Irish shares rank best, and worst, in Europe

A handful of Irish-related shares, including Tullow Oil, Glanbia and Bord Gáis owner Centria, were among the big stock market losers in Europe in the past year. Flutter Entertainment, which owns Paddy Power and Betfair, as well as Ryanair and Kerry Group were, however, among the big winners.

Irish shares rank best, and worst, in Europe

By Eamon Quinn and Geoff Percival

A handful of Irish-related shares, including Tullow Oil, Glanbia and Bord Gáis owner Centria, were among the big stock market losers in Europe in the past year. Flutter Entertainment, which owns Paddy Power and Betfair, as well as Ryanair and Kerry Group were, however, among the big winners.

Overall, it’s been a pretty good year for European stocks. The benchmark Stoxx Europe 600 Index ended the year up 23%, more than recovering from a selloff in 2018, and close to its record high.

Among individual stocks, 12 companies in the index have seen their shares double in value, while the year’s worst performer — Tullow — fell 64%.

This year’s top performers included an international meal-kit startup and a maker of industrial compressors, while Glanbia and Europe’s banks have been among the laggards.

Tullow shares plunged in one day in December to their lowest in 15 years as the firm warned of production issues in Ghana, suspended dividends and announced the exit of its chief executive. It was the second plunge in a month, after news that the company reassessing its discoveries in Guyana.

Glanbia got caught up in difficulties in the US: Its shares slumped in July after a profit warning and Goodbody analyst Jason Molins expects “muted” growth in 2020. “Given the ongoing challenges in the business and limited earnings momentum, we maintain a cautious stance,” he said.

Not all share-price moves were news-driven, notes Jeffrey Taylor, head of European equities at Invesco.

“At a stock level, there are plenty of examples of outperformance being driven by re-rating rather than fundamentals alone,” he wrote in a note to clients. Mr Taylor said he’ll remain focused on value rather than growth in 2020.

“We see an interesting combination of still loose monetary policy and supportive fiscal trends,” he said.

Shares in London-listed Centrica, which owns Bord Gáis, slumped in July as it announced its first dividend cut since 2015, along with chief executive Iain Conn‘s departure, hurt by both a UK government-imposed cap on consumer energy bills and by outages at nuclear plants and gas wells.

The UK election result provided minor relief for Centrica after Jeremy Corbyn’s resounding loss effectively ended the likelihood of a broad nationalisation of UK utilities.

The overall winners across Europe were telecoms firm Altice, with a gain of almost 240% and Hello Fresh which surged by over 200%. Altice shares jumped in August after it raised full-year guidance while reporting twice the growth that analysts expected in the quarter and shares in HelloFresh reflected the popularity of meal kit delivery maker.

HelloFresh’s latest quarterly update last month delivered numbers “at the very top” of guided ranges, while marketing costs have fallen, Berenberg analyst Robert Berg said.

Zalando was another winner. Shares in the German online fashion retailer more than doubled after it issued an upbeat profit guidance and accelerated its sales growth by convincing more brands to use its site to sell clothes, with companies able to build their own virtual stores on the platform.

In Ireland, after its tentative gamble on North America, Flutter shares ended the year 56% higher following its October mega-purchase of Canada’s The Stars Group. It is now valued at €8.5bn.

Ryanair shares roared back to finish 36% higher in the year, while Kerry Group soared by 29%, to value the Irish food multinational at just short of €20bn. Kerry shares gained despite it losing out in its bid to buy DuPont’s nutritional division.

Additional reporting Bloomberg

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