Derek Pain: Encouraging results from portfolio show gloomy clouds lifting

Half of the constituents of the no pain, no gain portfolio have in the past few weeks reported to shareholders. In the main their messages have been encouraging.

I suppose pride of place must go to little Private & Commercial Finance, the worst-performing member. Its trading update, although cautious in tone, offered tentative hopes that the little hire purchase group is at last escaping the gloom clouds that have hovered over it for nearly two years.

It seems to be benefiting from reduced competition as some rivals have retired from the fray because of the impact of the recession, and is pleased with the quality of the new business it is capturing. Even so, a shortage of funds is preventing it taking full advantage of the opportunities available. Still Scott Maybury, chief executive, expects profits for the year just ended to be in line with expectations: around £220,000. There are stock market hopes that perhaps £1m is possible this year. The update was enough to lift the shares, as I write, to 8.5p. With assets near to 15p a share I remain optimistic that my 19.5p buying price will eventually be exceeded.

PCF results are due next month when Clarity Commerce Solutions will also report. It has said that it too expects to meet profit expectations – around £1.8m – but warns that trading conditions are "challenging" and some key orders are being delayed. The shares eased to 39p (against a 29.5p buying price) on the statement.

English Wines Group, one of my two Plus constituents, has again failed to produce a cheerful profits ferment. At the pre-tax level with sales up 6.4 per cent to £2.5m the figure emerged at £62,000, down from £106,000. Higher interest charges, following the creation of £1.1m of convertible loan stock, are responsible for the decline.

The day when EWG hits a £1m profit seems as distant as ever. Some observers thought the group should be in the seven-figure category this year or next. The portfolio paid 20p a share against the 14p now prevailing. My taste for the shares is weakening and it would not take much to prompt me to give them the old heave-ho.

Hargreaves Services' proposal to get closer to UK Coal is also looking increasingly distant. Discussions, it seems, are still at a preliminary stage and although the transport-to-waste disposal group remains keen on a deal it must be worried about UKC's problems which have resulted in a £129.1m loss. Whether Hargreaves wants UKC's pits or the entire company, which includes a 43,500-acre land bank, is not clear. It seems around a third of UKC's acreage, mostly agricultural land, is for sale. I recruited Hargreaves at 417p a share; they are nudging 700p.

Mears, the support services group, has added two more contracts to its already impressive collection. One is a £300m, 10- year deal that brings 20,000 homes in London and the Home Counties into its orbit. The other is also in London: a £170m, 8,000-homes contract covering three years. More such links are in the pipeline as, in these straitened times, social landlords outsource more of their maintenance operations and look to the bigger, multi-services groups, such as Mears. The shares, taken on at 272p, are around 312p.

At 25p (against my 44p buying price), shares of Nighthawk Energy, the oil and gas group, seem to have returned to their bad old ways, despite an encouraging drilling development and director share purchases.

Whitbread, the former brewer now running pub restaurants, budget hotels and the Costa Coffee cafés, rolled out "true" pre-tax profits of £208m up from £198.6m with underlying profits of £239.1m against £224.4m. The group has survived the recession in some style and I expect further progress this year. Perhaps underlying profits above £250m will be achieved?

Marston's, still brewing and running pubs, produced a mildly encouraging trading update and appears, like other members of the beerage, to be leaving the cheerless days behind it. Trading has improved in each of its divisions. Stockbroker Numis expects year's profits of £72.5m (£70.3m) and has lifted its share target to 120p. Whitbread shares exceeded 1,600p ahead of the results. They are now around 1,550p. The portfolio paid 1,105p. Marston's has topped 100p against a 95p recruitment level.

yourmoney@independent.co.uk