Revealed: The Yorkshire Post business desk's share tips for 2018

READERS WHO followed advice dispensed by The Yorkshire Post business team have enjoyed a very profitable period in recent years.

The share tips offered by the team yielded a 10 per cent return on investment in 2016 and 35 per cent the year prior.

But, what goes up must come down and 2017 proved to be more of a mixed bag with just two of the team’s tips resulting in an increased profit level. So how did the team get on and who are they backing for 2018?

Mark Casci - Business Editor

A win is a win as they say and I will happily take victory in my inaugural share tip prediction, although I cannot deny the razor thin margin.

Leeds-based transport software provider Tracsis is one of Yorkshire’s most impressive business success stories in recent years and that is why I backed them this time last year.

On the face of it, Tracsis saw modest but solid growth of just under 1 per cent in 2017.

It enjoyed another successful year, having won a major multi-million pound contract with a major UK rail operator in July. The contract will be delivered over four years and includes the renewal of some existing systems

In its full year results the firm reported a big jump in annual profits and it can look back on 2017 as a year of progress, consolidation and growth following the acquisitions of SEP and Ontrac, which have substantially increased the group’s client base.

In all revenue rose 6 per cent to £34.5m in the year to July 31 and pre-tax profit rose 14 per cent to £4.6m. So all in all a success, albeit a minor one.

I must confess that I have seriously racked my brains as to where to plant my flag for 2018.

Among the companies I came close to backing include newly-floated Sumo Digital in Sheffield, who are targeting a whole raft of acquisitions in the coming months and Sirius Minerals who enjoyed a very successful 2017.

However my tip this year lies in the financial sector.

Clydesdale Yorkshire Bank (CYBG) had a splendid 2017. Since becoming a plc and demerging from National Australia Bank it really seems to have its mojo back.

In November it posted bottom-line pre-tax profits of £77m for the 12 months to September 30 against a loss of £285m the previous year.

The Yorkshire Bank brand is back where it should be and I was heartened to hear its chief executive David Duffy saying he wanted the company to be both the “bank of the north” and to be focused on the small and medium-sized business sector.

It is an oft-mentioned cliché that SMEs are the engine room of the economy and I see this being truer than ever in 2018, meaning that the bank’s strategy has the potential to be a real winner.

Another string to its bow is the deal with fintech EzBob which will dramatically reduce the wait time for firms to access capital.

In general the top team seems to have a really positive vibe about them, one that it has to be said is infectious, hence my plumping for them.

Regular readers of my column know I am an unashamedly partisan in my views of our great county and I am extremely proud this year to be selecting a company with that most glorious of words, Yorkshire, in its title.

Here’s to another great year for all of our firms, listed or otherwise.

The economy may be turbulent but in my experience most companies are ignoring the Brexit melodrama and cracking on with business.

Ros Snowdon - City Editor

As city editor of The Yorkshire Post, I’m expected to have a firm understanding of where our Yorkshire plcs are heading over the coming year.

Anyone who backed my share tip for 2016 ​​(​Clipper Logistics, the firm that distributes goods for blue chip retailers such as Asda, Morrisons, John Lewis and A​sos)​ would have enjoyed a 33 per cent increase on their investment.

Unfortunately I didn’t do nearly so well in 2017.

I chose keyhole surgery instruments maker​ ​Surgical Innovations​, which has actually had a really good year, but the market is yet to take note of the firm’s renaissance.

Three years ago the firm was in deep trouble – 2014 interim results revealed that revenues had more than halved from £3.9m to £1.8m and write-downs saw a dramatic swing to a loss of £3.2m.

In May 2015, full year results revealed the full scale of the problem with exceptional items of £8.4m. Revenues nearly halved to £4m and the group reported a whopping pre-tax loss of £9.8m.

Yet three months ago the group reported first half results at the top end of expectations, ​​with a 14 per cent increase in revenue to £3.5m. It made a pre-tax profit of £300,000, up from a loss of £60,000 in the first half last year and an annual profit of £280,000 last year.

