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

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

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Software Development Manager

    £40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

    Ashdown Group: Product Manager - (Product Marketing, Financial Services)

    £30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

    Recruitment Genius: Compliance Assistant

    £13000 per annum: Recruitment Genius: This Pension Specialist was established ...

    Ashdown Group: Market Research Executive

    £23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

    Day In a Page

    Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

    Isis hostage crisis

    The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
    Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

    The runaway buccaneers and the ship full of gold

    Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Maverick artist Grayson Perry backs our campaign
    Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

    Assisted Dying Bill: 'I want control of my life'

    This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
    Move over, kale - cabbage is the new rising star

    Cabbage is king again

    Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
    11 best winter skin treats

    Give your moisturiser a helping hand: 11 best winter skin treats

    Get an extra boost of nourishment from one of these hard-working products
    Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

    Paul Scholes column

    The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
    Frank Warren column: No cigar, but pots of money: here come the Cubans

    Frank Warren's Ringside

    No cigar, but pots of money: here come the Cubans
    Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

    Isis stands strong as its numerous enemies fail to find a common plan to defeat it

    The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

    Virtual reality: Seeing is believing

    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
    Homeless Veterans appeal: MP says Coalition ‘not doing enough’

    Homeless Veterans appeal

    MP says Coalition ‘not doing enough’ to help
    Larry David, Steve Coogan and other comedians share stories of depression in new documentary

    Comedians share stories of depression

    The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
    Has The Archers lost the plot with it's spicy storylines?

    Has The Archers lost the plot?

    A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
    English Heritage adds 14 post-war office buildings to its protected lists

    14 office buildings added to protected lists

    Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Scientists unearthed the cranial fragments from Manot Cave in West Galilee