Derek Pain: It’s an inhospitable climate but Marston’s is brewing up sales

Booker, the star of the No Pain, No Gain portfolio, is edging towards inclusion in the blue-chip Footsie share index. Interim results, although slightly disappointing, left the cash-and-carry chain's capitalisation at nearly £3.2bn, with the shares, as I write, standing at 182p.

Before the figures, the price hit a 186p peak. If the shares should exceed 200p it could establish membership of the blue-chip index. And with the benefits of the £40m Budgens/Londis acquisition likely to start flowing next year, Booker could be set for a rewarding time.

But it does operate in a tough, bitterly competitive business. Sales in the first half were hit by curbs on cigarette and tobacco displays and possibly more people giving up smoking. The rest of Booker's volume actually increased.

The group's pre-tax profits advanced 10 per cent to £74.1m and the cash pile, before the Budgens/Londis deal, rose to £118.1m. The half-time dividend is up 10 per cent at 0.57p a share and the promise of a cash handout following the final dividend is underlined once again.

I intend to stay with the stock that has for long out- performed others. The portfolio arrived in January 2009, at 24.5p when Booker was traded on the AIM market. Generally it has been a profitable and smooth ride, but I must admit to serious doubts last year when the price collapsed from around 176p to 115p as the big supermarket chains indulged in fierce discount wars. But the group, with its cash-and-carry warehouses, distribution network and close links with more than 5,000 shops, has managed to avoid any serious damage from the cut-price onslaught.

Of course Booker is not the only company facing tough competition. The hospitality business is probably even more pressurised, with pubs in the front line. Yet Marston's, another profitable constituent, seems to be making progress, with its breweries and pubs increasing sales.

In a trading update, the group said profits are in line with expectations, with beer volumes up 5 per cent and, including the Thwaites brewing take over, achieving a 15 per cent upsurge.

The group is still adding pub/restaurants and hotel facilities to its chain and says it has "substantially" completed unloading its drink-led pubs.

But the restaurant business – and particularly pub/restaurants – seems to be getting intensely fierce. According to a recent survey the cost of three-course pub meals has fallen by 2.3 per cent over the past year.

Such a decline is not my experience but nevertheless could underline the tough conditions the industry faces, even before the new minimum wage structure arrives.

Marston's, which has reshaped its retail estate with an emphasis on what it calls destination pubs and pub/restaurants, is obviously operating in an increasingly crowded market. It has another 20 pub/restaurants in the pipeline and five accommodation lodges.

Marston's, recruited six months after Booker, has been a sound investment but has not performed anywhere near as well as the cash-and- carry chain. The shares were 95p at the time of enlistment; they are now around 159p.

My suggestion last week that Avation could use Capital Lease Aviation shares as currency for acquisitions has been overtaken. After my column went to press it was announced that CLA's AIM listing would soon be cancelled.