Derek Pain: Sunshine had cast a shadow over Costa but the portfolio is up

No Pain, No Gain

Some of the stars may have lost just a little lustre but the "no pain, no gain" portfolio made progress in the third quarter of this year. My two recent recruits edged ahead and a couple of loss makers moved into the black.

Whitbread, the leisure group, created a little discomfort as growth at its booming Costa Coffee chain slowed slightly. The hot summer was the negative influence. Many retailers enjoyed a sunshine uplift but coffee parlours, perhaps not surprisingly, lost just a little of their appeal. A return to more typical British weather will, no doubt, get the coffee mugs flowing again.

Even so, in the first 24 weeks of Whitbread's year, coffee sales were up an impressive 20.8 per cent. The chain's continuing overseas expansion – there are now 283 outlets in China – should help to nullify any more hot spells in this country.

With the Premier Inn budget hotels chain advancing sales by 12.1 per cent and the near 400 restaurants, despite a second quarter dip, producing sales growth of 2.5 per cent, total half year sales were a remarkable 12.4 per cent ahead.

I don't know what the stock market expected but the shares responded to the coffee slow down with a nasty hiccup, falling below 3,100p. As I write the price has recovered somewhat although it is still some way below its 3,311p peak.

The group, keen to expand, is investing heavily in hotels and coffee shops. It still has, I believe, a long way to go before saturation in this country is reached. But British coffee growth will obviously get more difficult. Even my local second rate – probably third rate – high street has been graced recently with a Costa parlour. Whether the footfall justifies such expansion remains to be seen.

During the quarter I ditched two unprofitable investments – G4S and Northern Petroleum – and recruited Alkane and Lloyds Bank.

Although Alkane, an alternative power supplier, failed to electrify investors the interim profits were, nevertheless impressive. But the shares had enjoyed a good run ahead of the figures and pre-tax profits of just over £1m against £684,000 were, it seems, largely discounted.

Alkane has an intriguing role in the power game: it captures methane gas from abandoned coal mines and sells the resultant electricity. It also has shale gas licences that it is currently assessing. Chief executive Neil O'Brien comments : "With the very real prospect of a shortfall in energy supply in the UK, we will continue with our strategy of growing output and installed capacity." Stockbrokers Liberum and VSA are keen on the stock with VSA according a 48p target price.

Lloyds, at the behest of the European Union, has granted independence to 630 branches – they are now under the TSB banner. With the Royal Mail flotation apparently scheduled in the next few weeks, it had been assumed the Government would postpone any Lloyds sale until next year. But this week it emerged that part of its stake – 6 per cent – has already been unloaded at 75p to City institutions.

Essenden, the ten-pin bowling group, slipped into a modest loss; the portfolio had to contend with two other loss makers. SnackTime, the vending group, has made a modest impression but the shares remain deep in the doldrums. TEG, the environmental group, is in the red but I remain hopeful it will eventually move into the black.

Brightside, the insurance group, appears to have escaped the clutches of Gibraltar-based predator Markerstudy. When negotiations opened the indicated take out price was 27p. But a subsequent trading statement created a rethink and a price of 20p/22p was suddenly dangled before the Brightside board. Such a valuation failed to impress and Brightside now has to contend with an 11.4 per cent, potentially hostile, shareholder. Further action, possibly involving Markerstudy, is likely to occur.

The portfolio is now valued at nearly £116,000, a gain of around £8,000 since the June review. Don't forget dividends – and dealing costs – are excluded from my calculations.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

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

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

    Recruitment Genius: Compliance Manager

    £40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

    SThree: Talent Acquisition Consultant

    £22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

    Day In a Page

    Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

    Making of a killer

    What motivated a shy student to kill 38 holidaymakers in Tunisia?
    UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

    Just when you thought your commute couldn't get any worse...

    Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
    Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

    The Real Stories of Migrant Britain

    Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
    Cheaper energy on the way, but it's not all sunshine and rainbows

    Cheaper energy on the way, but it's not all sunshine and rainbows

    Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most
    Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

    No grace of God for Katy Perry as sisters act to stop her buying convent

    Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
    Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

    Residents just want water and power in a city chosen to be a ‘smart’ metropolis

    The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
    Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

    Something wicked?

    Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
    10 best sun creams for body

    10 best sun creams for body

    Make sure you’re protected from head to toe in the heatwave
    Wimbledon 2015: Nick Bollettieri - Milos Raonic has ability to get to the top but he must learn to handle pressure in big games

    Nick Bollettieri's Wimbledon files

    Milos Raonic has ability to get to the top but he must learn to handle pressure in big games
    Women's World Cup 2015: How England's semi-final success could do wonders for both sexes

    There is more than a shiny trophy to be won by England’s World Cup women

    The success of the decidedly non-famous females wearing the Three Lions could do wonders for a ‘man’s game’ riddled with cynicism and greed
    How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

    How to stop an asteroid hitting Earth

    Would people cooperate to face a global peril?
    Just one day to find €1.6bn: Greece edges nearer euro exit

    One day to find €1.6bn

    Greece is edging inexorably towards an exit from the euro
    New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

    'Iron Man' augmented reality technology could become reality

    Holographic projections would provide extra information on objects in a person's visual field in real time
    Sugary drinks 'are killing 184,000 adults around the world every year'

    Sugary drinks are killing 184,000 adults around the world every year

    The drinks that should be eliminated from people's diets
    Pride of Place: Historians map out untold LGBT histories of locations throughout UK

    Historians map out untold LGBT histories

    Public are being asked to help improve the map