FTSE 100 winners and losers in 2017

Tom Bailey crunches the numbers to find out the FTSE 100 winners and losers in 2

Property companies have been among the biggest winners in the FTSE 100 in 2017. Of the ten companies on the index with the largest total return, three were homebuilders (see first table below). 

The third best performer in the FTSE 100 was Persimmon, returning 57 per cent, while Barratt Developments, came eighth, returning 46 per cent and Berkley Group Holdings, fourth, providing returns of 52 per cent.

Such companies have continued to benefit from the UK’s booming housing market. The housebuilder sector overall has been on a hot streak since the end of the financial crisis, with the prices of some shares rising by up to sevenfold since the start of 2010. This period has been something of a sweet spot for the sector, as it has benefited rock-bottom interest rates, very cheap mortgages and a chronic housing shortage, among other factors.

The fortunes of UK housebuilders also looks likely to continue into the future: recent research by Redburn showed that despite nominal UK house prices being around 10 per cent about pre-crisis levels, mortgage costs are still just 22 per cent of income, suggesting affordability is not stretched. At the same time, land prices have largely stayed stagnant. 

Berkley in particular has seen strong profit growth: it recently revised upward its projected pre-tax profits starting from May 2016 from £3 billion to £3.3 billion. Following a surge in its share price, it was readmitted to the FTSE 100 index in August, after it was relegated following reaction to the EU referendum result in 2016. 

-Struggling Royal Mail relegated from FTSE 100

Another top 10 FTSE 100 performer, NMC Health, also saw itself added to the FTSE 100 this year. The private health care provider, based in the UAE, is expected to expand its operations into other Middle Eastern countries, such as Bahrain, Egypt and Qatar. Partly as a result of this potential expansion, total returns from the Emirati firm soared by 89 per cent, the FTSE 100’s biggest winner of 2017.

It has also been a good year for airline companies, in particular International Consolidated Airlines (returning 49 per cent) and EasyJet (returning 47 per cent). Last year, as a result of the fall out from Brexit, both were both among the worst performers in the market.  

International Consolidated Airlines, which owns British Airways, posted strong profits this year. Alongside lower fuel costs, the company also benefitted from both the collapse of rival Monarch, including both increased bookers and, through the purchase of Monarch’s Gatwick slots, increased destination and capacity. 

In second place came the payments processing company Worldpay. Processing online payments, the company is well positioned to benefit from the growth of e-commerce. Its success has not gone unnoticed: earlier this year it was announced that it will be purchased by a US rival Vantiv for £9.3 billion. Helped by this, the company provided total returns of 60 per cent. 

FTSE 100 top 10 winners
Company Ticker % Total retun from 1/1/17 to 13/12/17
NMC
Health
NMC 89
Worldpay
Group
WPG 60
Persimmon PSN 57
Berkeley Group Holdings BKG 52
Intertek Group ITRK 49
International
Consolidated Airlns
IAG 49
easyJet EZJ 47
Barratt
Developments
BDEV 46
Hargreaves
Lansdown
HL 42
Rentokil
Initial
RTO 41

 

Losers

Energy companies have faced a tough year. Both of the two major political parties have been gunning for them, with the Conservative Party committing itself to some of energy price cap. It should come as no surprise then that the worst performer in the FTSE 100 this year was Centrica. The parent company of British Gas provided total returns of -35 per cent. Its share price is now at a decade low. 

Another British utility giant, BT Group, has also had a bad year. The telecoms firm gave investors a return of -24 per cent. BT has suffered from disappointing growth and earnings reports as well as a large pension deficit running above £7 billion.

Shire, a Jersey-based pharmaceutical company provided negative returns (-21 per cent), due to both manufacturing problems faced by one of its drugs as well as stiff competition. Despite this, its Q3 results were better than expected, with revenue increasing year on year by 7 per cent. 

Another loser in the FTSE 100 was drug maker GlaxoSmithKline, with total returns of -11 per cent. Part of the reason behind this fall was a recent announcement by chief executive Emma Walmsley that the company was looking to beef up its consumer division through a number of possible acquisitions. 

ITV has continued to struggle, being included once again among the top 10 worst performers in the index. This year the broadcaster gave total returns of -15 per cent, a slight improvement on its negative return of -20.5 per cent last year. 

FTSE 100 top 10 losers
Company Ticker % Total retun from 1/1/17 to 13/12/17
Centrica CNA -35
Babcock Int Group BAB -25
BT Group BT.A -24
WPP WPP -22
Shire SHP -21
Mediclinic
International
MDC -20
Merlin
Entertainments
MERL -17
ITV ITV -15
Land Securities Group LAND -13
GlaxoSmithKline GSK -11

 

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