Derek Pain: I've decided I'm looking on the Brightside

No Pain, No Gain

At long last I have added to the no pain, no gain portfolio. I had hoped to enlist two newcomers this week but at the last minute I was suddenly assailed by doubts about one of my intended recruits, prompting a hurried reappraisal. I have, however, decided to press ahead with the other addition, even though it lifts the strength of my little share exercise to "unlucky 13", and I am, as readers know, a superstitious old-timer.

So, braving the fates, I have alighted on Brightside, an insurance broking group capitalised at £84.4m with its AIM-traded shares standing at 18.5p. It has an enviable profits record and could join the dividend-paying fraternity next month when it is due to produce interim figures. Reporting on the first five months of the year in June it described trading as "robust".

The group covers a wide range of insurances and has established recent links with retailers Asda and Debenhams, although the main thrust is through the internet and call centres. Last year Brightside sold 440,000 vehicle policies, some 60 per cent online. The car insurance industry, I realise, faces a series of problems. Phantom whiplash claims and fake accidents seem to be too frequent occurrences. But the wet summer could be beneficial for brokers as it underlines the value of investing in a home policy.

Brightside seems particularly competent in weeding out unsuitable applicants. Many insurers have suffered, particularly through online trading. But the broker boasts about its screening system that may result in more than usual cancellations but "significantly" improves results.

In another guise it arrived on AIM in January 2007; it was then involved in debt management and insolvency. Many of its interests were sold and what remained of the quoted vehicle descended on an insurance broking business that is now 11 years old. The broker started with a count of four; today Brightside employs 860. "Small firms can prosper," commented chief executive Martyn Holman.

Profits for the full year are expected to emerge at around £17.8m with, perhaps, £19.5m next year. Last year's figure was £13.9m. The shares, like most financials in these days of mounting money problems, have experienced an eventful time. In the days when the group was reshaping, and before the full extent of the world's financial crisis became apparent, the price was about 50p. Since then it has twice fallen to around 10p although the shares have been as high as 28p in the past year.

I suppose adding any financial share to the portfolio in these tortuous times could raise a few eyebrows. But Brightside, as a broker is not subject to underwriting risks, looks to be on a roll and most vehicle owners regard insurance as essential, even if a growing underclass try to avoid the necessary expenditure. The shares appear undervalued and if Brightside joins the dividend list — and a maiden interim could be the start of a steady payments stream — they should gather more support.

The company I held back on recruiting is in the oil industry. I may yet enlist the shares but need more information before deciding.

Now to a former portfolio resident, Lighthouse, an accountancy and wealth management group. I was pleased to see that shareholders rejected the proposal to abandon AIM and leave the company in what can only be described as a sort of share wilderness. Shareholders representing 53 per cent of the votes cast came out against the delisting plan.

I fail to see why a company that has been on AIM for a dozen years and is still profitable and dividend paying should want to go off market. Such a move, which was not prompted by any financial necessity, was a blow to shareholders who had acquired their shares through the open-to-all avenue of the stock market. The cost and time that have to be devoted to AIM membership are onerous but the firm was aware of these conditions when it floated.

Chairman David Hickey accepted defeat with good grace. He said: "The business remains in good shape, both cash positive and debt free. Looking forward, the group will continue to comply with the AIM rules and the board will continue to respect shareholder preferences."

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

Suggested Topics
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Experienced Recruitment Consultant

    £20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

    Recruitment Genius: Collections Agent

    £14000 - £16000 per annum: Recruitment Genius: This company was established in...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

    Day In a Page

    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
    Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

    The Arab Spring reversed

    Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
    King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

    Academic claims King Arthur was real - and reveals where he lived

    Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
    Who is Oliver Bonas and how has he captured middle-class hearts?

    Who is Oliver Bonas?

    It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
    Earth has 'lost more than half its trees' since humans first started cutting them down

    Axe-wielding Man fells half the world’s trees – leaving us just 422 each

    However, the number of trees may be eight times higher than previously thought
    60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

    60 years of Scalextric

    Model cars are now stuffed with as much tech as real ones
    Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

    Why are we addicted to theme parks?

    Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
    Tourism in Iran: The country will soon be opening up again after years of isolation

    Iran is opening up again to tourists

    After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
    10 best PS4 games

    10 best PS4 games

    Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
    Transfer window: Ten things we learnt

    Ten things we learnt from the transfer window

    Record-breaking spending shows FFP restraint no longer applies
    Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

    ‘Can we really just turn away?’

    Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
    Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

    Nine of Syria and Iraq's 10 world heritage sites are in danger...

    ... and not just because of Isis vandalism
    Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

    Girl on a Plane

    An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
    Why Frederick Forsyth's spying days could spell disaster for today's journalists

    Why Frederick Forsyth's spying days could spell disaster for today's journalists

    The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent