Derek Pain: In good shape as two laggards play catch-up

No Pain, No Gain

The no pain, no gain portfolio continues to progress, thanks to a more buoyant stock market and contributions from its star performers. Nine of its 14 constituents are in the money. Of the five showing losses, I remain optimistic about four with only one share creating acute concern.

The market has made a strong start to 2013, giving rise to hopes that it is set for a good year. The world economy may be edging higher – just – but the European Union remains deep in the mire and Britain continues to struggle, with the latest blow the loss of one of the top borrowing ratings. I do not regard the removal of the AAA classification by rating agency Moody's as particularly troublesome, even if it worries the pound for a time.

In days gone by, a run on sterling would prompt the Bank of England to hoist interest rates. Such an approach seems to have been ruled out, with the Bank more likely to opt for printing yet more money in the vague hope of encouraging that elusive economic growth. It has been said the Bank's money policy offers benefits to the stock market, and any inflation from the weak pound could add further fuel to shares besides helping exports.

But higher inflation could prompt customers to tighten their belts again, a development that would hit consumer-facing constituents such as Marston's and Whitbread. Whitbread produced a trading statement this week. My policy when drawing up the portfolio's quarterly performance is to use Monday's closing prices in an endeavour to provide consistency. So any further comments on the budget hotels, pub/restaurants and coffee shops group will have to wait until next week.

Still, two portfolio constituents that are in the doghouse have produced further evidence of recovery. Animalcare has released interesting interim profits prompting stockbroker N+1 Singer (which must be the oddest name in the stockbroking community) to observe that the veterinary group had "returned to form in grand style". Revenue was up 13 per cent at £6.1m with "true" pre-tax profits at £1.3m against £1.1m. High-margin medicines were the key drivers.

My timing when buying Animalcare was appalling. The portfolio descended on the shares 17 months ago just before they suffered a setback as the group encountered a few problems. The interim figures suggest the group is making headway and Chris Glasper, an analyst at N+1, says: "We see scope for out-performance in time."

TEG, the other on the recovery track, is due to announce year's results later this month. They should be satisfactory. The group, which develops and operates organic composting and energy plants, said in a trading update that revenues and profits "have improved markedly". The cash position is strong and borrowings low.

It's a sharp contrast to last year when TEG called for £2m as there was a danger of "significant uncertainty" if new cash was not forthcoming. The money was raised from shareholders but the portfolio was unable to participate because each investment is capped at £5,000. The group seems to have made quite spectacular headway since those dark days.

As with Animalcare, the portfolio's timing was suspect. I had to watch as the new cash was raised at 3p a share with the quoted price diving to around that against the 8p purchase cost. But the group has got going since then, and I remain hopeful that when the year's figures are published the shares will top 8p. TEG has started developing a waste site at Dagenham that should provide about £16m in revenue . It will run the completed project, in which it will have a 24.5 per cent interest.

The group has also just won a six-year contract with a "major waste management company" for 15,000 tonnes of organic waste composting that should pull in £2m. Michael Fishwick, chief executive, said the deal "further underpins our growing operational business".

At the time of writing, the portfolio is showing a £107,000 profit with the value of its 14 investments approaching £99,000, and more than £8,000 in cash. But that's still a long way from its peak when, in pre-banking crisis days, its gain was close to £150,000.

Life and Style
“What is it like being a girl?” was the question on the lips of one inquisitive Reddit user this week
News
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
Life and Style
beauty
PROMOTED VIDEO
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
transfers
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

Sport
German supporters (left) and Argentina fans
world cup 2014Final gives England fans a choice between to old enemies
Arts and Entertainment
A still from the worldwide Dawn of the Planet of the Apes trailer debut
film
News
peopleMario Balotelli poses with 'shotgun' in controversial Instagram pic
News
A mugshot of Ian Watkins released by South Wales Police following his guilty pleas
peopleBandmates open up about abuse
Sport
Basketball superstar LeBron James gets into his stride for the Cleveland Cavaliers
sportNBA superstar announces decision to return to Cleveland Cavaliers
Sport
Javier Mascherano of Argentina tackles Arjen Robben of the Netherlands as he attempts a shot
world cup 2014
Arts and Entertainment
The successful ITV drama Broadchurch starring David Tenant and Olivia Coleman came to an end tonight
tv
Sport
Four ski officials in Slovenia have been suspended following allegations of results rigging
sportFour Slovenian officials suspended after allegations they helped violinist get slalom place
News
14 March 2011: George Clooney testifies before the Senate Foreign Relations Committee during a hearing titled 'Sudan and South Sudan: Independence and Insecurity.' Clooney is co-founder of the Satellite Sentinel Project which uses private satellites to collect evidence of crimes against civilian populations in Sudan
people
Arts and Entertainment
Balaban is indirectly responsible for the existence of Downton Abbey, having first discovered Julian Fellowes' talents as a screenwriter
tvCast members told to lose weight after snacking on set
Life and Style
More than half of young adults have engaged in 'unwanted but consensual sexting with a committed partner,' according to research
tech
Life and Style
A binge is classed as four or more alcoholic drinks for women and five or more for men, consumed over a roughly two-hour period
tech
Finacial products from our partners
Property search
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

    BC2

    £50000 - £70000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

    Programme Support, Coms, Bristol, £300-350p/d

    £300 - £350 per day + competitive: Orgtel: My client, a leading bank, is curre...

    (Junior) IT Systems Administrator / Infrastructure Analyst

    £28000 - £32000 per annum + pension, 25 days holiday: Ashdown Group: A highly ...

    Finance Officer

    Negotiable: Randstad Education Birmingham: Randstad Education are seeking a Fi...

    Day In a Page

    A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

    A History of the First World War in 100 Moments

    Peace without magnanimity - the summit in a railway siding that ended the fighting
    Scottish independence: How the Commonwealth Games could swing the vote

    Scottish independence: How the Commonwealth Games could swing the vote

    In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
    Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

    A writer spends a night on the streets

    Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
    Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

    UK's railways are entering a new golden age

    New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
    Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

    Conchita becomes a 'bride' on Paris catwalk

    Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
    Pétanque World Championship in Marseilles hit by

    Pétanque 'world cup' hit by death threats

    This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
    Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

    Why did we stop eating whelks?

    Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
    10 best women's sunglasses

    In the shade: 10 best women's sunglasses

    From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
    Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

    World Cup final: Messi? Mascherano is key for Argentina...

    No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
    Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

    Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

    18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
    The true Gaza back-story that the Israelis aren’t telling this week

    The true Gaza back-story that the Israelis aren’t telling this week

    A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
    A History of the First World War in 100 Moments: The German people demand an end to the fighting

    A History of the First World War in 100 Moments

    The German people demand an end to the fighting
    New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

    New play reveals what Oscar Wilde said at trials

    For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
    Can scientists save the world's sea life from

    Can scientists save our sea life?

    By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
    Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

    Richard III review

    Martin Freeman’s psychotic monarch is big on mockery but wanting in malice