I like this guy… but I’d hate to be in his shoes now…
A terrible time to be in property…
But here’s a much better idea: a recession-proof sector…

‘Let me tell you where I am,’ they say on Dragon’s Den. But today, let me tell you not where I am but where I would not like to be. And where I would like to be.

I would not like to be in the eye of this financial storm. I would not like to have a job in an investment bank. I would not like to be an estate agent. I would not like to be Stephen Wicks, about whom I will tell you more in a moment.

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Instead I would like to be in a nice recession-proof job. A university professor, say. Or a doctor. Or a broadcaster. Jonathan Ross, perhaps. Or Terry Wogan.

But the question that has been occupying my mind these last few days is how to find a nice business that we can invest in? One that is also recession-proof and growing. I think I have found one, and you can read about it in the October edition of Red Hot Penny Shares. If you’re subscribing, it will land on your door mat on Saturday and in your email inbox tomorrow. If you’re not subscribing, I’ll show you how you can get on this list in a moment.

I like this guy… but I’d hate to be in his shoes now…

But before that, let me get back to Stephen Wicks… and why I would not like to be in his shoes right now. It’s nothing personal, you understand. I have met Stephen. He is friendly, entertaining and interesting. He is also a highly successful businessman who has made a lot of money. I like the guy.

But let me tell you where he is. He is in the property business. Worse than that, he is about as near to the eye of the storm as it is possible to get without being swept up by its hot dragon’s tongue and transported to the land from which none return…

Wicks’s company is Inland plc. The shares are quoted on AIM under the ticker ILND and can be yours for 12p (if you’re brave enough). Although, I’ll be clear: I am making a recommendation on them either way.

I have written about Inland before in Penny Sleuth. Long-time readers may recall that it is in the business of acquiring brown field sites. It clears them up, gets planning permission and presents them to builders, all neat and ready for the first trench to be dug or the first pile to be driven. Wicks makes no bones about the current situation. ‘I have been in this business for thirty years,’ he told me, ‘and this is the worst that I have ever seen.’

It’s a tough job at the best of times. The task of taking a site through the planning process is for strong souls only.

‘I would have thought,‘ I ventured, ’that with the building industry grinding to a halt, planning officers might be able to finally reduce that pile of paper in their in-tray.’ Not so, it seems.

‘They just spin out whatever work they have,’ Wicks told me. ‘So it takes even longer. We have a team of twenty people soldiering away trying to progress planning applications, and they are just waiting for their calls to be returned. The system is in melt-down. Planning officers are poorly paid and their morale is at an all-time low.’

A terrible time to be in property…

Given the frustrations, you wonder why Wicks want to be in the business at all. Especially in today’s climate. This year he saw a developer pull out of a project to build a hotel on a former hospital site near Heathrow after the council’s policy officer over-rode the decision of the planning department to grant it permission. The policy officer decided that the land should be earmarked for flats instead, so that the council could meet its Government-imposed target for new homes.

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And in Exeter, Inland’s planning permission for a new hotel next to the station was overturned after objections from local residents – ‘who tend to object to anything that moves’, said Wicks – so now the matter has gone to appeal.

Here it will join seven other projects in the appeal process, representing about one third of Inland’s portfolio which is spreads across the south of England. But although he does not like it, Wicks is used to dealing with recalcitrant planners.

What is different today is that even if he does steer a site through the process, house builders don’t want it. Home buyers cannot get a mortgage, so house builders cannot sell houses, so they are not buying land. So Inland is trying to interest developers of other projects. Budget hotel operators are still in the market, Wicks told me, while government backed housing corporations and care home operators are also active.

But it is tough, all the same. Tough to get planning and even tougher to make land sales. This does not feel like a great place to be. If Wicks was presenting Inland as an investment opportunity in the Dragon’s Den right now, you can be pretty sure that the end of the sentence, ‘Let me tell you where I am…’ would be: “I won’t be investing. I’m out.” Or words to that effect.

But here’s a much better idea: a recession-proof sector…

So where can we go instead with our money. So many traditionally defensive havens do not seem quite so defensive any more, and I don’t just mean a bank account. Food manufacturers have been hit by the rising cost of ingredients, utilities are under political pressure to cut prices, pharmaceutical companies face challenges from generic manufacturers. Companies in so many industries are facing declining demand.

But there is one industry that defies recession: Sport. No matter how bad things seem to get, we still want to watch football, motor racing, rugby or whatever our favourite sport is. It offers a distraction and a balm in troubled times.

The business of global sport is worth over $100bn and is growing rapidly. It’s not easy to invest in the growth of this industry, but I have found a way. I’ve discovered a company whose record bodes well and is thriving in a competitive business. Its shares are on a rating that is far too low, considering the sector it is in.

I’m recommending this company to Red Hot Penny Shares readers in my latest newsletter. My target is to double their money in the next 12 months. To discover exactly why I think this company can deliver this investment return, you should have a read of my latest issue.

Join Red Hot today and get my latest tip…

All you need to do is sign up for a trial subscription to Red Hot Penny Shares. Don’t worry, it’s not expensive – and in fact, if you decide it’s not for you, you can get the small fee back at any time in the first three months (and still get to keep all the research and tips that I send you in that time. A crazy offer, if you ask me, but that’s what my publisher insists on!)

I think you’ll like what we’re doing here at Red Hot, so you have nothing to lose in checking out the service. On the other hand, you have plenty to gain. If I’m right about this sports sector tip, you could double your investment in 12 months. Sound good?

Plus, you’ll get my other favourite Red Hot Penny Share recommendation. Click here to read about that and you’ll see exactly what to do to receive my research.

That’s all for today. I hope you enjoy the latest Red Hot issue when it arrives…

Tom Bulford
for The Penny Sleuth

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P.S. If you want to follow the tales of a small company investor, and uncover the hidden gems of the stock market, then sign up for the Penny Sleuth e-letter. It won’t cost you a penny…

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