Derek Pain: Marston's makes play for Whitbread territory

Bo Pain, No Gain

Two constituents of the no pain, no gain portfolio will soon engage in head-to-head competition. This week's decision by brewer and pub owner Marston's to enter the budget hotel market will bring it into direct confrontation with fellow member Whitbread, which runs the nation's largest collection of value-for-money hotels, Premier Inns.

Marston's is teaming up with Whitbread's arch rival, the Dubai-owned Travelodge chain, to create same-site hotels and pub/restaurants, a formula already beloved by Whitbread. The partners have apparently earmarked £40m for the venture and the first joint operation – with Travelodge running the hotel and Marston's the pub/restaurant – will appear next year at Wincanton, Somerset.

The partners hope to develop around 15 sites in the next few years.

This summer, Marston's raised £176m through a heavily discounted rights issue. It said then it planned to build up to 25 pubs a year. Clearly the Travelodge link is related to this expansion. Jeffrey Harwood, an analyst at Oriel Securities, estimates that the building programme could eventually add £18m to profits.

The brewer rolled out a moderately encouraging trading statement in August, but the portfolio's other booze investment, Pubs'n'Bars, remains under the influence of the more depressed pubs environment. Its style of pub, relying on drink with a modest food input, has found the going particularly tough. Still, chairman Keith Chapman is "hopeful" that the trading climate is improving. Interim loss is £691,000 (against a £128,000 profit) with changes to the estate structure and new supply arrangements contributing to the latest setback.

The heavily indebted chain is still talking to its bankers with Mr Chapman saying they "are showing a great deal of understanding and the utmost co-operation in these difficult times".

In what has been a busy few days for portfolio constituents, Clarity Commerce Solutions, which joined earlier this year at 29.5p, is the latest company to indulge in a private share placing, raising £2.7m. The privileged few subscribers, including venture capital funds which pumped in £1.7m, purchased shares at 40p, compared with a recent high of 50p and 46p just before the placing was revealed.

The company, providing software for the entertainment, hospitality, leisure and retail sectors, accompanied the cash-raising with an upbeat trading statement that mentioned a "positive" outlook and said trading was running in line with expectations.

I have complained often about private placings that leave existing shareholders out in the cold. It is, however, difficult to get too upset with Clarity. Rights issues, which give all shareholders a chance to join in the cash-raising exercise and avoid dilution, are more expensive and take longer than a placing. With such a relatively small sum being pulled in, mainly to reduce debt and strengthen the balance sheet, a full blown rights would have been counter-productive.

Hargreaves Services, covering coal mining, transport and waste disposal, has also been involved in a share placing. But the sales enriched two directors and some senior managers.

Chief executive Gordon Banham sold one million shares and director Kevin Dougan 529,000. The price was 650p.

The shares went to City institutions that, it seems, had been clamouring for more stock. It was Banham's first disposal since he acquired his holding more than five years ago. His stake is now 11.4 per cent.

Another constituent, Patsystems, a supplier of tailored software to various exchanges around the world, has added the newly established Indonesia Commodities and Derivatives Exchange to its list of clients. The shares, however, have yet to perform since their recruitment.

Mears, the social housing and home care group that could claim to be the portfolio's longest-serving constituent, has won the support of stockbroker Brewin Dolphin. Analyst Mark Fleetwood says the shares are a buy and placed a 362p target on them.

He adds: "Mears in our view has unfairly been left behind, but is in excellent shape and is at an exciting stage in its development." His comments helped push the shares above 300p but they have since slipped a few coppers.

Mears joined the portfolio in its early days at 23p. The shares were sold at 71.5p; the price subsequently hit 385p and I recaptured them at 272p. They have since fallen below 200p, but then staged a recovery.

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

Sport
sportWWE latest including Sting vs Triple H, Brock Lesnar vs Roman Reigns and The Undertaker vs Bray Wyatt
Arts and Entertainment
Louis Theroux: By Reason of Insanity takes him behind the bars again
tvBy Reason of Insanity, TV review
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Arts and Entertainment
tvPoldark, TV review
Finacial products from our partners
Property search
  • Get to the point
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

    Recruitment Genius: Retirement Coordinator - Financial Services

    Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

    Recruitment Genius: Annuities / Pensions Administrator

    Negotiable: Recruitment Genius: You will be the first point of contact for all...

    Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

    £18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

    Ashdown Group: Learning and Development Programme Manager

    £35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

    Day In a Page

    Election 2015: How many of the Government's coalition agreement promises have been kept?

    Promises, promises

    But how many coalition agreement pledges have been kept?
    The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

    The death of a Gaza fisherman

    He built his own reef, and was fatally shot there by an Israeli gunboat
    Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

    Saudi airstrikes are fuelling the Gulf's fire

    Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
    Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

    The only direction Zayn could go

    We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
    Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

    Spells like teen spirit

    A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
    Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

    If fashion is a cycle, this young man knows just how to ride it

    British designer Jonathan Anderson is putting his stamp on venerable house Loewe
    Number plates scheme could provide a licence to offend in the land of the free

    Licence to offend in the land of the free

    Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
    From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

    From farm to fork in Cornwall

    One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
    Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

    Robert Parker interview

    The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
    Don't believe the stereotype - or should you?

    Don't believe the stereotype - or should you?

    We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
    How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

    How to make your own Easter egg

    Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
    Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

    Bill Granger's twist on Easter Sunday lunch

    Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
    Joe Marler: 'It's the way I think the game should be played'

    Joe Marler: 'It's the way I think the game should be played'

    The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
    Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

    Cricket World Cup 2015

    Has the success of the tournament spelt the end for Test matches?
    The Last Word: Justin Gatlin knows the price of everything, the value of nothing

    Michael Calvin's Last Word

    Justin Gatlin knows the price of everything, the value of nothing