Derek Pain: The trio that's keeping me in high spirits

No Pain, No Gain

Latest trading updates from the no pain, no gain portfolio have been remarkably enthusiastic. A trio of members - Booker, Mears and Spirit Pub Co - have kept up the encouraging tone set nearer the start of the year by constituents Animalcare and TEG.

It seems that the portfolio's "high five" are maintaining the exuberant nature of the stock market's run of New Year trading statements. True, once powerful names on the high street have encountered debilitating difficulties and the nation's economic revival may be causing some concern, but the overall City picture is considerably brighter than many anticipated. No wonder the Footsie has hit its highest level for some years.

Investors have come to expect strong performances from the Booker cash and carry group. It did not disappoint. Third quarter sales rose 3.1 per cent, pushing the shares ahead to around 100p. I believe they would be higher but for the uncertainty created by the Competition Commission's examination of the group's £140m take-over of the rival Makro chain. The Commission is unlikely to report for a few months. Charles Wilson, Booker's chief executive, seems optimistic the deal will eventually be cleared. He declares: "We are excited about the opportunity of Booker and Makro coming together". Makro has found the going tough in recent years and the Wilson team clearly have high hopes of quickly reviving it.

Mears, the support services group, seems to have regained investors' enthusiasm. Its trading update helped lift the shares, as I write, to around the 350p mark, not so far from the 385p high hit in the group's halcyon days earlier this century when the shares were stock market darlings.

David Miles, chief executive, talks about a "solid" trading performance in both core operations – social housing and home care.

Integration of loss-making Morrison Facilities Services is going well and the £24m acquisition has, with more contract wins, helped lift the group's social housing order book from £2.6bn to £3.8bn. Its bid pipeline is around £3bn.

The only fly in the ointment is the previously profitable mechanical and electrical division, now expected to be loss-making over the year. However, it is a relatively small part of the group.

Spirit shares are around their highest since the group was demerged from the struggling Punch Taverns. Over the first 20 weeks of its year chief executive Mike Tye describes trading as tough but adds the Christmas session was strong. The group's managed pubs increased sales by 2.3 per cent. The leased division was less successful as rent reviews fell due. Many of the rents were previously fixed when the pub business was riding high. Spirit, like a few other pub owners, is experimenting with replacing some lease contracts with franchise deals. So far it has invested in eight franchised outlets and is still selling unwanted pubs. Stockbroker Shore Capital says buy, forecasting pre-tax profits of £56.8m.

Unlike Animalcare and TEG, where the portfolio is suffering losses on its investments, the three latest updaters are in the money. Booker was selected four years ago at 24.5p; Mears nearly a year earlier at 272p; and Spirit, now around 67p, arrived in August 2011 at 42p.

Mears is one of the few shares to re-visit the portfolio. The support services group was an early recruit. Shares were acquired at 23p. I had decided to buy them at 18p and was dismayed by their sudden strength. Indeed I almost shelved the purchase as I wondered whether the group had become too expensive. In the end the deal went ahead. I'm glad it did as the portfolio sold the shares a few years later at 84p. A nice little earner, as they say.

The only other shares to make double appearances are My Home International, a franchise group with irons in many fires, and Essenden. My Home went belly up although the portfolio ended up comfortably in the black. Essenden, a ten pin bowling group, is my last recruit, arriving late last year. It featured earlier as the Georgica bowling alleys and snooker halls business and was also a money-maker.

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

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: Content Writer - Global Financial Services

    £25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

    Recruitment Genius: Web Developer - PHP

    £35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

    Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

    £15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Loan Underwriter

    £18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

    Day In a Page

    A nap a day could save your life - and here's why

    A nap a day could save your life

    A midday nap is 'associated with reduced blood pressure'
    If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

    If men are so obsessed by sex...

    ...why do they clam up when confronted with the grisly realities?
    The comedy titans of Avalon on their attempt to save BBC3

    Jon Thoday and Richard Allen-Turner

    The comedy titans of Avalon on their attempt to save BBC3
    The bathing machine is back... but with a difference

    Rolling in the deep

    The bathing machine is back but with a difference
    Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

    Conservatives plot a motoring revolution

    Draft report reveals biggest reform to regulations since driving test introduced in 1935
    The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

    The Silk Roads that trace civilisation

    Long before the West rose to power, Asian pathways were connecting peoples and places
    House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

    The honours that shame Britain

    Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
    When it comes to street harassment, we need to talk about race

    'When it comes to street harassment, we need to talk about race'

    Why are black men living the stereotypes and why are we letting them get away with it?
    International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

    International Tap Festival comes to the UK

    Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
    War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

    Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

    Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
    Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

    'A subversive brothel keeper and Communist'

    Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
    Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

    BBC heads to the Californian coast

    The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
    Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

    Victorian fraudster who shook the Bank of England

    Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
    Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

    Car hacking scandal

    Security designed to stop thieves hot-wiring almost every modern motor has been cracked
    10 best placemats

    Take your seat: 10 best placemats

    Protect your table and dine in style with a bold new accessory