Interactive Investor

Best and worst FTSE 250 shares in 2021

24th December 2021 09:26

Graeme Evans from interactive investor

Mid-cap takeover action and the performances of Future, Reach and Watches of Switzerland ensured the record-breaking FTSE 250 index stood toe-to-toe with Wall Street in 2021.

The domestic-focused second-tier index reached 24,353 in early September after a wave of M&A deals included supermarket chain Morrisons, respiratory drugs business Vectura, defence group Ultra Electronics and the temporary power supplier Aggreko.

The FTSE 250 was up for the year by 19% at one point, rivalling the gains being enjoyed by the Nasdaq and S&P 500 in the United States, before the mid-cap index lost some momentum due to rising cost pressures and the prospect of another winter of Covid-19 disruption.

The emergence of the Omicron variant and disruption to leisure activity hit the recoveries of Cineworld Group (LSE:CINE) and Trainline (LSE:TRN) particularly hard, with their shares down 51% and 41% up to Monday 20 December.

But several stocks have delivered spectacular returns for investors over the course the year. One of the best has been Watches of Switzerland Group (LSE:WOSG), the luxury watch retailer which operates in the UK and US under brands including Goldsmiths, Mappin & Webb and Mayors.

It recently reported a 63% jump in half-year earnings to £64.7 million, but shares are also being driven by chief executive Brian Duffy's longer-term ambitions for the business. This includes being the clear leader in the US market and establishing a sizeable presence in continental Europe on top of being the UK's largest luxury watch retailer.

Shares are up 138% over the year, having risen from 179p in April 2020 to above 1,400p today.

10 best FTSE 250 performers in 2021

Company  % gain
Watches of Switzerland Group (LSE:WOSG) 138
Indivior (LSE:INDV) 137
Investec (LSE:INVP) 111
Future (LSE:FUTR) 104
Playtech (LSE:PTEC) 85.8
Volution Group (LSE:FAN) 82.4
Reach (LSE:RCH) 77.9
Safestore (LSE:SAFE) 76.0
Greggs (LSE:GRG) 69.2
Airtel Africa (LSE:AAF) 67.5
Source: Sharepad as at 20 December 2020. 

Momentum has also been with addiction drugs company Indivior (LSE:INDV) as the former Reckitt Benckiser (LSE:RKT) division rebuilds after being ordered to pay $600 million (£451 million) to US authorities to settle a legal case over the marketing of its best-selling treatment Suboxone Film.

The proceedings left shares below 30p at one point in 2019, but they are now back at 264p after Indivior raised its full-year guidance in October. The company also highlighted that long-term US market growth is expected to be in the mid-to-high-single digit percentage range due to the increased severity and public awareness of the opioid epidemic.

Two media companies were at the forefront of the strong year for the FTSE 250 index after gains of 104% for Future (LSE:FUTR) and a 78% rebound for Daily Mirror newspaper business Reach (LSE:RCH).

Future's rise means it is up 370% from its pandemic low, as a series of better-than-expected updates put paid to City scepticism over the surprise £594 million GoCompare takeover.

Since taking charge seven years ago, chief executive Zillah Byng-Thorne has transformed the Country Life and Marie Claire publisher into a business where 70% of revenues are now generated outside of print.

US and Canada accounts for more than half of global online users, boosted by the addition of titles including The Week, Money Week and Minecraft World following the recently completed acquisition of consumer media business Dennis.

Reach shares were as high as 420p in the summer after seeing continued strong growth in digital revenues alongside further print resilience. The stock has since fallen back to 268.5p, reflecting City concerns over rising energy and newsprint costs.

Among the second tier's other best performing stocks, building ventilation business Volution Group (LSE:FAN) is now worth £1 billion after benefiting from growing demand for products to improve indoor air quality and energy efficiency.

Shares are up 82% in the year but had been as high as 560p in September, although analysts at Berenberg said a higher price of 620p could be justified based on the company's structural tailwinds and further earnings momentum driven by M&A activity.

A popular stock on the list of biggest FTSE 250 index risers will be Greggs (LSE:GRG) after the bakery chain finished the year at a record high of around 3,218p. The company, which has more than 2,000 retail outlets, recently upgraded full-year expectations after revealing that like-for-like sales were up 3.5% on two years ago despite staffing and supply chain disruption.

It has overseen the net opening of around 100 new shops this year and has a target to double turnover over the next five years to about £2.4 billion in 2026.

10 worst FTSE 250 performers in 2021

Company  % loss
Cineworld Group (LSE:CINE) -51.2
Trainline (LSE:TRN) -41.4
Wood Group (LSE:WG.) -40.2
Aston Martin (LSE:AML) -38.7
CMC Markets (LSE:CMCX) -38.6
Petropavlovsk (LSE:POG) -37.1
Hochschild Mining (LSE:HOC) -36.4
TP ICAP (LSE:TCAP) -34.4
Ashmore Group (LSE:ASHM) -33.4
Lancashire Holdings (LSE:LRE) -32.0
Source: Sharepad as at 20 December 2020. 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.