the near future, although, with estimates it had only $9m (£5.8m) in the bank in July, the need for it to complete the sale of a stake in its main Jolly Ranch oilfield looks increasingly important. An earlier attempt to sell an interest ended in abject – even farcical – failure, and there is little doubt that its development progress has been costly and slow, failing to meet City hopes.

Yet, it seems to me that doubts may have submerged reason. The group has, I think, quite a lot going for it. Production hit a record 8,200 barrels of oil equivalent in August, and the past year's revenue has surged from $498,000 to more than $2m. Assets have climbed from $81m to $114m. And with the stockbroker Westhouse Securities looking for the shares to reach 88p, there must be a case for suggesting the stock market's valuation is far too timid.

Even so, developing its US assets is an expensive exercise. And in seeking to sell a minority Jolly Ranch stake, Nighthawk could crystallise values but is, in effect, also signalling cash needs. I believe it is the ghost of the failed asset sale that haunts some investors, and until a rewarding deal is clinched Nighthawk could remain under pressure.

With the shares continuing to edge lower, my patience is, not surprisingly, growing thin. Although I feel the stock market is being too harsh, I am reluctant to swim against the tide and may be forced to administer the old heave-ho unless sentiment improves.

Despite Nighthawk's negative contribution, the portfolio's quarterly report is moderately encouraging, with profits edging forward a few hundred pounds to £96,400. Dividends – which back-of-the-envelop sums suggest could have exceeded £30,000 during its near 12-year existence – and dealing costs are excluded from my calculations. The portfolio's gain is still well below its near £150,000 peak, hit when small caps were in demand and the stock market was a much happier place.

Booker, the cash and carry group, is the star constituent, nearly doubling in value. My two FTSE 100 stocks, however, have experienced mixed fortunes. Whitbread shares rose after it rolled out an upbeat trading statement that embraced heady performances by its Premier Inn and Costa Coffee operations and a satisfying display by its chain of pub/restaurants. But G4S, the security group, lost ground although its interim profits were quite solid.

It's also a game of two halves on the fringe Plus share market, with the two constituents in contrasting moods. NCI Vehicle Rescue, a roadside assistance group, remains on the right route, helped by chairman Richard Jackson topping up his share stake. But English Wines Group refuses to blossom and I expect to be forced to take retaliatory action in the near future.

Clarity Commerce Solutions, providing software for the leisure and retail industries, continues to win new (or improved) deals. It has produced another encouraging trading statement, reinforcing the view that profits could advance from £1.9m to £2.5m this year.

Since my last quarterly review, shares of Private & Commercial Finance, the hire purchase group, have slipped a little lower. One of the stockbroking firms following the company dramatically cut its profit forecast during the summer. At one time, Daniel Stewart was looking for profits of £1.1m. It is now forecasting £522,000 – roughly in line with other predictions floating around the stock market.

Hargreaves Services, the coal mining-to-transport group, produced another set of impressive results. Pre-tax profits rose 17.4 per cent to £30.7m, and with chairman Tim Rose talking about an "encouraging outlook" the year's dividend is lifted 14.4 per cent to 13.5p a share.

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

Suggested Topics
Finacial products from our partners
Property search
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

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Neil Pavier: Management Accountant

    £45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

    Sheridan Maine: Commercial Accountant

    £45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

    Laura Norton: Project Accountant

    £50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

    Day In a Page

    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf
    From Shakespeare to Rising Damp... to Vicious

    Frances de la Tour's 50-year triumph

    'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
    'That Whitsun, I was late getting away...'

    Ian McMillan on the Whitsun Weddings

    This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
    Kathryn Williams explores the works and influences of Sylvia Plath in a new light

    Songs from the bell jar

    Kathryn Williams explores the works and influences of Sylvia Plath
    How one man's day in high heels showed him that Cannes must change its 'no flats' policy

    One man's day in high heels

    ...showed him that Cannes must change its 'flats' policy
    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
    Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

    Laughter, but no tears, as Letterman takes his bow after 33 years

    Veteran talkshow host steps down to plaudits from four presidents
    Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

    Hozier's 'blasphemous' song takes Novello award

    Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
    Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

    Join the tequila gold rush

    The spirit has gone from a cheap shot to a multi-billion pound product
    12 best statement wallpapers

    12 best statement wallpapers

    Make an impact and transform a room with a conversation-starting pattern
    Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

    Paul Scholes column

    Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?