No Pain, No Gain: Good figures alone don't cut it in depressed times

As the credit crisis took its inevitable toll, the three once high-flying shares unceremoniously dumped from the No Pain, No Gain portfolio have, not surprisingly, failed to recapture any of their old sparkle. And the delivery of encouraging profits has again been contemptuously ignored by the stock market.

Last week I commented on the travails of Printing.com, the on-line printer. Its shares never enjoyed the stratospheric success once achieved by the glamour trio. With their fancy ratings it was apparent that once signs of stress and strain emerged, with many investors feeling compelled to unload microcaps, the threesome would be susceptible to some resounding hammer blows.

Goals Soccer Centres is now around 300p after once commanding 444p; Myhome International is a mere 17.5p following a 106p peak and the third, the Prezzo restaurant chain, bumps along near 40p after earlier touching 93.75p.

I have recaptured Myhome, the franchise group, but although GSC and Prezzo are trading well, despite crumbling consumer confidence, I have, for the time being, abandoned any intention of drawing them back into the portfolio.

My reservations about Prezzo have been underlined by its latest figures. They were, in one sense, hugely impressive. Year's turnover was up 29 per cent to £70.1m with headline pre-tax profits emerging at £10.6m, a 23 per cent increase. In its past year the group opened 32 restaurants and now runs a 130-strong chain with a further five in various stages of completion. And chief executive Jonathan Kaye declared: "We remain confident of another positive year for the company."

But there were cautionary elements on the other side of the menu. The year's dividend is up by a mere 14 per cent (against a 40 per cent increase last time) and the "true" profit is actually down – by £1m to £7.7m. The setback is due to a £3.2m provision to accommodate underperforming restaurants that may be sold.

Still, I must confess I have a soft spot for the shares. After all, the portfolio acquired them at the equivalent of 17.25p and sold at 60p. Not a bad day's work, I suggest. Although they are now on a much more realistic rating they could suffer further damage if the trading environment continues to deteriorate and the eating out habit is threatened. On normal considerations the shares could be worth buying. But these are far from normal times and I would hold fire for the time being. Prezzo has much to commend it but I feel little will be lost by adopting a wait-and-see approach.

GSC, running five-a-side football centres, underlined its strength with a 26 per cent sales increase last year and profits up 42 per cent to £7m. The dividend was increased by 58 per cent. Trading remains strong with at least six centres due to open this year. The group, which is trying its luck in the United States, could resist the impact of belt-tightening more, but the shares already reflect such a possibility.

I continue to like GSC. The portfolio scored a reasonable gain, buying at 125.5p and selling at 300p. The shares are no longer on a stratospheric rating but even so they still look awfully pricey. As I have pointed out, commendable figures make little impression in the depressed stock market we are now enduring. But such indifference will not last forever. Investors should wait for the chill winds that are paralysing much of the investment world to abate. And don't let the fear factor, as shares continue to wilt, force panic sales – unless, of course, cash is urgently needed.

Hargreaves Services is one of the portfolio's more active constituents. It has completed another deal – this time absorbing a company called AJS Contracts, which offers maintenance services to the power industry. Cost is £4.64m with £2.2m up front and the rest spread over two years. AJS produces year's profits around the £1m mark.

The transport-to-coal-mining group has made headway since it was recruited to the portfolio two years ago. Like many, its shares failed to hold their peak (645p) but at 521p are still showing a nice little gain from my 417p-buying price.

Earlier this year Hargreaves produced encouraging interim profits and hopes are running high that it will achieve year's profits of £17.1m against £9.6m last time.

cash@independent.co.uk

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

Sport
Australia vs New Zealand live
cricket Follow over-by-over coverage as rivals New Zealand and Australia face off
News
Zayn has become the first member to leave One Direction. 'I have to do what feels right in my heart,' he said
peopleWe wince at anguish of fans, but his 1D departure shows the perils of fame in the social media age
Life and Style
Researchers found that just 10 one-minute swill-and-spit sessions are enough to soften tooth enamel and make teeth vulnerable to erosion
health
News
i100
Arts and Entertainment
The Regent Street Cinema’s projection room in the 1920s
film
News
Leah Devine is only the ninth female to have made the Young Magician of the Year final since the contest began more than 50 years
peopleMeet the 16-year-old who has set her heart on being the first female to win Young Magician of the Year
News
Jonathan Anderson was born in Northern Ireland but now based between London, where he presents a line named JW Anderson
peopleBritish designer Jonathan Anderson is putting his stamp on venerable house Loewe
News
Andy Davidhazy at the beginning (left) and end (right) of his hike
video
News
Taylor Swift is applying to trademark song lyrics from 1989
people
Voices
The popularity of TV shows such as The Liver Birds encouraged Liverpudlians to exaggerate their Scouse accent
voicesWe exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
Finacial products from our partners
Property search
  • Get to the point
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: Retirement Coordinator - Financial Services

    Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

    Recruitment Genius: Annuities / Pensions Administrator

    Negotiable: Recruitment Genius: You will be the first point of contact for all...

    Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

    £18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

    Ashdown Group: Learning and Development Programme Manager

    £35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

    Day In a Page

    Election 2015: How many of the Government's coalition agreement promises have been kept?

    Promises, promises

    But how many coalition agreement pledges have been kept?
    The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

    The death of a Gaza fisherman

    He built his own reef, and was fatally shot there by an Israeli gunboat
    Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

    Saudi airstrikes are fuelling the Gulf's fire

    Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
    Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

    The only direction Zayn could go

    We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
    Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

    Spells like teen spirit

    A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
    Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

    If fashion is a cycle, this young man knows just how to ride it

    British designer Jonathan Anderson is putting his stamp on venerable house Loewe
    Number plates scheme could provide a licence to offend in the land of the free

    Licence to offend in the land of the free

    Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
    From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

    From farm to fork in Cornwall

    One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
    Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

    Robert Parker interview

    The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
    Don't believe the stereotype - or should you?

    Don't believe the stereotype - or should you?

    We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
    How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

    How to make your own Easter egg

    Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
    Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

    Bill Granger's twist on Easter Sunday lunch

    Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
    Joe Marler: 'It's the way I think the game should be played'

    Joe Marler: 'It's the way I think the game should be played'

    The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
    Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

    Cricket World Cup 2015

    Has the success of the tournament spelt the end for Test matches?
    The Last Word: Justin Gatlin knows the price of everything, the value of nothing

    Michael Calvin's Last Word

    Justin Gatlin knows the price of everything, the value of nothing