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
- 1 All Blacks Aaron Cruden misses New Zealand flight after drinking session, has brilliant excuse
- 2 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 3 'F*ck it, I quit': TV reporter Charlo Greene quits live on air in spectacular fashion
- 4 Alicia Keys leaks nude photo 'to create a kinder and more peaceful world'
- 5 Clothes store Joy angers mental health campaigners with Twitter exchange on bipolar disorders
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...
Day In a Page
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
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