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
Questions of Cash: Bupa costs bore no relation to what I'd been quoted
Bargain Hunter: Getting your hands on these baby goodies is child's play
Time is running out for holiday home tax relief
Problem gambling: Amid heavy advertising and a surge in remote sports betting, more and more 16 to 24-year-olds are now seen as 'at risk'
The Cyprus dream becomes a nightmare
- 1 Secret Cinema: Why were Back to the Future screenings cancelled?
- 2 Christians: The world's most persecuted people
- 3 The secret report that helps Israelis to hide facts
- 4 Ross Burden dead: MasterChef and Ready Steady Cook star, dies aged 45
- 5 Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?
The secret report that helps Israelis to hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
Were 'Poor Doors' added to mixed developments so wealthy residents don't have to go in alongside social housing tenants?
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Opponents of Israel's military operation in Gaza are the real enemies of Middle Eastern peace
A new Russian revolution: The cracks are starting to appear in Putin’s Kremlin power bloc
iJobs Money & Business
£26000 - £30000 per annum + Benefits: Ashdown Group: Account Manager - (Produc...
£28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...
£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...
£30000 - £45000 per annum: Harrington Starr: A Global Financial Service Organi...
Day In a Page
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
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000