No Pain, No Gain: Time's up for English Wines Group, one of my 'walking wounded'

yourmoney@independent.co.uk

The tremors at Nighthawk Energy have helped prompt an agonising and perhaps sceptical reassessment of the No Pain, No Gain portfolio. My little investment exercise remains comfortably in profit but it could be embracing too many "walking wounded". I realise I am often slow to ditch a share. My inclination is to wait and see whether prospects improve. Sometimes they do, sometimes they don't.



When the stock market is deep down in the dumps – such as early last year when the Footsie seemed to be moving perilously close to 3,000 points – the temptation to sell can be overwhelming. But it would have been foolish to have succumbed, as this week's Footsie levels indicate.



I am not necessarily opposed to drastic selling action. Some observers feel the outlook for the world economy is so gloomy that investors should escape from the stock market while it is still possible. Others do not agree. It is, of course, a multitude of views that create a market – any market.



The portfolio is carrying what I would describe, in share-price terms, four "walking wounded" constituents. In addition to Nighthawk, which I discussed last week, I count Lighthouse and Private and Commercial Finance (PCF), both AIM-traded, and English Wines Group (EWG), a Plus share, as my endangered species. By a narrow margin, I decided to hold on to Nighthawk, although the shares are a long way from my 44p buying price.



I am also retaining Lighthouse. Although the shares have nearly halved, the accountancy group is profitable, dividend-paying and cash-rich. I am less convinced by PCF. It is making money – but not as much as some expected – and has not paid a dividend for five years. Last week some loan notes, offering 8 per cent, were converted into shares at 76p against a ruling price of around 6p. An astonishing deal. I suppose the note holder needed cash or felt there was no chance of the shares improving. Perhaps both influences prevailed.



I am not selling PCF, although, like Nighthawk, it could merely be a stay of execution. But I am dumping EWG. The shares have been a bitter disappointment. The portfolio invested in May 2007 at 20p, watched the price fizz up to 26p, and then suffered the torment of the shares slipping to 11.5p; as I write they are 13.5p.



Although the decline is not so sharp as PCF and Nighthawk, the profits outlook is far from encouraging. I had expected the company to be handsomely in profit by now – probably notching up more than £1m. But it has failed to deliver. Last year's profits were £62,000 and it recently uncorked a £63,000 half-time loss. A contributor to the setback was interest payments on a loan stock that will cost the company around £88,000 a year.



The notes, carrying an 8 per cent interest rate, were issued last year. It was one of those private placings from which the body of shareholders was excluded. Directors and a few others subscribed.



I hope EWG manages to increase quite dramatically its level of return, otherwise the loan, which is convertible into shares, will continue to have a sobering influence on what should be a promising enterprise. After all, consumption of English-produced grape wines is increasing and EWG complains demand outstrips its ability to supply. When I enlisted the shares, I realised it was a long-term investment. But the lack of progress has been quite debilitating.



The portfolio has one other Plus share, NCI Vehicle Rescue. It has performed quite well. The problems confronting the fringe Plus market, illustrated by its owner's "penny dreadful" share price, are being addressed. The outlook certainly seems a little brighter than a few months ago. Even so, I am reluctant to get too engrossed. But NCI does not deserve to stand in isolation and I believe the portfolio should accommodate at least one other fringe share.



I have therefore alighted on Rivington Street Holdings, a financial group I discussed in August, as the replacement share. RSH was recruited at 27.5p.



Finally, fully listed portfolio member Marston's: the brewing group last week rolled out an encouraging trading statement, indicating that year's profits should emerge at around £72m. The big question is: will the dividend be cut? We will know in early December.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Property
pets
Arts and Entertainment
tvGame of Thrones season 5 ep 4, review - WARNING: contains major spoiliers!
Arts and Entertainment
tvThe C-Word, TV review
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Sport
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
News
Tiger Woods and Lindsey Vonn are breaking up after nearly three years together
peopleFormer couple announce separation in posts on their websites
Sport
football
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
Arts and Entertainment
Haunted looks: Matthew Macfadyen and Timothy Spall star in ‘The Enfield Haunting’
tvThe Enfield Haunting, TV review
News
news
News
The Mattehorn stands reflected in Leisee lake near Sunnegga station on June 30, 2013 near Zermatt, Switzerland
news
Finacial products from our partners
Property search
  • Get to the point
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

    Recruitment Genius: Claims Administrator

    £16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

    Recruitment Genius: Senior SEO Executive

    £24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

    Recruitment Genius: Online Customer Service Administrator

    £16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

    Recruitment Genius: Digital Marketing Executive

    £18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

    Day In a Page

    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'
    Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

    Iwan Rheon is returning to his Welsh roots

    Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
    Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

    Everyone is talking about The Trews

    Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
    Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

    It's time for my close-up

    Meet the man who films great whites for a living