The shares peaked in August 2017 and anyone who cashed in then would have made an eight per cent gain. However by the

end of 2017 they would have

made a loss of 15 per cent. Sorry folks.

This year I’m going for urban regeneration housebuilder MJ Gleeson. The Sheffield-based firm says customers are queueing up on site opening days as more home buyers look to buy houses in former pit villages and other deprived areas in the North of England.

The group’s forward order book at the end of November was up more than 30 per cent on last year.

The firm, which​ ​specialises in building houses on land that no-one else wants to buy and turning it into a desirable

area that rejuvenates the

local economy, said demand remains strong. Gleeson

has said the Government’s

Help to Buy scheme remains popular.

A hefty 63 per cent of Gleeson’s customers took advantage of Help to Buy last year and this look set to continue in 2018 whatever happens to the economy.

The Autumn Budget produced a windfall for housebuilders with the news that stamp duty is to be abolished for first-time buyers on properties up to £300,000, which was warmly welcomed by Gleeson.

Some 75​ per cent​ of Gleeson’s customers are under the age of 35​ and​ 92​ per cent​ of them are first-time buyers.

Meanwhile, all of Gleeson’s houses are under £300,000 so the Chancellor has effectively abolished stamp duty for all of the group’s customers.​

Gleeson’s shares closed 2017 at 770p after a strong year and I think more good news will come in 2018.

Greg Wright - Deputy Business Editor

LIKE the clanking of Jacob Marley’s chains, the curse of the Greg Wright festive share tip always seems to cause a year-long headache for one of our region’s CEOs.

Over the last 14 years, I’ve been an erratic performer in the share tips stakes. Companies that seemed in rude health are often hit with profit warnings and devastating boardroom feuds shortly after receiving my blessing.

I’ve had the odd stunning success, but in general my performance has proved that wise investors need to display patience if they want to reap rewards. You need to analyse more than one year’s performance to gain an insight into any PLC’s true worth.

Last year, I was certain I had backed a winner; Bradford-based supermarket chain Morrisons, which is led by the canny David Potts.

I believed Morrisons would be a strong investment in 2017 because its leader was a no-nonsense retailer who was returning the business to its core values.

Morrisons’ bosses continued to do all the right things last year. In September, Morrisons beat expectations with a 40 per cent leap in half-year profits. Morrisons said that two-thirds of its products are British, which has helped it to keep inflation down as import costs rise.

Mr Potts has led a recovery of the grocery chain by investing in price cuts and closing under-performing stores.

Morrisons said in August that it will relaunch the Safeway brand after striking a deal with McColl’s to supply the convenience store chain with groceries.

Analysts have praised Morrisons for focusing on its strengths and not becoming preoccupied with the weaknesses of others. Mr Potts is happy to let his competitors tie themselves in knots, while he quietly gets on with the job.

This solid performance did not, alas, lead to a significant rise in the share price. Morrisons’ share price closed 2016 at 230.7p. It closed 2017 at 219.65p. I still believe that Morrisons is a sensible, long-term investment with a wise leader and a strong balance sheet.

So which CEO should be reading today’s page with trepidation, as I reveal my share tip for 2018? I predict my “curse” will hold no power over my chosen company, which has its sights set on bold expansion Down Under.

Sheffield-based ITM Power, the energy storage and clean fuel company, has just announced that it has established a subsidiary in Australia.

Graham Cooley, ITM’s chief executive, described it as a first step that will allow ITM to capitalise on significant growth opportunities in Australia.

The Australian government sees renewable energy as a priority, and I predict that the new subsidiary, which is led by an industry veteran, will generate handsome returns. ITM Power PLC’s share price closed at 38.92p in 2017.

Ismail Mulla - Business Correspondent

Having topped the charts last year with Sirius Minerals, the pressure was on to continue my fine form in picking corporate winners.

