Best and worst FTSE 250 stocks of 2020

by Graeme Evans from interactive investor |

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Despite the pandemic, there were six mid-caps that more than doubled in value over the past year.

The fantasy world of Games Workshop (LSE:GAW) offered FTSE 250 investors some respite in 2020, as the retailer's soaring share price took its valuation £1 billion beyond former blue-chip Centrica (LSE:CNA)

The contrast between the two stocks has been stark, with the company behind the Warhammer brand now worth a remarkable £3.5 billion after shares surged another 76%, as fans of the dungeons and dragons-style games bought merchandise in the lockdown.

Centrica lost its FTSE 100 status in the summer and has fallen by 53% in a year when demand from factories and offices was shorted by the pandemic. The slump represents further frustration for long-suffering former British Gas shareholders, who have held out hope that a new management team can finally lead a turnaround for the power supplier.

A bigger-than-expected £2.85 billion deal to sell North American energy supply arm Direct Energy put a dent in its debt pile, but the company still had to suspend its dividend at a time when other utilities such as SSE (LSE:SSE) kept up awards in the face of Covid-19.

Centrica was far from being the worst-performing stock in the FTSE 250 index, with shopping centres owner Hammerson the biggest of all after a drop of 84% as the virus left many retailers unable to pay their quarterly rent bills.

Covid-19 restrictions caused numerous other FTSE 250 stocks to tumble, with holidays company TUI (LSE:TUI) down 56% and cruise ship giant Carnival (LSE:CCL) 65% lower. The ongoing closure of cinemas and the decision of some film companies to stream new movies at the same time as theatres left shares down 73%, despite gaining some breathing space from lenders.

Food-on-the-go was another casualty after declines of 59% for sandwich maker Greencore (LSE:GNC) and 53.4% for railway station caterer SSP (LSE:SSPG). It could have been much worse for SSP, however, given that shares doubled in value at one point after November's vaccine breakthroughs.

Pub chain Mitchells & Butlers (LSE:MAB), which is behind the brands All Bar One and Harvester, fell 51% after ending the year with restrictions still impacting much of its estate. 

  Worst FTSE 250 performers in 2020  
  Company Share price change (%)
1 Hammerson (LSE:HMSO) -83.8
2 Capita (LSE:CPI) -77.7
3 Cineworld (LSE:CINE) -72.9
4 Carnival (LSE:CCL) -64.5
5 Petrofac (LSE:PFC) -63
6 Micro Focus International (LSE:MCRO) -60.1
7 Greencore (LSE:GNC) -59.2
8 Investec (LSE:INVP) -58.7
9 Babcock International (LSE:BAB) -57.3
10 TUI (LSE:TUI) -56.7
  Source: Sharepad as at 21 December 2020  

And the big winners…

The biggest beneficiary of the pandemic in the FTSE 250 index was AO World (LSE:AO.), which surged 339% in value after lockdowns boosted online demand for domestic appliances. Co-founder and CEO John Roberts hopes it is the start of a structural shift in customer behaviour.

Shares in 888 Holdings (LSE:888) rose 72% after stay-at-home trends encouraged more use of its casino and bingo sites, while the volatile conditions for stock markets boosted activity on trading platforms CMC Markets (LSE:CMCX) and Plus500 (LSE:PLUS) as their shares jumped 164% and 62% respectively.

Stockpiling and more home cooking were a winning recipe for Premier Foods (LSE:PFD), which sells brands including Mr Kipling, Bisto, Batchelors and Loyd Grossman.

Just as important as the improved trading performance was Premier's landmark agreement with trustees about merging three pension funds, which should result in a substantially improved funding situation. Shares jumped 158% during the year.

  Best FTSE 250 performers in 2020    
  Company Share price change (%)
1 AO World (LSE:AO.)   339
2 CMC Markets (LSE:CMCX)   164
3 Premier Foods (LSE:PFD)   158
4 Indivior (LSE:INDV)   151
5 Petropavlovsk (LSE:POG)   147
6 Baillie Gifford US Growth Trust (LSE:USA)   123
7 Ferrexpo (LSE:FXPO)   79.7
8 Allianz Technology Trust (LSE:ATT)   78.5
9 Edinburgh Worldwide (LSE:EWI)   77.6
10 Games Workshop (LSE:GAW)   75.8
  Source: Sharepad as at 21 December 2020    

Away from consumer-focused industries, high-flying tech stock Kainos (LSE:KNOS) surged to record highs after the pandemic accelerated demand for digital transformation services, with the UK government and the NHS among its clients.

A series of profit upgrades meant the Belfast-based company, which is also a Workday software partner, rose 67% over the year. Shares made their debut in 2015 at 139p but are now changing hands at close to 1,250p.

It was a similar story at Avon Rubber (LSE:AVON), whose shares traded at all-time highs in 2020 after strong demand from the world's militaries for ballistic protection systems and as Covid-19 boosted interest from first responders for its respiratory protection range.

Avon, which sold its division providing milking solutions to dairy farmers, rose 44.5% in the year to just above 3,000p. It had been as high as 4,625p until a bout of profit taking at the start of December triggered by delays on some key US defence contracts. 

Former FTSE 100 software company Micro Focus International (LSE:MCRO) was 60% lower after a rollercoaster year. It continues to grapple with the challenges of the $8.8 billion deal it struck in 2017 for the software segment of Hewlett-Packard Enterprise.

Its half-year operating loss of $900 million included a charge to cover expected sales disruption and timing pressure on renewals due to Covid-19. The company, which helps clients to bridge existing and emerging technologies, finished the year with a flourish, however, after CEO Stephen Murdoch said his turnaround plan was making faster-than-expected progress.

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 data 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.

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