The new influx of Tory MPs should have a big impact on the Government’s need to stimulate growth in the North and the Midlands.
There are 50 new Tory seats and 140 Conservative MPs now represent the North and the Midlands - 38 per cent of the Tory total.
Analysts at Peel Hunt expect the Tories will invest in the region and the beneficiaries will include Yorkshire firms MJ Gleeson, Henry Boot, Marshalls, Polypipe, Harworth Group, Town Centre Securities, Vp, Severfield and Morrisons.
Peel Hunt said increased investment and economic stimulus in the North should be beneficial to housebuilders.
It sees Sheffield-based Gleeson as the “purest play”, with its housebuilding activity focused exclusively in the North and the Midlands. Analysts claimed that demand for Gleeson’s low-cost homes is strong and could be boosted by a stronger economic backdrop.
They also picked Sheffield-based property developer Henry Boot, which has activities across property investment & development, strategic land and construction.
Henry Boot’s construction division is focused on the North and the Midlands.
Peel Hunt said that increased spending on infrastructure is likely to be part of the Government’s plans.
It stock picked Elland-based paving specialist Marshalls and Doncaster-based pipe manufacturer Polypipe in the building materials sector, saying that both firms have healthy exposure to this end market.
In the real estate sector, Peel Hunt said employment, infrastructure improvements and broader economic growth are amongst the largest drivers of property prices. Its analysts said increased Government investment is likely to have a positive impact on a number of companies which have significant exposure to the North.
They said Rotherham-based land regeneration firm Harworth appears to be ideally positioned with its aim to become “the leading land and property regeneration specialist in the North of England and Midlands”.
Other companies with significant exposure to the North of England include Leeds-based property developer Town Centre Securities, which has 75 per cent of its portfolio in Leeds and Manchester.
In the supply chain sector, Peel Hunt said that rental companies are operationally and financially geared to increased investment.
It said Harrogate-based equipment hire firm Vp would be one of the biggest beneficiaries.
In the industrial sector, Peel Hunt said a potential £78bn programme covers a wide range of projects led by the £39bn Crossrail of the North, which would include a central station for Bradford and an upgrade at Manchester Piccadilly.
Thirsk-based structural steel firm Severfield provided the steel for the rebuild of Manchester Victoria. There is also likely to be a trans-Pennine road tunnel between Sheffield and Manchester and Peel Hunt said stocks that are most likely to benefit from such a programme include Severfield.
Post-election, there will be much debate on how the Government will ensure that the North benefits from improved services and investment. Peel Hunt said that should be good news for the wider economy and therefore much of the retail sector too.
There are a number of retailers that are skewed more to the North that may benefit from rising consumer confidence in the region. Peel Hunt said the obvious firms on the food side are Greggs and Morrisons.