No Pain, No Gain: Goodbye to GallifordTry shares after bumpy ride
Saturday 22 May 2004
It's farewell, then, to
GallifordTry. On Monday shares of the housebuilding and construction group crashed through the 50p barrier - the first trading day following my decision to lift my sell price from 40p to 50p. They collapsed 5.75p to 46.5p in remarkably heavy trading.
It's farewell, then, to GallifordTry. On Monday shares of the housebuilding and construction group crashed through the 50p barrier - the first trading day following my decision to lift my sell price from 40p to 50p. They collapsed 5.75p to 46.5p in remarkably heavy trading.
So the no pain, no gain portfolio's only option was to dump the shares once 50p was hit. They have been a profitable investment, but I must admit to nursing doubts about their continuing buoyancy. That was why I set a sell level on the stock. It is not a procedure I normally adopt. I feel it smacks too much of the stop-loss system, which is far too inflexible and often results in the unnecessary sacrifice of future profits. Still, in this case, I felt it advisable to ensure I was not caught between columns by a sudden slump and, therefore, unable to take prompt action.
I have no regret about locking in the Galliford profit. The shares were one of my early constituents, arriving in May, 1999, a few months after the portfolio was launched. I paid 20p for them, so a 30p gain is a reasonable outcome. As is to be expected over a five-year period, it has often been a bumpy ride. On a couple of occasions the shares fell below my buying price, causing some anxiety. And the trading performance has not always been scintillating. Galliford's construction arm suffered a wounding setback and although it is now recovering in some style, its difficulties distracted from the successful housing operations. Shorn of the construction activities, the shares would have joined even more fully in the remarkable boom most other housebuilders have enjoyed on the back of soaring house prices. At one time there was vague talk of a demerger. There has also been a little take-over action. Rok Property Solutions made approaches, promising a 54p cash and shares offer, but its overtures were rebuffed.
It is not, as I write, clear why Galliford's shares had such a poor session on Monday, in general a weak day for the stock market. It could have been a delayed reaction to an investment presentation the group made in the previous week. Perhaps a fund manager felt the shares had little immediate mileage left in them, or some analysts may have reduced their profit forecasts. Still, profits of around £22m for the current year still seems to be the general target. At the halfway stage the group recorded £9.6m pre-tax.
Galliford's departure makes little difference to the portfolio's overall financial performance, which I discussed last week. It does, however, reduce to 14 the number of constituents. Such a membership list is a little lightweight and I will increase my efforts to discover more suitable candidates. I am still pondering the possibility of recruiting Urbium, the chain of trendy bars which is undoubtedly one of the best-run operations of its type in the country. It seems to be causing something of a stir with the success of its new outlets in the City, an area not renowned for its late-night hospitality. Hitherto the investment community has usually decamped to London's West End for nocturnal drinking.
Wyatt, one of my lossmakers, was also quick off the mark after last week's column. The chairman, Bob Holt, who created the highly successful Mears facilities management group, announced the first of the deals I (and others) suspected he had in the pipeline. A company called Premier Employment Services has been acquired at a modest initial cost of £40,000. But there is also a £2m possible earn-out. The structure of the deal makes it clear that in Mr Holt's opinion Premier's current performance is an irrelevance - it is actually lossmaking - and it is all about tomorrow's display. The deferred payment, providing targets are met, will be in shares, although in certain circumstances the vendors will have to be content with old-fashioned cash.
Mr Holt's successful development of Mears was the sole reason I alighted on Wyatt. He has entered a little-explored corner of the commercial world, and is building what could become a significant player. Whereas the growth at Mears has been largely achieved from within, Wyatt is an acquisitive vehicle. It is set to announce further deals in the months ahead.
The shares have so far proved a disappointment, at 20.5p against my 27.5p buying price. But I am prepared to be patient. And, just to underline my doubts about the stop-loss system, I have no pre-conceived selling price.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Kirstie Allsopp has waded into the female fertility debate again
Gillian Anderson lays into gender disparity in Hollywood
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered...
- 3 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 4 35,000 walrus gather on north-west Alaska beach 'for a rest'
- 5 Brad Pitt, on the moment he completely lost his temper with Clint Eastwood's son
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
Former Tory donor Arron Banks ups his Ukip donation to £1million following William Hague 'nobody' comment
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...
Day In a Page
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors