The UK has had a strong year despite the Omicron variant, rampant inflation and the last-minute interest rate rise in December, however within this lies some stocks that have shot up, while others have flopped.
Overall, the FTSE 100 index has grown 17.8% in the past year, the second-highest return among major developed markets.
The only indices it failed to beat was the S&P 500, which once again came out on top – the seventh time in the past 11 years that it has made the highest returns over 12 months – and the MSCI Europe ex UK, which had a bumper year.
Total return of indices in 2021
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Source: FE Analytics
Within the FTSE 100, some UK companies’ shares have risen by as much as 72%, while others have fallen by more than 27%.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “There has been a cracker of a performance this year from companies which have shared in the spoils of reopening after the pandemic.
“But investors would have found the performance of some of the pandemic winners hard to swallow this year as some have turned into turkeys in 2021.”
Below, Trustnet looks at the best and worst companies in the FTSE 100 index this year.
Biggest gains — Ashtead
The construction equipment rental company that operates under ‘Sunbelt’, was up 77% over the past year as construction projects regained momentum after slow progress in 2020.
Ashtead’s shares jumped 68% across the year, largely helped by lucrative contracts with the Department of Health in the UK and Joe Biden’s infrastructure heavy stimulus programme in the US.
Streeter said: “Ashtead has roared back into recovery in 2021 after its business renting out construction equipment was severely dented in 2020.”
Demand for improvements in the healthcare, utilities and telecoms sectors have been high in 2021 and Ashtead is diversifying its services ahead of continued recovery efforts in the new year.
Total returns from Ashtead over 2021
Source: FE Analytics
Glencore
The company’s shares rose 67% in the past year due to increased demand for copper lithium and cobalt in manufacturing electric vehicles (EV).
Government commitments to phase out the combustion engine and Glencore’s contracts with carmakers Tesla and BMW, have increased its valuation significantly.
Despite its key position in the EV revolution and Glencore’s own pledges to net zero emissions by 2050, the company’s coal mining branch is under increasing pressure from activists.
Glencore is set to benefit from the rise of EVs next year, but the company’s own environmental impact could put off investors, Streeter warned.
Total returns from Glencore over 2021
Source: FE Analytics
Meggitt
Shares in Meggitt, a company that makes components and systems for aircraft, rose 58% in 2021 after US rival Parker-Hannifin announced a £6.3bn takeover earlier this year.
Even without the proposed bid, the firm was in good shape after the first six months of the year. The manufacturer recorded a profit of £49m in the first half of this year, up from its loss of £349m the previous year.
Latest data from the company suggests it has a firm foothold in the aerospace sector, with 90% of western commercial aircraft fitted with Meggitt fire systems and more than 80% of military fighters equipped with its braking systems.
Total returns from Meggitt over 2021
Source: FE Analytics
Croda International
Sustainable research company, Croda also benefitted from 2021’s environmental boom, growing 53% in the past year. Sales reached £934m in the first half of 2021, up 39% from the year before.
Chief executive Steve Foots said in the firm’s first-half report that the company’s acquisitions of Iberchem and Avanti were key drivers in Croda’s success.
However, the company’s decision to sell off its performance technologies and industrial chemicals branches to the American food processor, Cargrill for $1bn did not go down well with investors — share prices have fallen 5% in the past five days.
Fresnillo
Mexico-based precious metals miner, Fresnillo has declined 19% in the past year as silver and gold has gone down in value. In addition to this, production was delayed when large numbers of miners contracted Covid.
However, with inflation rapidly on the rise, there is a chance that demand for gold and silver could rise again as investors put their money into commodities for security, Streeter said.
Total returns from Fresnillo over 2021
Source: FE Analytics
Biggest losses — Flutter Entertainment
The online bookmaker, Flutter Entertainment went down 24% over the past year after an exceptional 12 months in 2020.
Its share price gain of 67% last year was largely fuelled by lockdown boredom, but as markets reopened, demand has fallen, Streeter said. Likewise, stricter rules on gambling that have been proposed in the UK could reduce earnings further.
However, the company reported a revenue growth of 12% in the third quarter thanks to a steady performance in the US, which Streeter said, “bodes well for a recovery in 2022 in the share price”.
Total returns from Flutter Entertainment over 2021
Source: FE Analytics
Ocado
Grocery delivery service, Ocado faced a flurry of setbacks this year that resulted in a 29% decrease in stock value.
A mixture of labour shortages, rising inflation and high levels of capital spending has led to high pay-outs by Ocado to stay operating.
Meanwhile, the size of orders is far smaller than they were the previous year. Ocado’s shares were up 80% in 2020 due to lockdowns, but now the company is competing more fiercely with physical stores.
Its partnership with Marks and Spencer’s may see Ocado have its best Christmas sales yet, but the company faces a bumpy road in the new year, Streeter said.
Total returns from Ocado over 2021
Source: FE Analytics
IAG
Airline owner, IAG had a turbulent year in the stock market, up as much as 32% over the summer before dropping to -22% later on in the year.
Investment in the company that owns British Airways improved as people began to move more freely after the last lockdown, but the spread of new variants and tighter travel restrictions sent valuations down.
The recent news that Omicron may be less lethal than anticipated has improved sentiment somewhat, with IAG’s shares rising 15% in the last few days.
As it stands, the company is still at a loss of 10% over the past year, but Streeter said: “If enough boosters are rolled out and hospital admissions don’t dramatically rise, prospects look much brighter for the crucial spring summer season.”