Derek Pain: Time is running out as I lose patience with my four losers

Should I dump the under-performers from the No Pain, No Gain portfolio? I am suffering four loss- makers and growing increasingly exasperated with three of them.

My quartet of "delinquents" are Animalcare, a veterinary products group; Brightside, an insurance broker; TEG, an environmental group; and SnackTime. Animalcare and TEG have entered 2014 with less than exhilarating trading reports and Brightside has been prompted into a share placing raising £6.8m at a lowly 15p a time. SnackTime, where the portfolio is suffering a particularly daunting reverse, is the subject of a possible takeover bid and, as I explained last week, there seems little point in selling.

Animalcare and TEG were acquired in November 2011 and Brightside in the summer of 2012. A few times Animalcare has managed to display a modest profit from the 171p buying price but following its latest trading statement is, as I write, residing at 155p. I cannot recall TEG ever showing a profit and against an 8p purchase is now around 4p. Brightside arrived at 18.5p and bumps along at 16.75p.

I dealt with the vets last month but TEG, a week ago, managed to dash my hopes that it was near to achieving the performance I had long anticipated. Its half-year comments in September were relatively reassuring with losses reduced substantially and turnover much higher. There were, however, a few flies in the ointment such as contract delays and it would seem they have continued and could blight the full year's results. TEG seems confident that things will improve; I hope they will but my patience is growing a little thin.

Brightside is a sad example of a failed takeover bid. I have several times considered selling the shares but resisted the temptation. A Gibraltar-based insurance group called Markerstudy last year had designs on the company. The stock market envisaged a bid at around the 27p mark. But it seems Brightside was not trading at the level the City – and Markerstudy – expected.

There are suggestions the possibility of a change of ownership may have damaged its operations and suddenly the proposed bid was reduced to a price in the region of 20p/22p. Not surprisingly the talks collapsed and the shares dropped to near the portfolio's buying level. The placing, however, has sent them even lower.

The extra cash was initially needed to "prevent the possibility" of breaching a bank covenant. The group suffered a "short-term cash shortfall" but expects to get back on a more even keel as the year progresses. Still it has warned that past year profits will be hit, possibly down 20 per cent. Could Markerstudy be tempted to return? I doubt if it took part in the placing so its 12 per cent stake will have been diluted. Even so, under City takeover rules it will soon be able to renew its interest and even its 20p/22p valuationcould look attractive.

I have been accused of not being ruthless enough when it comes to poor performers. I must admit a certain reluctance to lock in a loss, particularly when there is a chance of eventual redemption. The portfolio is a long-term investor and short-term considerations are ignored. Still Animalcare and TEG have had plenty of time to get their acts together. I cannot allow them much more leeway. For Brightside there remains the possibility of a bid, although it is always unwise to rely on one.

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?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Sales Assistant / Buyer

    £15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

    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...

    Day In a Page

    Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

    Greece referendum

    Greeks say 'No' to austerity and plunge Europe into crisis
    Ten years after the 7/7 terror attacks, is Britain an altered state?

    7/7 bombings anniversary

    Ten years after the terror attacks, is Britain an altered state?
    Beautiful evening dresses are some of the loveliest Donatella has created

    Versace haute couture review

    Beautiful evening dresses are some of the loveliest Donatella has ever created
    No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

    No hope and no jobs in Gaza

    So the young risk their lives and run for it
    Fashion apps: Retailers roll together shopping and social networking for mobile customers

    Fashion apps

    Retailers roll together shopping and social networking for mobile customers
    The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

    Gaping hole at the heart of the European Union

    Treatment of Greece has shown up a lack of genuine legitimacy
    Number of young homeless in Britain 'more than three times the official figures'

    'Everything changed when I went to the hostel'

    Number of young homeless people in Britain is 'more than three times the official figures'
    Compton Cricket Club

    Compton Cricket Club

    Portraits of LA cricketers from notorious suburb to be displayed in London
    London now the global money-laundering centre for the drug trade, says crime expert

    Wlecome to London, drug money-laundering centre for the world

    'Mexico is its heart and London is its head'
    The Buddhist temple minutes from Centre Court that helps a winner keep on winning

    The Buddhist temple minutes from Centre Court

    It helps a winner keep on winning
    Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

    Is this the future of flying?

    Battery-powered planes made of plastic, and without flight decks
    Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

    Isis are barbarians

    but the Caliphate is an ancient Muslim ideal
    The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

    Curse of Brink's Mat strikes again

    Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
    Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

    'The ministers talk to us about miracles'

    Why Greeks are cynical ahead of the bailout referendum
    Call of the wild: How science is learning to decode the way animals communicate

    Call of the wild

    How science is learning to decode the way animals communicate