Derek Pain: Not easy being green with TEG, but I'm bowled over by Essenden

I have been thinking about dumping TEG, the environmental group, from the no pain, no gain portfolio. The shares, enlisted 30 months ago, have been a bitter disappointment. I don't think the price has ever been in the black; it is now around 5.5p compared with the 8p recruitment level.

But after studying the group's yearly report that arrived last week, I have decided to give the shares one last chance. The company has for long offered much promise but has failed to deliver. There is, however, the possibility it is at last seeing the wood from the trees and maybe more prosperous days are not too far away.

It's true that last year was a difficult one for the group that develops and operates composting and energy plants – the sort of occupation that should win acclaim in this green-conscious age. But losses came out at £2.5m against just over £1m in 2012. As far as I can trace, TEG has always found it tough turning ambition into hard cash. Its fall from grace is illustrated by its shares which, in distant days, topped 150p.

It was hopes of better times that encouraged me to initially enlist the shares. Perhaps I am being naive as similar thoughts have prompted my stay of execution. Yet despite the significant increase in losses, there are distinct signs of improvement. For example, the Dagenham composting plant has recently opened. It can accommodate 50,000 tonnes of food and green waste a year, provide power that will be sold to the National Grid as well as tonnes of compost for agricultural use. TEG has a 24.5 per cent stake and will run the facility, generating £1.3m a year. A similar plant is planned at Gaydon, Warwickshire,

In addition, the group's Perth plant, which turns food waste into electricity, seems to be progressing well and there appears every possibility that the long-running problems involving its interests in the Manchester area are near to being resolved, which would benefit the income stream.

I don't expect TEG to be transformed overnight. The shares remain speculative. But it is in a go-go industry and investors may not have caught up with the possible change in fortunes.

I still have reservations about Animalcare, the veterinary products group recruited the same time as TEG, and will probably sell the shares in the not too distant future.

One share I regard as a firm hold is Essenden, the ambitious tenpin bowling chain. True, the shares have lost ground since the capital reorganisation. At one time they topped 100p, but are now around the 66p mark.

I suppose the decline was inevitable as so many new shares flooded on to the stock market as loan notes were exchanged for much more tradeable shares. But the group continues to perform well and I have a sneaking suspicion that the transformational deal chief executive Nick Basing has in mind may not be far away. One possibility could be another tenpin bowling business.

Mr Basing, in a recent trading update, said like-for-like sales in the first 20 weeks of the year were up 6.1 per cent. The advance was being converted into improved site performances, compensating for closed bowling ventures on short leases.

Essenden expects "further financial progress" this year, although the World Cup in Brazil could impact on sales in the next few weeks. Still, it's an ill wind... other portfolio constituents, such as Marston's and Spirit Pub Co. should be among the beneficiaries of the extravaganza of international football.