No Pain No Gain: I’m still not ready to eat my words over SnackTime

 

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SnackTime has drummed up much-needed extra money in double-quick time.

Just 10  days after its shares were suspended, it has released plans to pump £1.8m into the struggling group. The cash will come courtesy of Boris Belotserkovsky, who has taken a close interest in the affairs of the vending machine business.

Already a director and  26 per cent stakeholder, the Russian magnate is buying  12 million shares at 15p a time, lifting his interest to 53.7 per cent. The shares were frozen at 10.25p. Shareholders will meet later this month to approve the injection. Already, those representing 32.2 per cent of the company have given their support.

I would be astonished if the deal was rejected. SnackTime is in urgent need of the cash, which will provide breathing space and probably help in negotiations with the Co-operative Bank, which is deeply involved in the group.

The commitment of Mr Belotserkovsky is undoubtedly the best news to come SnackTime’s way for many a moon. He often acquired shares through the stock market but in June made a £570,000 share subscription, also at 15p. His actions make me wonder if I may eventually be able to justify my devotion to the shares, which have collapsed from the 119p that the No Pain, No Gain portfolio paid in 2009.

Over to Marston’s, another long-time constituent that, thankfully, has not suffered any of the tribulations that have afflicted SnackTime. The brewer, famed for such beers as Pedigree and Brakspear, has experienced a rather sobering sales slow down. But the blip is not a surprise. After all, Mitchells & Butlers, the country’s largest pub/restaurant chain, bemoaned a sales plunge in August, largely due to the weather.

Marston’s recorded comfortable increases over the year ending earlier this month and believes profits will match expectations. It has built 100 new pub/restaurants in the past five years and has 25 in the pipeline. Analyst Ian Forrest at stockbroker The Share Centre reckons that with its 4.65 per cent divi- dend yield, the stock should  appeal to income investors.

The price has suffered, like others in the portfolio, as the market has been assailed by an assortment of worries, from the moribund European Union threatening world economic growth to uprisings in the Middle East and Ukraine.

From around 165p, Marston’s shares have fallen, as I write, to 136.5p. Such a display is not surprising in the dismal stock market climate.

Even so, it seems the rush of floats continues. I would have expected many companies planning a share issue to be deterred by the slump.

But it seems the queue of newcomers still stretches into the distance. Whether some will have second thoughts and pull their projected issues is a matter for conjecture but current indications are that many are determined to press ahead, In the first nine months of the year, new issues raised £13.4bn, nearly triple last year’s comparative figure.

I am contemplating recruiting to the portfolio a company that made a small contribution to that vast amount – just £1.25m. The possible newcomer is C/dialogues; it provides marketing service to mobile networks. The shares arrived at 212p; they are now 275p.

I will probably devote more space to its operations in the next few weeks. I am impressed by the extent to which the business has outstripped its float forecasts. Mirabaud, the investment group, reckons the shares should be on their way to 330p.

yourmoney@independent.co.uk

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