Private Investor: With Arriva, at least dividends arrive on time

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The Independent Online

The public finances were looking especially rosy last month, according to the official figures. So healthy, indeed, were tax receipts that it has put the Government's borrowing back on track. It was quite a surprise, and I think I know why.

Last month, I paid my income-tax bill. No, obviously that wasn't quite enough to move the nation into the black, but what seemed significant to me was the unusual extent and viciousness of the bullying I'd received from HM Revenue and Customs to get me to cough up. Really nasty stuff.

The only people worse than them for getting money with menaces are those cowboy wheel-clampers you see who make out that they have the authority to immobilise your car on private land, but are actually just making it up as they go along, aided by official-looking but bogus signs.

One or two wheel-clampers have been in the news lately for their other crimes, and I can't say I was surprised to hear about their occupation. Something called the Security Industry Authority is supposed to police this unsavoury band, but it's the feeblest example of "self-regulation" I've ever come across. All over the land, the SIA's members are making people's lives a misery every day. Are you listening, Department for Transport?

Anyway, that's enough off-topic ranting.

I wondered at the time why HMRC were taking such an aggressive approach against me, and I think I now know why.

The Treasury must have told them to put the frighteners on and get the cash in the Government's coffers ASAP. So they did. I also notice that I'm being fined for various tax things on an unusually prompt basis.

I feel victimised, obviously, and bewildered – but at least I think I now realise why this odd situation has come about; Mr Darling is skint. Or maybe I'm just being paranoid.

Anyway, my experiences with the tax authorities have been extremely unpleasant, and I can't say I expect them to get any better when they're hungry for the money I've earned.

All the more reason for us investors to try to get the best returns we can. If I had the money, I'd be buying like crazy now, as it seems to me that the lack of confidence in the market opens up some terrific buying opportunities.

Arriva stands out at the moment. You may think of it as some tuppenny ha'penny bus company running smoky old Ford Transit minibuses. Well, it is more than that. It employs 34,000 people, apparently, operates all over Europe, and runs – wait for it – all the trains in Wales. It has also gained the Cross Country rail franchise.

More to the point, it posted a surplus of £128m last week, up by 7 per cent – not bad, given what's been happening to fuel prices. The dividend is up 10 per cent. I bought into Arriva four years ago, and since then the share price has doubled. Basically, businesses such as Arriva are a one-way bet, based on the inefficiency and naivety of the public sector. Private companies, you can safely assume, will always get the better of civil servants, and, if the companies ever look like starting to lose money, they get rescued with an increased level of subsidy.

An essential commuter rail link or bus service will never be allowed to go bust – just as Capita, (in which I also own shares) got extra cash from Ken Livingstone when the returns from running the London Congestion Charge looked a bit weak. Like I say, a one-way bet for shareholders.

The way I see it is that if you have to put up with late, filthy, overcrowded trains and the ever-present danger of physical assault on a late-night bus or rail journey, the least you can do is make a few quid out of your suffering. And, while the $100 barrel of oil does eat into Arriva's profits, it also starts to push people off the road and on to public transport. As do those swines who will clamp your car (without ever putting a ticket on it first). I think I've come full circle now.

If I could buy shares in a wheel-clamping firm, I would. Do you know of any? Failing that, there's always public transport and the constant flow of misguided and indiscriminate public subsidy to be converted into dividends.

Right now, I can't think of a better investment to catch than Arriva. I'd like to buy some more shares in it. Let's hope the dividends turn up on time.

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