No Pain, No Gain: The Kayes serve up another irresistible offering

The Kayes surely deserve to be regarded as master restaurateurs.

The Kayes surely deserve to be regarded as master restaurateurs. I am happy to report that the family's fifth eating-out venture since I arrived in the City is showing signs of becoming as successful as its predecessors. Prezzo, as the latest operation is called, has swung impressively into profits and looks set to produce appetising results this year.

My interest in the Kayes is not confined to their culinary ability. Since November, Prezzo has been a constituent of the No Pain, No Gain portfolio. I bought shares at 69p; they are now 95p.

The company ended last year, when it achieved profits of £470,000, with 26 outlets; eight have opened so far this year and a further six are expected to be in business before the year's end. Such a rapid expansion programme must produce casualties. The £470,000 profit was struck after accommodating a £740,000 loss on the sale of four restaurants that did not come up to scratch and a £130,000 impairment provision. I suppose a restaurant chain that is expanding so aggressively will inevitably descend on a few duff sites. Its willingness to quickly acknowledge its mistakes speaks volumes for the management's focused approach.

I came across the Kayes in the 1960s when they launched, with a razzmatazz that would be impossible today, shares of their Golden Egg chain on the stock market. In those days the stock market really was a market, with brokers and jobbers eyeballing each other on a trading floor. Besides the occasional eggshell on the floor, Golden Egg started its first day of City life with jobbers attired in chef hats and aprons and waving frying pans. Some of the dealing brokers were also suitably garbed. Golden Egg, a sort of upmarket greasy spoon chain, was eventually taken over, leaving the Kayes to develop another venture, City Hotels, which, despite its name, had restaurant interests.

Then the Garfunkel chain (now part of the Restaurant Group, better known as City Centre Restaurants) kept them occupied before they switched to Ask Central. Ask is currently being swallowed for £213m by the private equity firm that owns the rival Pizza Express chain. The Kayes and outside shareholders have reaped rich rewards from each excursion.

Now, with Jonathan Kaye in charge, Prezzo is the family's only stock market venture. Like Ask, it has an Italian flavour. The Kayes have pumped money into the business since it arrived with just four restaurants at 50p a share two years ago. It is well-positioned to support its growth ambitions, although more money-raising exercises may be on the menu.

Jonathan Kaye, a cousin of Adam and Samuel Kaye (the men behind Ask), is clearly as at ease with figures as he is with pasta. Last year Prezzo lifted margins from 3.1 per cent to 13.6 per cent, which was still below the Ask level, but moving in the right direction. With the stockbroker Evolution Beeson Gregory predicting profits of £2m this year, the shares are on a fancy rating. There is many a slip 'twixt cup and lip, and Prezzo still has a way to go to justify the exuberance of its supporters. But I am happy to be one of them.

Stagecoach, the bus and train group, is another portfolio member enjoying a bullish run. Trading is running ahead of expectations and it looks as though profits will emerge around the £110m mark, £6m above earlier hopes. It plans to hand back £250m to shareholders, probably through a special dividend. The group has staged a remarkable recovery. Eighteen months ago its future seemed behind it. But Brian Souter, the chief executive, has carried out a splendid restructuring exercise. The shares are about 86p, against my buying price of 80p and the dismal 10p hit when it seemed to have run off the road.

Stagecoach was a bet against the crowd. I was, of course, tempted to sell when the shares were in the dumps. Because each portfolio constituent represents a £5,000 investment I was barred from taking another option - averaging down. So I sat tight, illustrating that patience does occasionally have its reward. When I calculate the portfolio's performance I ignore dividends and dealing costs. However, a special dividend would have to be taken into consideration. I would probably add it to the portfolio's cash assets.

Finally Wyatt, the little online risk consultancy. It has raised £550,000 through a share placing. The cash is wanted for working capital. I am still hopeful it will soon hit the takeover trail with one, possibly two, acquisitions.

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

Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
David Moyes and Louis van Gaal
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
Life and Style
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Life and Style
food + drink
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    IT Project manager - Web E-commerce

    £65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

    Trainee / Experienced Recruitment Consultants

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

    Trainee Recruitment Consultant - Soho

    £20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

    Trainee Recruitment Consultants - Banking & Finance

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

    Day In a Page

    Secret politics of the weekly shop

    The politics of the weekly shop

    New app reveals political leanings of food companies
    Beam me up, Scottie!

    Beam me up, Scottie!

    Celebrity Trekkies from Alex Salmond to Barack Obama
    Beware Wet Paint: The ICA's latest ambitious exhibition

    Beware Wet Paint

    The ICA's latest ambitious exhibition
    Pink Floyd have produced some of rock's greatest ever album covers

    Pink Floyd have produced some of rock's greatest ever album covers

    Can 'The Endless River' carry on the tradition?
    Sanctuary for the suicidal

    Sanctuary for the suicidal

    One mother's story of how London charity Maytree helped her son with his depression
    A roller-coaster tale from the 'voice of a generation'

    Not That Kind of Girl:

    A roller-coaster tale from 'voice of a generation' Lena Dunham
    London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

    London is not bedlam or a cradle of vice

    In fact it, as much as anywhere, deserves independence
    Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

    Vivienne Westwood 'didn’t want' relationship with McLaren

    Designer 'felt pressured' into going out with Sex Pistols manager
    Jourdan Dunn: Model mother

    Model mother

    Jordan Dunn became one of the best-paid models in the world
    Apple still coolest brand – despite U2 PR disaster

    Apple still the coolest brand

    Despite PR disaster of free U2 album
    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits