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, 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.

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

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Neil Pavier: Management Accountant

    £45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

    Sheridan Maine: Commercial Accountant

    £45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

    Laura Norton: Project Accountant

    £50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

    Day In a Page

    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf
    From Shakespeare to Rising Damp... to Vicious

    Frances de la Tour's 50-year triumph

    'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
    'That Whitsun, I was late getting away...'

    Ian McMillan on the Whitsun Weddings

    This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
    Kathryn Williams explores the works and influences of Sylvia Plath in a new light

    Songs from the bell jar

    Kathryn Williams explores the works and influences of Sylvia Plath
    How one man's day in high heels showed him that Cannes must change its 'no flats' policy

    One man's day in high heels

    ...showed him that Cannes must change its 'flats' policy
    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
    Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

    Laughter, but no tears, as Letterman takes his bow after 33 years

    Veteran talkshow host steps down to plaudits from four presidents
    Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

    Hozier's 'blasphemous' song takes Novello award

    Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
    Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

    Join the tequila gold rush

    The spirit has gone from a cheap shot to a multi-billion pound product
    12 best statement wallpapers

    12 best statement wallpapers

    Make an impact and transform a room with a conversation-starting pattern
    Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

    Paul Scholes column

    Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?