No Pain, No Gain: Guinness Peat shares sale will be felt at other small breweries






The oddly named security behemoth G4S has failed to fulfil my expectations since joining the no pain, no gain portfolio, a little more than a year ago. But my belief that the shares are destined to make a significant contribution to the well-being of my little investment exercise has been reinforced by one of those strategy presentations so beloved by the City. I do not think a dramatic upsurge is imminent. Yet, it would appear that the case for long-term appreciation remains strong and the Anglo-Danish group could soon be on a roll.

Chief executive, Nick Buckles, sees it returning to the more rewarding days it experienced before the financial crisis devastated the world's economy and continues to create havoc, particularly in the eurozone. In the past few years G4S's growth slowed. For example, in 2005, the group's organic turnover increased by 7 per cent and underlying profits by 16 per cent and in 2007 the figures were 9.1 per cent and 16.8 per cent. Last year's display was far less impressive – increases of 2.1 per cent and 4.2 per cent. Even if the earlier performances are not mirrored there must be every chance that G4S should manage around 8 or 9 per cent yearly progress.

Mr Buckles, it appears, believes the group will recapture its old pre-recession swerve and verve by the end of next year. Emerging markets will provide much of the growth. He is reported to have commented: "We believe sometime in the next five or so years, 50 per cent of our business will come from emerging markets." G4S is, he believes, exceedingly well placed to take advantage of the opening up of new areas. He also expects increased business in more established markets.

The group has, despite its relative slowdown, managed to keep profits and dividends moving ahead. Last year pre-tax profits came out at £330m and the dividend was lifted by 10 per cent.

For the current year the City expectation is profits nearer £380m with a 9 or 10 per cent dividend increase. G4S is keen to expand. It likes to buy relatively small bolt-ons and expects to spend some £200m adding to its international spread this year compared with an outlay of £65m last year. But, I would not be surprised if the group, which provides a wide range of services ranging from guards to sophisticated security systems, is contemplating something more substantial. After all, a significant acquisition could help ensure Mr Buckles achieves, even exceeds, his ambitious growth targets.

The portfolio arrived on G4S shares at 264p. As I write they are 281p. Stockbroker analysts are looking for them to hit around 330p this year.

Readers may recall that last year I discussed the beer ambitions of Guinness Peat, an activist investment group. It held stakes in a number of family-run brewers, clearly enticed by their under appreciated assets and, it hoped, waning hereditary influences. Well, it seems that the New Zealand-based group's adventure among the lower ranks of the beerage is coming to an end. Last week it sold its stake in Plus-traded East Anglian brewer, Adnams. Like a number of family-run brewers Adnams is protected by two classes of shares, an "anachronistic" structure GP sought, unsuccessfully, to abolish.

It had earlier won a famous victory when after a long battle it persuaded Young & Co. to abandon a similar protective share structure. In those days Young operated a London brewery which has since been sold. Nowadays it has a pub chain and a 40 per cent interest in brewer, Wells & Young's.

The Adnams sale is part of GP's plan to distribute some £80m to shareholders by selling non-core investments. So shares of Shepherd Neame, the nation's oldest brewer, and Daniel Thwaites of Blackburn, both traded on the fringe Plus market, could feel the impact of this new policy. At the last count GP had 3.1 per cent of Sheps and 9 per cent of Thwaites. Perhaps, significantly, Thwaites shares are bumping along at a 12-month low. GP, once a City merchant bank run by the Guinness brewing family, also has 15.1 per cent of AIM-traded Young's. It appears to have sold its 4.75 stake in Fuller, Smith & Turner, the fully listed London Pride brewer.

yourmoney@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
News
Angelina Jolie with her father Jon Voight
people
News
Bill Kerr has died aged 92
people
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
news
Sport
footballPremiership preview: All the talking points ahead of this weekend's matches
News
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
people
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
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

    SAS Business Analyst - Credit Risk - Retail Banking

    £450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...

    Project Manager - Pensions

    £32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

    KYC Analyst, Birmingham - £200-£250 p/d

    £200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...

    Test Manager - Banking - Yorkshire - £450 per day

    £400 - £500 per day: Orgtel: Test Manager - Banking - West Yorkshire - £400-£5...

    Day In a Page

    Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

    The phoney war is over

    Russian troops and armour pour into Ukraine
    Potatoes could be off the menu as crop pests threaten UK

    Potatoes could be off the menu as crop pests threaten UK

    The world’s entire food system is under attack - and Britain is most at risk, according to a new study
    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
    From Mozart to Orson Welles: Creative geniuses who peaked too soon

    Creative geniuses who peaked too soon

    After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
    Caught in the crossfire of a cyber Cold War

    Caught in the crossfire of a cyber Cold War

    Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

    Salomé: A head for seduction

    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
    From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

    British Library celebrates all things Gothic

    Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
    The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

    Is the Hard Rock Café worth fighting for?

    The restaurant chain's owners are currently embroiled in a bitter legal dispute
    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

    In search of Caribbean soul food

    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
    11 best face powders

    11 best face powders

    Sweep away shiny skin with our pick of the best pressed and loose powder bases
    England vs Norway: Roy Hodgson's hands tied by exploding top flight

    Roy Hodgson's hands tied by exploding top flight

    Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
    Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

    Di Maria and Ronaldo: A tale of two Manchester United No 7s

    They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
    Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

    Robert Fisk: No victory for Israel despite weeks of devastation

    Palestinians have won: they are still in Gaza, and Hamas is still there
    Mary Beard writes character reference for Twitter troll who called her a 'slut'

    Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

    The Cambridge University classicist even wrote the student a character reference
    America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

    America’s new apartheid

    Prosperous white districts are choosing to break away from black cities and go it alone