Derek Pain: SnackTime promises healthy returns with sales rising by 19%

No Pain, No Gain

Shares of SnackTime seem to be stuck in a rut.

Since late September, the vending-machine company has, in effect, doubled its size through an acquisition and produced much improved interim profits. Yet its shares, which stand at about 135p as I write, have not stirred. The market in the stocks of many small caps is exceedingly thin, with many a day passing without a solitary deal in sight. Even so, it is rather strange that SnackTime has attracted so little interest. I would have thought the two announcements would prompt at least a little buying or, perhaps, as some shareholders have profits to lock in, a smattering of selling. But trading has been almost non-existent; the stock market has given the group, capitalised at about £22m, a complete blank.

The No Pain, No Gain portfolio picked up the shares at 119p a little more than a year ago. Since arriving on the stock market in late 2008, they have moved from about 80p to top 180p earlier this year. I last commented on SnackTime when it embraced another vending company called Vendia. The overriding logic behind the deal was that Vendia was big in hot drinks, a section of the market that SnackTime, largely a supplier of cold drinks and snacks, was keen to add to its menu. The near-£11m acquisition was largely a paper deal with locked-in shares and warrants providing most of the bid ammunition.

The group's interim figures, like its most recent full-year results, were distorted by a £1.8m profit achieved on an earlier acquisition. Assets of that particular victim were much higher than the takeover outlay. So, in the half-year to the end of September, pre-tax profits emerged at £201,000, compared with £809,000. But stripping out the special profit, SnackTime, with a 19 per cent sales increase, has clearly made headway and the stockbroker Arbuthnot expects profits of £1.1m for the year.

Another portfolio constituent where trading in shares is negligible is Private & Commercial Finance (PCF), a hire-purchase company. Its shares, however, have given ground, admittedly in thin trading. At about 6p, the company is capitalised at a mere £3.2m, making it the smallest portfolio constituent. A number of influences have helped to destroy value at PCF. At one time, the shares seemed to be heading for 100p. Today such a possibility dwells in the realm of fantasy. Yet shareholders were reminded last month of the group's once high-flying status when a loan-note holder converted into shares at an astonishing 76p a share. It was not the first time that loan notes had been exchanged for a figure well in excess of the then ruling share price.

The company complains that lack of cash is restricting its ability to write business. The chief executive, Scott Maybury, says new lending opportunities exist but the group is experiencing difficulty raising the wherewithal. So it is concentrating on what it calls "good-quality business" and improving margins. Nevertheless, tight credit conditions are clearly affecting the business. Next month it will announce interim profits which should be in line with most expectations. For the full year, about £500,000 is expected. One lone stockbroker analyst was at one time predicting more than £1m, but has since fallen into line with the £500,000 view.

The portfolio recruited PCF early in 2007 at 19.5p. I took the view that the group had overcome its difficulties and represented an interesting recovery play. How wrong can you be? I have in recent times threatened to dump the shares and, if the interim figures turn out to be disappointing, I will feel obliged to do so.

I note that Plus-traded English Wines Group (EWG), which was evicted from the portfolio last month, has since reported a 30 per cent increase in its harvest. The chief executive, Frazer Thompson, says the crop should contribute to higher sales of sparkling wine from 2012 and should help to meet demand for still wines from next summer. One of the obstacles EWG has encountered is an inability to meet demand. I sold the shares at 13.5p. They are now trading at 12p.

Finally G4S, the security giant recruited earlier this year. Its shares have fallen below my 264p buying price but the stockbroker Panmure Gordon expects them to improve. It has a 315p target compared with the current level of about 250p.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

The Banksy image in Folkestone before it was vandalised
Life and Style

Sales of the tablet are set to fall again, say analysts

football West Brom vs Man Utd match report: Blind grabs point, but away form a problem for Van Gaal
Arts and Entertainment
Gotham is coming to UK shores this autumn
tvGotham, episode 2, review
Arts and Entertainment
Bloom Time: Mira Sorvino
tvMira Sorvino on leaving movie roles for 'The Intruders'
First woman: Valentina Tereshkova
peopleNASA guinea pig Kate Greene thinks it might fly
Brian Harvey turned up at Downing Street today demanding to speak to the Prime Minister

Met Police confirm there was a 'minor disturbance' and that no-one was arrested

Arts and Entertainment
George Lucas poses with a group of Star Wars-inspired Disney characters at Disney's Hollywood Studios in 2010

George Lucas criticises the major Hollywood film studios

Chris Grayling, Justice Secretary: 'There are pressures which we are facing but there is not a crisis'

Does Chris Grayling realise what a vague concept he is dealing with?

Life and Style
A street vendor in Mexico City sells Dorilocos, which are topped with carrot, jimaca, cucumber, peanuts, pork rinds, spices and hot sauce
food + drink

Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets

Life and Style
The charity Sands reports that 11 babies are stillborn everyday in the UK
lifeEleven babies are stillborn every day in the UK, yet no one speaks about this silent tragedy
Blackpool is expected to become one of the first places to introduce the Government’s controversial new Public Space Protection Orders (PSPOs)

Parties threaten resort's image as a family destination

Life and Style
Northern soul mecca the Wigan Casino
fashionGone are the punks, casuals, new romantics, ravers, skaters, crusties. Now all kids look the same
Life and Style

I Am Bread could actually be a challenging and nuanced title

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

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Customer Service Executive / Inbound Customer Service Agent

    £18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

    ASP.NET Web Developer / .NET Developer

    £60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

    Operational Risk Manager - Asset Management

    £60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

    Project Coordinator - 12 month contract

    £27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...

    Day In a Page

    Two super-sized ships have cruised into British waters, but how big can these behemoths get?

    Super-sized ships: How big can they get?

    Two of the largest vessels in the world cruised into UK waters last week
    British doctors on brink of 'cure' for paralysis with spinal cord treatment

    British doctors on brink of cure for paralysis

    Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
    Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

    Salisbury ranked seventh in world’s best tourist cities

    The city is home to one of the four surviving copies of the Magna Carta, along with the world’s oldest mechanical clock
    Let's talk about loss

    We need to talk about loss

    Secrecy and silence surround stillbirth
    Will there be an all-female mission to Mars?

    Will there be an all-female mission to Mars?

    Women may be better suited to space travel than men are
    Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

    'They poured water on, then electrified me...'

    If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
    James Wharton: The former Guard now fighting discrimination against gay soldiers

    The former Guard now fighting discrimination against gay soldiers

    Life after the Army has brought new battles for the LGBT activist James Wharton
    Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

    Panic over Ebola threatens to infect the midterms

    Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
    Premier League coaches join the RSC to swap the tricks of their trades

    Darling, you were fabulous! But offside...

    Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
    How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

    How to dress with authority

    Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
    New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

    New book on Ian Curtis sheds fresh light on the life of the late singer

    'Joy Division were making art... Ian was for real' says author Jon Savage
    Sean Harris: A rare interview with British acting's secret weapon

    Sean Harris: A rare interview with British acting's secret weapon

    The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
    Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

    Tim Minchin interview

    For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
    Boris Johnson's boozing won't win the puritan vote

    Boris's boozing won't win the puritan vote

    Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
    Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

    Tim Wheeler: Alzheimer's, memories and my dad

    Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album