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

News
newsGlobal index has ranked the quality of life for OAPs - but the UK didn't even make it into the top 10
News
people
News
people
News
peopleStella McCartney apologises over controversial Instagram picture
PROMOTED VIDEO
News
Gillian Anderson was paid less than her male co-star David Duchovny for three years while she was in the The X-Files until she protested and was given the same salary
people

Gillian Anderson lays into gender disparity in Hollywood

Life and Style
Laid bare: the Good2Go app ensures people have a chance to make their intentions clear about having sex
techCould Good2Go end disputes about sexual consent - without being a passion-killer?
Arts and Entertainment
Richard Burr remains the baker to beat on the Great British Bake Off
tvRichard remains the baker to beat as Chetna begins to flake
News
i100
Sport
footballArsenal 4 Galatasaray 1: Wenger celebrates 18th anniversary in style
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
tv
News
people
News
The village was originally named Llansanffraid-ym-Mechain after the Celtic female Saint Brigit, but the name was changed 150 years ago to Llansantffraid – a decision which suggests the incorrect gender of the saint
newsA Welsh town has changed its name - and a prize if you can notice how
Arts and Entertainment
Kristen Scott Thomas in Electra at the Old Vic
theatreReview: Kristin Scott Thomas is magnificent in a five-star performance of ‘Electra’
News
Destructive discourse: Jewish boys look at anti-Semitic graffiti sprayed on to the walls of the synagogue in March 2006, near Tel Aviv
peopleAt the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity
Life and Style
Couples who boast about their relationship have been condemned as the most annoying Facebook users
tech
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
News
i100
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Trust Accountant - Kent

    NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

    Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

    £18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

    Law Costs

    Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

    Day In a Page

    Italian couples fake UK divorce scam on an ‘industrial scale’

    Welcome to Maidenhead, the divorce capital of... Italy

    A look at the the legal tourists who exploited our liberal dissolution rules
    Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

    Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

    The vintage series has often been criticised for racial stereotyping
    An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

    An app for the amorous

    Could Good2Go end disputes about sexual consent - without being a passion-killer?
    Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

    Llansanffraid is now Llansantffraid

    Welsh town changes its name, but can you spot the difference?
    Charlotte Riley: At the peak of her powers

    Charlotte Riley: At the peak of her powers

    After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
    She's having a laugh: Britain's female comedians have never had it so good

    She's having a laugh

    Britain's female comedians have never had it so good, says stand-up Natalie Haynes
    Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

    Let there be light

    Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
    Great British Bake Off, semi-final, review: Richard remains the baker to beat

    Tensions rise in Bake Off's pastry week

    Richard remains the baker to beat as Chetna begins to flake
    Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

    A look to the future

    It's time travel fashion at Louis Vuitton in Paris
    The 10 best bedspreads

    The 10 best bedspreads

    Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
    Arsenal vs Galatasaray: Five things we learnt from the Emirates

    Arsenal vs Galatasaray

    Five things we learnt from the Gunners' Champions League victory at the Emirates
    Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

    Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

    This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
    Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

    The children orphaned by Ebola...

    ... then rejected by surviving relatives over fear of infection
    Pride: Are censors pandering to homophobia?

    Are censors pandering to homophobia?

    US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
    The magic of roundabouts

    Lords of the rings

    Just who are the Roundabout Appreciation Society?