Derek Pain: I'm betting on Booker to carry on beating the gloom

No Pain, No Gain

The retail community may be feeling the pinch but Booker, the cash-and-carry chain, appears to be surviving in some style. Sales in the year just ended totalled £3.6bn, a 6.2 per cent advance, with the like-for-like figure 5.1 per cent higher. And the cash pile has grown significantly, from £7m to £27m.

Not surprisingly the stock market is wondering whether the reborn group can maintain its heady progress. Many of its customers – mainly convenience shops, pubs and restaurants – must be feeling the impact of the cold financial winds ripping through most sections of the nation. But Booker continues to capture new shoppers, is widening its appeal and has yet to reap the full benefits of last year's two acquisitions; a hotel food supplier and a drinks wholesaler.

Significantly, in the final 12 weeks of its year, total sales rose 6.4 per cent. I would be astonished if the group manages to completely ignore the gloomy economic climate but, because of its trading pattern, I feel it is in a better position to continue to prosper than many others. Stockbroker Investec expects the year's profits, due next month, to hit £66.7m against £56m last time. This year's estimate is £72.4m.

Booker was recruited to the No Pain, No Gain portfolio at 24.5p in January 2009. As I write the shares are 61p, hovering around their highest since the group returned to the stock market four years ago when it reversed into a wholesaling business called Blueheath. Capitalisation is about £934m. My present intention is to hang on to the shares, despite the deteriorating retail outlook. It would require a significant setback to force a change of mind.

Lighthouse, a much smaller company, is another constituent to report on its trading performance. As seems customary these days the accountancy group produces a selection of profit figures with underlying profits coming out at £1.3m against £1.1m and "true" pre-tax profits emerging at £129,000, up from £93,000.

The group faces challenges but at 9p the shares look undervalued. Capitalisation is around £3.9m; yet there is £11m (up from £9m) resting in its bank account. True, more than half of this hoard has to be held for regulatory purposes but even so it looks to be exceedingly well endowed. It is spraying a little of its cash pile among shareholders, increasing the dividend by 20 per cent to 0.36p a share. The portfolio paid 17.5p in August 2006. Subsequently the price roared ahead to 35p but it has been downhill since and although I regard the shares as cheap I am beginning to wonder whether, in view of the stock market's continued indifference, the portfolio should accept its loss and bail out.

Rivington Street Holdings, a more recent constituent, continues its hectic expansion programme. Last year it moved to embrace gold and silver operations. Hameldon Resources became Athol Gold, and Directex Realisations was reborn as Woodbourne Square, a silver group. Now a soft commodities satellite, Agneash, is due; it is at the moment a Plus-traded investment shell called High Road Capital that, after a cash raising, has £900,000 in the bank.

Tom Winnifrith, who is chief executive of Rivington, has already assumed investment roles at Athol and Woodbourne and will take on a similar position at Agneash. The latest deal follows the pattern of the two earlier ones with Rivington taking a significant stake and its fees related solely to performance.

Rivington, which moved its residence to the Isle of Man last year, seems keen to emphasise the Manx connection – its office is on Athol Street and Mr Winnifrith's home is at Woodbourne Square, both in Douglas, and Agneash is a nearby village.

The growing Rivington corporate side has recently arranged a £750,000 loan note placing for a client, Viridas, a brave little business growing bio energy crops in Brazil. At one time it was called Caldwell and sold men's underwear and such items as canopies. Under the direction of chairman Stanley Wootliff, a City veteran, it switched into biofuels four years ago.

Now, it looks as if Viridas will change its spots again. New directors are promised and perhaps less exotic natural resources will be encompassed. The shares (Rivington does not have an interest) are around 1.5p, capitalising the company at just £360,000.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
Life and Style
A still from a scene cut from The Interview showing North Korean leader Kim Jong-un's death.
tech
Voices
'That's the legal bit done. Now on to the ceremony!'
voicesThe fight for marriage equality isn't over yet, says Siobhan Fenton
Life and Style
Approaching sale shopping in a smart way means that you’ll get the most out of your money
life + styleSales shopping tips and tricks from the experts
Arts and Entertainment
Bianca Miller and Katie Bulmer-Cooke are scrutinised by Lord Sugar's aide Nick Hewer on The Apprentice final
tvBut Bianca Miller has taken on board his comments over pricing
News
in picturesWounded and mangy husky puppy rescued from dump
News
newsAstonishing moment a kangaroo takes down a drone
Life and Style
Duchess of Cambridge standswith officials outside of the former wartime spy centre in Bletchley Park
tech
News
people
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

    The Jenrick Group: Night Shift Operations Manager

    £43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

    SThree: Trainee Recruitment Consultant - LONDON

    £20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

    SThree: Graduate Recruitment Consultant

    £20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...

    Day In a Page

    Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

    Clocks, rifles, swords, frogmen’s uniforms

    Surrounded by high-rise flats is a little house filled with Lebanon’s history
    Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

    Four months after the bombardment, Gaza’s wounds are yet to heal

    Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
    Gastric surgery: Is it really the answer to the UK's obesity epidemic?

    Is gastric surgery really the answer to the UK's obesity epidemic?

    Critics argue that it’s crazy to operate on healthy people just to stop them eating
    Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

    Homeless Veterans appeal: Christmas charity auction

    Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
    Pantomime rings the changes to welcome autistic theatre-goers

    Autism-friendly theatre

    Pantomime leads the pack in quest to welcome all
    The week Hollywood got scared and had to grow up a bit

    The week Hollywood got scared and had to grow up a bit

    Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

    Panto dames: before and after

    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
    Thirties murder mystery novel is surprise runaway Christmas hit

    Thirties murder mystery novel is surprise runaway Christmas hit

    Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
    Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

    Anne-Marie Huby: 'Charities deserve the best'

    Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
    The botanist who hunts for giant trees at Kew Gardens

    The man who hunts giants

    A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
    The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

    The 12 ways of Christmas

    We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
    Birdwatching men have a lot in common with their feathered friends, new study shows

    The male exhibits strange behaviour

    A new study shows that birdwatching men have a lot in common with their feathered friends...
    Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

    Famous diaries: Christmas week in history

    Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
    From noble to narky, the fall of the open letter

    From noble to narky, the fall of the open letter

    The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
    A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

    A Christmas ghost story by Alison Moore

    The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'