If you had stuck with my pick in 2016 you would’ve seen a 31 per cent rise over the year.

Like an English batsman averaging 80 heading into an Ashes Test series down under I was feeling quite confident.

So for 2017 I decided to take guard at the crease with Filtronic as my pick.

In 2016, Filtronic’s share price more than doubled, CEO Rob Smith had turned things around after a turbulent period in the Leeds-based company’s history and demand for mobile data was burning hotter than ever.

Everything was in place for me to maintain my handsome batting average.

The year started well and aside from a dip just before May, I’d seemingly pulled off another solid pick.

Opting for Filtronic seemed to have been an inspired move in October. I even began gloating about my imperious form but then things got lumpy.

In the final over, came the dreaded update that half year revenue and operating profits will be down on last year, with the CEO saying that sales were expected to “continue to be lumpy until we further broaden our customer base and the markets we serve”.

My share tip served up a late googly and I’ve been left with my stumps dislodged, pride wounded and my imperious track record for picking winners in tatters.

This year, rather than going for a company that is on an upward trajectory I’m picking one that’s been through the mill.

IT services firm Redcentric saw its share price nosedive in November 2016 after it announced a historic overstatement of net assets and profit which ​led​ to a £2​1m hole in its finances.

The Harrogate-based company has spent the majority of 2017 getting its house in order. Redcentric said it was returning to “business as usual” and I believe the share price is yet to reflect that.

It has appointed Chris Jagusz, who has a wealth of sector and managerial experience, as its new CEO.

The chief financial officer Peter Brotherton has been in place for more than a year.

All the pieces are in place to now power on with a recovery.

Andrew Darley, analyst at FinnCap, said Redcentric’s interim results demonstrated that the goals needed to reassure the market had been delivered.

Redcentric closed 2017 at 91p.

John Grainger - Business Correspondent

As one of only two members of The Yorkshire Post’s business team to enjoy a share price gain over the year, you might think I’d be feeling rather smug.

But the inescapable fact is that this is the first time I’ve ended the year in profit; the past two years have resulted in losses – one of them steep.

Frankly, a chimp armed with a copy of the FT and a felt-tip pen might have done better.

So, pushing all thoughts of triumphalism aside, which stock was it that dragged me across the finishing line?

Leeds-based property develop-ment company Town Centre Securities (TCS) presides over an empire of office and retail space that stretches from London to Edinburgh, and includes Leeds’s own Merrion Centre.

It has a strong track record and follows a policy of extracting maximum returns on its investments, selling them on when they start to tail off.

Its share price started the year at 277p and has ended it at 292p, giving a 4.3 per cent profit. That may seem rather modest – and it is – but there’s been plenty of drama along the way. TCS’s half-year report published in February sent its share price up to 295.5p, but it then plummeted back down to 270.75p at the end of the tax year in April.

It soared again to 295p in June, sank to 275p in July and then peaked – twice – at 318.75p in October. The price then slumped – slowly, this time – to 270p by mid-December, and has spent the last couple of weeks yoyo-ing back up again.

With a ride like that, it may well sink to 270p by February, but then, year-end is our cut-off date, and a win’s a win: I’ll take it.

This year, I’m opting for Vp plc, the Harrogate-based equipment hire specialist. Its share price nosedived from 437p throughout 2008, bottoming out at 115p, and took five years to recover, but has since climbed steadily and now stands at 894p.

The company’s performance has been enhanced by a string of acquisitions: Jackson Mechanical Services for £3.6m and Zenith Survey Equipment for £3.85m, both in April, and then in November, Brandon Hire for £41.6m. This last one was large enough to attract the attention of the Competition and Markets Authority (CMA), which is investigating the deal.

Nevertheless, I’m banking on a clean bill of health from the CMA, combined with an upturn in activity in the infrastructure and construction sectors which are Vp’s bread and butter.

If this comes off, I may yet start looking slightly more shrewd an investor than the chimp with the felt-tip pen.