Derek Pain: 'The Fulham Shore is starting to dish up some enticing figures'

Creating a restaurant chain takes time and patience. The latest figures from The Fulham Shore demonstrate there is no short-cut to catering success. From a standing start four years ago, the company has developed into one of the most promising players in the bitterly competitive but still thriving eating-out business.

After a spell on the fringe ISDX share market, it graduated to AIM last year as it completed its first big deal, the £13.9m acquisition of the Real Greek restaurants. Since then it has carried out an even more ambitious expansion, the £27.5m takeover of the Franco Manca chain. Both were financed by a mix of cash calls and shares.

Today the group runs 24 restaurants. It has two openings planned and is on the look-out for expansionary opportunities.

The business, run by the experienced restaurateur David Page, has just produced its first AIM figures. They tend to underline that patience can be a virtue.

The figures cover nine months and do not include any contribution from Franco Manca. Revenue was £8.3m and what are described as headline operating profits emerged at £790,000, against £1.2m for the previous 12 months. There is a loss once the tax bill is included.

The shares shaded a little to 16p but, as I write, are still showing the No Pain, No Gain portfolio a handsome return as they were 9.5p when recruited shortly after their AIM début. Still, they have been as high as 24p this year.

Mr Page is not downhearted. "We are excited about the new financial year," he says. With the two restaurant chains firing on all cylinders and some of the takeover costs already absorbed, I expect a much improved performance this year and the shares are worth retaining.

Avation, a long-time portfolio constituent, has attracted a "buy" recommendation from a US stockbroker. Not many small-cap London quoted companies can claim such a distinction, but then the aircraft leasing group has an international presence. Besides its British connection, it has close links with Australia, is based in Singapore and conducts its financial operations in US dollars. In addition its customers – and therefore its aircraft – have a worldwide dimension.

The broker is RW Pressprich, an employee-owned New York-based firm. It has put a 12-month target price of 177p on Avation's shares and comments: "The stock trades at a discount to peers, despite strong margins in terms of revenues and returns on assets and equity, as well as solid growth prospects."

The portfolio enlisted the shares four years ago at 83.5p; they are now around the 137p mark; they once nudged 180p.

Finally, Lloyds. With half-year pre-tax profits emerging at £1.2bn, it declared another 0.75p-a-share dividend. There are also suggestions it will make special dividend payments or launch share buybacks. Meanwhile the Government's rescue stake, at one time 43 per cent, continues to be reduced, partly through dribbling shares on to the market. It is now down to just under 14 per cent. The bank's shares are around 83p against the 74.8p the portfolio paid two years ago. Not, so far, a great investment but I think there is much further to go. Indeed many bank shares, despite the problems in the industry, look worth acquiring.

yourmoney@independent.co.uk