It may be an isolated view but I have managed to draw just a little encouragement from the yearly report of SnackTime, the undoubted dog of the "no pain, no gain" portfolio.
As I said in my last column, the time for selling the shares is long gone. They did manage a modest gain last week but I feel it was due to the arrival of a near 4 per cent shareholder rather than any enthusiasm for the accounts and the comments of relatively new chairman, Jeremy Hamer, parachuted in to reshape the troubled vending machine group. He was previously involved with two profitable portfolio investments – Glisten and Inter Link Foods.
The appearance of one Boris Belotserkovsky with a 3.96 per cent holding, following sales by former chief executive Blair Jenkins, whose stake, as at the end of March, must have been a restraining influence, probably created more interest.
Now to the Hamer observations. Current trading is in line with his expectations and he anticipates "some improvement" in the current year. And he adds the changes instituted are "all underpinning our optimism of a significant step towards recovery".
Clearly SnackTime, ranking as the country's third largest vending group, has cut overheads and reorganised many of its operations. Last year's loss before tax was a staggering £8.25m. With turnover down 7.6 per cent to £20.5m the trading loss was £1.13m. But a host of special charges devastated the pre-tax figure. Exceptional costs amounted to £6.4m, including non-cash charges of £5.7m.
Not, then, a happy scene. But the way the group has reorganised must be a promising sign. And a cash raising earlier this year comprising new banking facilities and a loan note issue has provided the necessary comeback ammunition.
The group arrived on the stock market just before Christmas in 2007 by selling shares at 144p a time, raising £3m. It then had a capitalisation of £10m. Like so many companies inspired by the benefits of a stock market presence it appeared to expand too quickly.
At one time it was valued at more than £20m. Its capitalisation is now a mere £1.7m. The portfolio, unfortunately, got involved in September, 2009. It paid 119p a share and I was impressed as the price moved towards 200p. But two quid proved elusive. Instead the price declined – and declined. I should have sold in the long retreat. I'm left hoping Mr Hamer and his team can make a decent fist of it and get the shares rolling again. Obviously the portfolio will be lucky to get its money back but I hope the Hamer influence will allow a dignified retreat and even a worthwhile cash sum.
In recent times the shares have been as high as 16p. But around 4p has been a familiar sight. The price, as I write, is 10.5p – up just 0.25p.
SnackTime resides on the Alternative Investment Market (AIM). The Stock Exchange junior share market is likely to be given a fillip by the Government decision to allow AIM shares to qualify for inclusion in individual saving accounts (Isas) by the autumn. With the abolition of stamp duty on AIM shares due to come into force next year, the arrival of this acceptability can only increase the appeal of the junior market.
Whether the often unsophisticated investor who likes the Isas wrap is suitable for the more risky temptations offered by AIM is a debating point. After all, AIM has never recovered from the halcyon days it enjoyed in the dot.com boom at the turn of the century. Indeed, it is a long way from the all-time peak it achieved in the hi-tech madness whereas the main market, as measured by the benchmark Footsie index, is at least, in admittedly distant, sight of its dot.com inspired record. Indeed, in some quarters, there are even worries that the internet crash could be repeated. Such a development would represent a boom-to-bust implosion in some of the more speculative stocks.
Indisputably, the vast majority of the more risky stock market elements exist on AIM. The turn-of-the-century hysteria created some quite unbelievable ramps as many investors, not just the inexperienced, scrambled for a slice of the frantic action.