Derek Pain: Lean return on promising Green CO2 merger
No Pain, No Gain
Saturday 01 August 2009
Green CO2 joined the no pain, no gain portfolio more by accident than design. In 2003 I alighted on what I thought was a promising online group called Wyatt. How wrong can you be? It turned out to be one of the high- tech players that did not make it. Unrewarding deals eroded the shares. They slumped to 2p from my 27.5p buying price.
Another example, I'm afraid, of hanging on, hoping for the best. Mind you, it was not all downhill. At one time Wyatt seemed about to clinch an intriguing takeover and its shares appeared set to record a profit for the portfolio. But no. The deal fell through and, despite some vigorous endeavours, the decline gathered pace.
Green CO2 came into the picture through a reverse deal achieved earlier this year. It is probably not the type of business in which I would have elected to invest. But once again, with the price so low, there seemed little point in selling. Under portfolio rules, the cash call that accompanied the takeover had to be ignored.
The old Wyatt, which changed its name to Green CO2, went into the merger with a clutch of online operations, some of which were profitable. Its partner is involved in the fledgling business of providing Home Information Packs and energy certificates. The combined group has yet to issue a trading update.
But it has raised more cash. One of those private placings which I detest has produced £287,000. Still this is one exercise I cannot complain about. After all, at the time of the merger the group attempted to raise approaching £900,000 through a placing and open offer to shareholders.
The placing pulled in the expected £517,000 but the offer produced a mere £44,000 with a miserable 12.6 per cent take up. So the latest cash call at 1.25p, the same price as the offer, merely plugged the money gap created by reluctant shareholders.
Bob Holt, Green's chairman, and clients of two stockbrokers, subscribed to the issue.
Holt runs another portfolio constituent, the rather more successful Mears, which is engaged mainly in social housing and domiciliary care and is seemingly in a strong position to resist recessionary damage. Its profit record is encouraging and another strong performance is expected this year. Interim figures are due later this month.
The only drag could be the small mechanical and electrical division that mostly serves the private housing market. Yet, in its April trading update, Mears referred to the division's niche appeal and seemed confident about its prospects. The social housing and home care operations are sheltered by long-term contracts with a range of local authorities and other public bodies.
Care is a relatively new activity. Holt believes it could develop as impressively as social housing as more and more organisations are forced to outsource their requirements in the battle to shave costs.
Mears has been particularly active on the housing front. It recently clinched a £200m, 10-year deal with Brighton and Hove City Council, which lifted this year's total order intake to approaching £400m. In April the group had already accumulated 92 per cent of this year's forecast revenue.
The shares were among the portfolio's early arrivals. They were picked up at 23p and sold at 71.5p. An extended holiday that would coincide with what appeared to be a dodgy stock market prompted me to crystallise the not-insignificant profit. I returned in March last year at 272p. The price is now around 255p.
Finally Nighthawk Energy, a constituent that seems to attract much of my attention these days. Although I was assured last week that there were no short-term funding requirements, the group has since rolled out yet another cash-raising share placing. It has pulled in £22.4m at 35p a share.
So shareholders suffer more dilution. The group arrived on AIM in March 2007, raising £10m at 25p in the process. It has since indulged in two placings at 20p and another at 46p. Its latest exercise lifts its placing cash to £48m.
The money is needed for exploration and development. Nighthawk remains a promising oil play. But is it fair to dilute existing shareholders so much? Surely, with a £22.4m call a rights issue (or placing and open offer) should have been arranged.
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
Bargain Hunter: Exclusive discount on a SmartGlider - a self-balancing electric scooter
My Tinder date asked for a refund when I declined a second meet up
Number of parents moving to their desired school catchment area is increasing, according to Santander research
Bank-beating exchange rates on your international payments
Be warned of the dirty tricks the bailiffs pull
- 1 If these extraordinarily powerful images of a dead Syrian child washed up on a beach don't change Europe's attitude to refugees, what will?
- 2 Senior British politicians tell David Cameron: When dead children are being washed up on beaches – it's time to act
- 3 Make your voice heard: Sign The Independent's petition to welcome refugees
- 4 Refugee crisis: Aylan's life was full of fear - in death, he is part of 'humanity washed ashore'
- 5 German police forced to ask public to stop bringing donations for refugees arriving by train
Senior British politicians tell David Cameron: When dead children are being washed up on beaches – it's time to act
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don't change Europe's attitude to refugees, what will?
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
Britain to take more refugees as Cameron bows to pressure after more than 100,000 back our campaign
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
iJobs Money & Business
£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...
£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...
Day In a Page
With four bedrooms, this spacious maisonette in a mid-terrace period-style house in Holland Road is well-maintained and offers high ceilings and period features.
The terraces of this two-bedroom penthouse apartment offer panoramic views that stretch over fifty miles from the cliffs of Beachy Head.
In the heart of the coastal village of Mumbles and moments from the pier, this five-bedroom Victorian terrace is set over three floors and retains many original features.
In a sandbanks location, moments from the beach, this three-bedroom apartment has a large open-plan living area and a south-west facing balcony.
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.