I have just returned from my annual salmon fishing week on the Tweed on the famous Hendersyde beat just below Kelso. Originally, my week was in March, but after losing fishing days through swollen rivers and often freezing temperatures I switched to the softer August climate.
Of course, we fishermen always have plenty of excuses — too bright, too windy, too coloured. This time it was very low water and very bright. I was particularly looking forward to this year’s week as I was giving first outing to a fly specially tied and made for me by The Flyfishers’ Club, as I was the guest speaker at their annual dinner. I suggested naming it The Compound Accumulator after my Isa investor life, but they insisted, somewhat embarrassingly, on The Golden Touch.
I met gillie and part-owner Nigel Fenton and we resolved to fish a pool called Little Davey, which had a reasonable flow of streamy water. Nigel quietly rowed our boat as I double spey cast and, after approximately a dozen attempts — bang — I had a solid “take”. It fought hard, but I stood firm.
After a few minutes, Nigel netted my 8lb fish which, slightly coloured, was gently returned to the river. The Golden Touch had scored on its first outing but, truth to tell, that was it for the week — no further “touches” or fish for me. Fortunately for my guests, a four pounder and finally a 13 pounder were caught on the last day, so it was a reasonable bag considering the conditions.
Spending the week alongside the same gillie can sometimes be tedious — few new jokes, even fewer fish — however attractive the surroundings, but not with Nigel, an enthusiastic and knowledgeable private investor. We spent hours discussing his portfolio.
He is the great great grandson of the original joint founder of the former mighty British Belting and Asbestos, once the largest Yorkshire-based company, which at its peak employed 26,000 worldwide. They manufactured Scandura conveyor belting for the mining industry and Mintex brakepads and linings, used by every Allied aircraft in the Battle of Britain, and also the Model-T Ford.
Through acquiring The Guthrie Corporation, BBA became the owner of Page Avjet, a provider of services to the private jet market in the US. In the 1990s, the group was split in two — the textile side ultimately became the separately quoted Fiberweb and the sizeable aviation service side developed from Page subsequently becoming today’s £3bn BBA Aviation.
I bought Fiberweb in August 2013 at 84p and 94p, benefiting from a surprise takeover in December of that year. With BBA, I bought in 2008 and on 11 separate occasions thereafter between 66p and 295p, selling at between 153p and 293p. I finally bade farewell in September 2015, following negative publicity over a planned purchase of rival Landmark. In retrospect, this was probably a mistake. I should have stayed aboard as Nigel did; it is his largest holding, but one can’t own everything.
Following conversations on the water in earlier years he had already joined me as a shareholder in some of my favourites — Christie, where he has virtually doubled his money, Air Partner, Lok’nStore, Charles Taylor, Tarsus and Treatt. Indeed, in the week before I arrived he had bought more of the latter two. He is particularly proud of Renew — his second-biggest holding — which has seemingly quadrupled over five years. Other holdings have a distinctive Yorkshire dimension, including Henry Boot and Town Centre, plus Augean, Scapa and Synthomer.
As we talked on the river, he increasingly bought into my philosophy of holding a smaller number of more focused larger small-cap holdings where the potential of significant growth compares favourably with larger PLCs with perhaps more limited horizons.
Lok’nStore had just issued a very encouraging pre-close trading update — in the past 12 months, three new landmark stores have opened in Hemel Hempstead, Gillingham, and Wellingborough and all are trading well. Construction is under way at Cardiff, Exeter and Dover all due to open next year, followed by development sites in Ipswich, Bedford, Bournemouth, Gloucester, Leicester and Cheshunt, set to open by the end of 2020. Increased bank facilities have been agreed to help fund this expansion.
Near-20 per cent shareholder Andrew Jacobs, the chief executive, said: “In executing our strategy we are producing predictable growth in dividends for investors from an increasing number of stores underpinned by a growing cash flow and asset base.”
Since its announcement, Lok’nStore shares have moved steadily northwards, so perhaps it is Nigel who now has The Golden Touch!
John Lee is an active private investor and author of ‘How to Make a Million — Slowly’. He is a shareholder in all the companies indicated
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