Winners and losers of the FTSE 100 in the first three months of 2019

3 April 2019

The first three months of 2019 the blue chip index has managed to return investors an impressive 8.2%.

Despite the Brexit circus since the start of the year, the FTSE 100 has seen solid performance. In the first three months of 2019 the blue chip index has manged to return investors an impressive 8.2%, on a total return basis.

Leading this strong performance was retailer Ocado, which has been able to return investors 75.4% since the start of January.

The company’s share price rallied on the back of two major deals it struck according to Russ Mould of AJ Bell: “The first was to sell half of its online food retailing business to Marks & Spencer for £750 million, creating a new joint-venture between the two companies,” he notes.

Second, the company agreed a new licensing deal for Ocado Smart Solution technology with Australian retailer Coles.

Mould says that these two companies show the new direction Ocado is taking, with less emphasis on fulfilling delivery and more on profiting from allowing other firms to use its much valued technology.

“Analysts are already wondering when the next step for boss Tim Steiner and team will be to sell the other half of the joint venture to Marks & Spencer and get out of delivery altogether,” says Mould.

The second strongest performer in the first quarter was Micro Focus, with a total return of 46.9%. According to Mould the performance was driven by bog standard fundamentals. He says: “The company has two things in its favour: an operating margin that exceeds 35% and fabulous free cash flow.”

Taking third place was Next, which has returned investors 40.7% since the start of the year. Despite the company forecasting a fourth consecutive year of falling profits, investors have been attracted to the growth of the retailer’s online business. “The company now generates more profit online than it does from its high street estate,” says Mould.

The losers of the FTSE

On the other end of the index was travel agent TUI. It lost investors 35.8% after it was forced to issue two profit warnings. The company pinned its troubles on British holidaymaker’s choosing to stay home last year’s hotter-than-usual weather and the weak pound.

Centrica also saw poor performance, down 15.7% on the year. Driving this was continued fears the British Gas owner may be forced to cut its dividend again. Despite chief executive Iain Conn’s commitment to keep dividends at 12p-per-share, weak full-year results fanned fears that the company would carry out a third cut in six years.

Finally, textbook publisher Pearson came under pressure as analysts continued to fret about the threat the internet poses to the firm’s business model. It has lost 10.9% since the turn of the year.   

1OcadoFood & Drug Retailers75.4%
2Micro FocusSoftware & Computer Services46.9%
3NextGeneral Retailers40.7%
4EvrazIndustrial Metals & Mining30.8%
5Just EatGeneral Retailers30.8%
 FTSE 100All companies8.2%
97NMC HealthHealthcare Equipment & Services-14.8%
98CentricaGas, Water & Multi-utilities-15.7%
99International Consolidated AirlinesTravel & Leisure-18.3%
100TUITravel & Leisure-35.8%

Source: Refinitiv data. *Total return. Covers period 31 December 2018 to 31 March 2018

This article first appeared on our sister website Money Observer


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