No Pain, No Gain: One final opportunity for the weakest links
Saturday 09 April 2005
The portfolio has made modest progress since my February review, shrugging off a rather disappointing stock market performance.
The portfolio has made modest progress since my February review, shrugging off a rather disappointing stock market performance. Takeover activity at drinks David and Goliath - Merrydown and Allied Domecq - has more than offset modest weakness in a few constituents.
Merrydown's progress was inevitable, once the agreed takeover bid was rolled out. I have decided to hang on to the shares until the £36.7m offer goes through. It is going to be a long, tortuous process, as the cider and soft drink firm is surrendering its independence via a scheme of arrangement.
The offer, confirmed just after my last review, is 170p a share; the current price is 167.5p. It was 148p at the time of the last calculation. There is a temptation to ignore the odd 2.5p and sell, thereby harnessing our profit. I may yet decide to do so, but for the moment I am prepared to hang around and wait for the extra £350.
I commented on the continuing bid speculation surrounding Allied in my February portfolio review. Well, this week, what the stock market had for some time suspected emerged into the daylight.
Yes, Allied was in play and it could well be the victim of an American/French carve-up. The Allied action, which admittedly has been a long time coming, also influenced another constituent around which speculative rumours often swirl, brewer Scottish & Newcastle.
Overall, I remain relatively content with most constituents, although, as I have observed in the past, I am not entirely happy with some displays. I am beginning to feel that something of a shake-up would not come amiss, as I find myself tolerating a few long-time laggards.
My two latest buys, Georgica and Goals Soccer Centres, have yet to cover themselves in glory. Their performance tends to underline the difficulty of alighting on suitable newcomers. I do not regard either as short-term punts, so I am prepared to bide my time.
Profile Media remains my disaster share. The group appears in need of more capital and I would expect news of shareholders being tapped for more cash - or asset sales. It has fixed up an intriguing loan-repayment deal with the Barclays banking group and it would be a pity if lack of resources prevented it from keeping its side of the bargain.
The portfolio has lost most of the £5,000 it invested in Profile. And there seems little hope of its getting its money back. Still, with the loss fully written down, it seems pointless bailing out at this late stage just to collect £100. I should have sold ages ago, but I didn't. Until the shares slumped into the "penny dreadful" category, I had dreamt of a recovery. At one time, the group's rescue plan appeared not only realistic, but impressive. But the turnaround has yet to materialise.
Profile is the only constituent - past or present - where almost all the £5,000 stake money has disappeared. Overall, the portfolio is recording a £69,000 profit on a £170,000 outlay. Dividends - and I have often embraced high-yielders - are ignored in the calculations. So, too, are tax considerations and dealing costs. The portfolio was launched in February 1999. S&U, an obscure finance house, was one of my first recruits. The shares have turned out to be a sound investment. They have rarely been below my buying price, although the company suffered one nasty hiccup.
Door-to-door lending does not enjoy a particularly attractive image, but S&U has managed to avoid the pitfalls that have trapped some of its rivals. Its other main activity is providing car hire purchase, another area with its detractors.
The group's pre-tax profits last year rose 8.9 per cent to £9.8m. Again, the car side, a relatively recent addition to its operations, did well, pulling in £2m. This business is expected to achieve profits of about £2.45m in the current year.
S&U is one of my high-yielding constituents. And its income attractions were underlined by a 2p increase in the yearly dividend to 31p. Like so many family companies, it has always been quick to reward shareholders. It has one of the most progressive dividend policies on the stock market.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Pension mortgages: 'The advice I was given was wrong and now I face losing my home'
You'll need £220,000 for a minimum wage in your retirement
Questions of Cash: I checked in with Air France in time and still missed the plane
Money Insider: Supermarkets: the real challenger banks
Minister's pension promise to firefighters challenged
- 1 Planes go hybrid-electric in important step to greener flight
- 2 Antonio Martin shooting: Mayor says there should be 'no comparison' to Ferguson
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
iJobs Money & Business
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
Day In a Page
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
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