Derek Pain: Pride of its alley lines up the skittles and sends them flying

 

Essenden, the tenpin bowling and family entertainment group, has suddenly emerged as a stock market star.

The Aim-traded shares, which only a few months ago were bowling along at near 20p, have topped the 100p mark and seem set for an exciting future.

Uplifting trading, hopes of what has been described as a "transformational" deal and a rewarding way of eliminating loan stock are largely responsible for the upsurge.

The no pain, no gain portfolio descended on the shares at the back end of 2012 at 24p. At the time I was impressed with the way Nick Basing, chief executive since 2009, was reshaping the business and I felt the market was overlooking the potential recovery play offered by the shares.

The arrival of Essenden represented a second time around for the portfolio. In an earlier incarnation, when the company had been known as Georgica, it had been a profitable investment. But after the shares were sold by the portfolio, losses occurred.

Pre-tax profits last year were £3.6m against a £71,000 loss in the year before. Annual sales rose by 0.6 per cent, with an 8.3 per cent increase in the final quarter. In the first 11 weeks of this year, the advance was 13.5 per cent.

Now to the loan stock. It is to be erased by exchanging 1.33 shares for each unit. The notes are traded on the fringe ISDX market. The last price I saw was 80p, although it has been nearer 20p. Extinguishing the stock should enhance takeover prospects. I suspect a target is already lined up.

Mr Basing talks of a "defining" year ahead and points out that the loan stock is a "significant barrier to securing funding", presumably for the acquisition. Capitalisation is now £21.5m.

The loan stock was issued to shareholders on a one-for-one basis. The idea was to return cash through redemptions. But the plan failed after the group ran into trouble and was unable to deliver. The traded price of the notes, issued at the equivalent of 100p, collapsed and many shareholders regarded them as little more than "dead" money.

Another portfolio constituent, Mears, the support services group, has had a good year. But for exceptional charges – largely relating to the sale of a loss-making business and bedding down acquisitions –the pre-tax figure would have emerged at £36.6m against £29m the year before.

After allowing for the special costs, the "true" pre-tax figure is up 9 per cent at £21.7m. The dividend is lifted 10 per cent to 8.8p a share. Revenue was a record £898.2m and should increase in the current year with 92 per cent of forecast income already in the bag.

The order book is £3.8bn, with the two divisions, social housing and home care, continuing to attract increasing attention.The shares are, as I write, about 500p against the 272p the portfolio paid in March 2008.

Finally to Spirit Pub Co, the chain that relies heavily on its managed estate; the shares, recruited at 42p in August 2011, are now about 81p. Stockbroker analysts expect them to move higher, with Peel Hunt saying it is looking for 95p while Numis is settling for a 110p tag.

In a trading statement, the group said managed turnover over an eight-week period was 6.1 per cent higher and leased income advanced 6.0 per cent. Over 28 weeks the improvement was 4.8 per cent (managed) and 2.6 per cent (leased). George Osborne's generosity over drink taxes should keep sales rolling along.

yourmoney@independent.co.uk

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

News
i100
News
Bobbi Kristina Brown, daughter of the late singer Whitney Houston, poses at the premiere of
people
News
people
News
The frequency with which we lie and our ability to get away with it both increase to young adulthood then decline with age, possibly because of changes that occur in the brain
scienceRoger Dobson knows the true story, from Pinocchio to Pollard
Voices
The male menopause: those affected can suffer hot flushes, night sweats, joint pain, low libido, depression and an increase in body fat, among other symptoms
voicesSo the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Life and Style
health
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

    Recruitment Genius: DBA Developer - SQL Server

    £30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Customer Service Administrator

    £13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

    Recruitment Genius: Dialler Administrator

    £22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

    Ashdown Group: Contracts Manager - City of London

    £35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

    Day In a Page

    Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

    US betrayal of old ally brings limited reward

    Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
    VIPs gather for opening of second Suez Canal - but doubts linger over security

    'A gift from Egypt to the rest of the world'

    VIPs gather for opening of second Suez Canal - but is it really needed?
    Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

    Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

    Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
    The male menopause and intimations of mortality

    Aches, pains and an inkling of mortality

    So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
    Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

    'How can I possibly be on the list with these writers I have idolised?'

    Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
    Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

    Bettany Hughes interview

    The historian on how Socrates would have solved Greece's problems
    Art of the state: Pyongyang propaganda posters to be exhibited in China

    Art of the state

    Pyongyang propaganda posters to be exhibited in China
    Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

    Vegetarian food gets a makeover

    Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
    The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

    The haunting of Shirley Jackson

    Was the gothic author's life really as bleak as her fiction?
    Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

    Bill Granger's seaside-inspired recipes

    These dishes are so easy to make, our chef is almost embarrassed to call them recipes
    Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

    Tourists are limp, leaderless and distinctly UnAustralian

    A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
    Blairites be warned, this could be the moment Labour turns into Syriza

    Andrew Grice: Inside Westminster

    Blairites be warned, this could be the moment Labour turns into Syriza
    HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

    The mystery of Britain's worst naval disaster is finally solved - 271 years later

    Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
    Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

    'I saw people so injured you couldn't tell if they were dead or alive'

    Nagasaki survivors on why Japan must not abandon its post-war pacifism
    Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

    The voter Obama tried hardest to keep onside

    Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen