FTSE 250’s best and worst shares of 2022

UK mid-cap shares have had their worst year in a long while and are among the worst-performing stocks anywhere in the world. Will they bounce back hard in 2023? Here are the winners and losers.

Mid-caps in the 50% Club of bombed-out stocks during 2022 included ASOS (LSE:ASC), Moonpig (LSE:MOON) and the strike-hit owner of Royal Mail as the FTSE 250 index experienced a grim year.

From 24,000 in January, the second-tier benchmark fell as far as 16,520 as investors dumped cyclical assets in reaction to the darkening UK outlook and surge in borrowing costs.

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The low point came in October’s aftermath of the government’s mini-budget, before a rebound for the pound and hopes that inflation was near its peak helped steady fortunes.

Even so, the recovery in the FTSE 250 back towards 18,750 hasn’t been enough to ease the pain for followers of many technology and growth-focused companies.

They include the fast-fashion giant ASOS, which lost three-quarters of its value in the year that it joined London’s main market following a successful period on AIM.

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ASOS has 26 million customers, £4 billion revenues and a market leading position in the UK but admitted this year it has become “too complex and overstretched” globally.

Annual profits recently fell 89% to £22 million and cash outflows of £339.8 million left ASOS with a debt position of £152.9 million, highlighting the challenge facing new boss José Antonio Ramos Calamonte. Shares were above 7,500p in 2018 but now stand closer to 500p.

Moonpig joined the stock market in early 2021 but its early success has faded to leave the online greetings card retailer down more than 70% this year at a record low. It recently cut revenue expectations, with the 2023 outlook clouded by ongoing Royal Mail strikes and signs that consumers are trading down to lower gift pricing points.

The fall in tech valuations has shredded the appeal of Molten Ventures (LSE:GROW), the former Draper Esprit business that holds stakes in Cazoo and Trustpilot in a portfolio worth £1.45 billion.

Molten recently reported a net asset value of 837p, significantly higher than a share price that continues to languish around the 350p mark following a 65% fall during 2022.

Future (LSE:FUTR) shares were among 2021’s best performers but the digital and print publisher behind magazines including Country Life and FourFourTwo has fallen back to earth in spectacular fashion as investors revised their lofty expectations.

Caught up in a broader sell-off for media stocks due to fears of an advertising slowdown, Future’s shares have reversed from 3,500p in January to around 1,245p. That’s despite a target to extend its online reach to one in two users in the US and a recent profits performance at the top end of market expectations.

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Shares in Royal Mail, which is now known as International Distributions Services (LSE:IDS) to reflect the profitable European parcels business GLS, were 630p during pandemic lockdowns in April 2020 but fell as far as 173p in the autumn.

Strike action means the UK operation is heading for a full-year loss of between £350 million and £450 million, with no end in sight to the disruption. The shares are down by nearly 60% over the year, but Liberum recently slashed its target price by 38% to 115p.

Other big fallers in the FTSE 250 included chemicals firm Synthomer (LSE:SYNT), which has lost two-thirds of its value due to the slower-than-expected unwinding of Covid-related inventories for its nitrile rubber gloves.

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Among the best-performing second tier stocks, Telecom Plus (LSE:TEP) has continued its remarkable rise since raising £1 million on the former junior OFEX market as a start-up in August 1997.

The Utility Warehouse company, which provides a single monthly statement for services across energy, broadband and mobile, added 86,000 customers in the half year to 30 September as households look for ways to tackle soaring bills

Shares surged another 40% to record levels in the year, aided by recent results showing that revenues rose 51.5% to £562.4 million and profits by 22% to £32.1 million.

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Corporate merchandise business 4imprint (LSE:FOUR) has also been trading at an all-time high as the pace of its recovery from Covid disruption continues to exceed expectations.

The Manchester-based business generates 98% of its revenues from the US and Canada,  where it boosts marketing campaigns by supplying branded products ranging from basic giveaways such as pens and mugs to embroidered apparel and trade show displays.

With corporate America appearing to be in robust health, it is on track to meet or exceed its long-held revenues target of $1 billion during 2022. Shares have risen more than 50%.

Alongside takeover targets RPS Group (LSE:RPS)and Mediclinic International (LSE:MDC), the list of best-performing FTSE 250 stocks includes Energean (LSE:ENOG) after this year’s surge in commodity prices was accompanied by the milestone of the first gas from its flagship Karish project in Israel.

Trading conditions have also been favourable for defence and security products business QinetiQ Group (LSE:QQ.), whose shares are up by around 35% in the year as the heightened threat environment boosts order books across the sector.