Derek Pain: 'No hiccups allowed if faith in Whitbread is to be rewarded'

There is no doubt that the shares are expensively rated, but the portfolio is showing a splendid profit

Whitbread has failed to calm the doubters with excellent interim figures, published last month. In fact, some hitherto supportive stockbroker analysts seem to have lost their enthusiasm for an outstanding constituent of the No Pain, No Gain portfolio.

I alighted on to the shares at 1,105p in the summer of 2008. Since then they have hit 5,500p but to listen to some disillusioned voices the heady days are over. Premier Inn, the group's budget hotel chain, is causing the anxiety.

The hotels have been a major influence in Whitbread's acknowledged success. So, too, has the Costa Coffee side but pub/restaurants, a legacy of now distant brewing days, have failed to match the exalted performances of letting rooms and coffee parlours.

It is the competition now faced by Premier that has stirred the rethinks. At least two stockbrokers have downgraded their expectations. Société Générale has cut from "buy" to "hold"; Numis has a "reduce" recommendation.

It is Numis that is the most pessimistic. Before the figures it had a 5,600p target for the shares. Now it is looking for 4,400p, which is below the price as I write of 4,678p. Société Générale has lowered its expectations to 5,220p.

Both are fearful of the impact of an on-line lodging business called Airbnb. Société Générale believes the internet intruder could soon hurt Premier's performance and Numis reckons the shares do not reflect the growing importance of the computerised challenge.

The revived Travelodge chain is also cited by Numis as a threat. Premier's growth could be already slowing down so a rejuvenated major rival should produce much tougher competition. And there are also general worries about the costs to be incurred by the new minimum wage.

Of course, I do not dismiss such concerns. There is no doubt that the shares are expensively rated, which does not allow for any hiccups. But the portfolio is showing a splendid profit and for the time being Whitbread's portfolio position remains safe.

So, too, is the membership of Fulham Shore, the restaurant chain that has just fixed up a franchise deal to open a Bukowski Charcoal Grill eatery in London's Soho. David Page and Nabil Mankarious, the men behind Fulham, have 31.6 per cent of Bukowski, currently with two outlets after its four- year existence, and I would not be surprised if Fulham eventually swallows its new franchise partner. Fulham was purchased last year at 9.5p; the shares are 16.25p after touching 23p.

Finally, Avation, the aircraft leaser. Its ever expanding fleet is acquiring another aircraft – its first Boeing – leased to an unnamed Chinese carrier. With this addition, the group now has 34 aeroplanes and has more in its sights. Full details are still under wraps but the Boeing – a 737 – is eight years old and the present lease has 5.5 years to run.

Avation has tightened its grip on Capital Lease Aviation and now has 98.8 per cent of the capital. CLA's AIM quote is being discontinued. The portfolio picked up Avation shares in January, 2011, at 83.5p. They are below their peak at 133.5p but my present intention is to continue to hold them.