Here are the companies The Yorkshire Post business desk say are ripe for investors in 2021

Investing into Yorkshire sounds great but where should you direct your money? This year we present the quoted companies that The Yorkshire Post Business team feel stand the best chance of success in 2021.

Mark Casci - Business Editor (2020 pick - Team 17, 2021 pick - Drax)

In a year in which the world’s economy has taken such a sustained and damaging battering it can be challenging, indeed at times almost inconceivable to find any solace.

Hide Ad
Hide Ad

With Yorkshire forecast by many pundits to suffer the slowest recovery in the nation, it makes the task all the harder.

Renew Holdings was tipped by YP business correspondent Ismail Mulla.Renew Holdings was tipped by YP business correspondent Ismail Mulla.
Renew Holdings was tipped by YP business correspondent Ismail Mulla.

However, if you look beyond the headline figures and the doom and gloom you will find reasons for optimism, and in areas which are very much built for the future.

I am, of course, talking about the region’s tech sector.

At the start of 2020 I sought to emulate my success in 2019 with Sheffield’s magnificent Sumo Digital by once again selecting a quoted company in the region that operated in tech.

When I picked up Wakefield’s Team 17 I had no idea of how well the business would perform.

Drax has been selected by Mark Casci for 2020.Drax has been selected by Mark Casci for 2020.
Drax has been selected by Mark Casci for 2020.
Hide Ad
Hide Ad

The video game producer, led by one of Yorkshire’s most dynamic and impressive chief executives in Debbie Bestwick, had seen its shares more than double in value in 2019 when I was making my choice.

I remember distinctly thinking at the time, I would take a performance half as good as that for the forthcoming year. How wrong I was.

In its 30th year of trading Team 17 started the year with a share price of 383p. As of December 20, that same share price has risen to 784, again doubling its rate of return for investors.

Put this against the backdrop of a deep and painful recession brought about by coronavirus shutdowns, this is a remarkable performance and testimony to the confidence investors have in Team 17’s prospects and abilities.

Team 17 delivered the goods for YP business editor Mark CasciTeam 17 delivered the goods for YP business editor Mark Casci
Team 17 delivered the goods for YP business editor Mark Casci
Hide Ad
Hide Ad

In its latest set of financial results in September the group showed revenues jumped 28 per cent to £39m in the six months to June 30 and it reported a record pre-tax profit of £13.3m, also up 28 per cent.

It was boosted by three new releases launched in the first half. These included Moving Out, which launched in April across PS4, Xbox One, Switch and PC, and Golf With Your Friends, which launched in May across PS4, Xbox One and Switch.

And, of course ,the gaming industry at large was one of the few beneficiaries from lockdown, with people on furlough etc playing video games far more than usual.

Speaking at the time of the results being published, Ms Bestwick was astute enough to recognise that gaming is not recession proof and that emulating the performance seen during lockdown was a tall order.

Deputy Business Editor Greg Wright plumped for Edward Ziff's Town Centre Securities in 2020.Deputy Business Editor Greg Wright plumped for Edward Ziff's Town Centre Securities in 2020.
Deputy Business Editor Greg Wright plumped for Edward Ziff's Town Centre Securities in 2020.
Hide Ad
Hide Ad

However, going forward, I think we should all be very proud of this Yorkshire powerhouse which is quietly taking Yorkshire tech into the homes of millions worldwide.

And so, where does my advice go this year for Yorkshire’s listed firms?

The backdrop of Covid and the ongoing uncertainty over Brexit trade deals make this year doubly hard,

Tempted as I am to fall back on tech again I am going to be bold and select Drax.

Hide Ad
Hide Ad

The Selby-based power firm rebounded from the spring shutdowns and closed 2020 with a slightly higher price than it began with.

Factor in its increasing commitment to renewables and I feel it will have a good 2021. Our own Government is pressing ahead with its net-zero strategy and President Elect Joe Biden is set to make green energy a key platform of his administration.

This year Ismail Mulla has picked out Severfield, who have worked on Wimbledon among other projects.This year Ismail Mulla has picked out Severfield, who have worked on Wimbledon among other projects.
This year Ismail Mulla has picked out Severfield, who have worked on Wimbledon among other projects.

The world is going green and Drax is in that space.

Drax closed 2020 with a share price of 334p.

Greg Wright - Deputy Business Editor (2020 pick - Town Centre Securities, 2021 pick Synectics)

“Events, dear boy, events.”

These words often – and apparently erroneously – attributed to former Prime Minister Harold Macmillan must have been ringing in the ears of every company director last year.

Hide Ad
Hide Ad

However, this bland phrase simply cannot convey the agony and chaos of 2020, a year when the health of the FTSE 100 was one of the last things on the public’s mind.

The pandemic’s horrific death toll and the Government’s frantic attempts to prevent an economic catastrophe were the only issues that mattered to most people.

My share tip from 12 months ago reads like a message from a lost age of innocence.

In 2020 I placed my faith in property firm Town Centre Securities because I believed Boris Johnson’s victory in the General Election of 2019 would be very good news for its shareholders.

Hide Ad
Hide Ad

It was thought the influx of Tory MPs from the North and Midlands would have a big impact on the Government’s spending plans.

Town Centre Securities was one of the plcs expected to benefit, as Mr Johnson tried to retain his new friends in the North with a generous bestowal of investment.

Then Britain went into lockdown and economic prospects darkened overnight, although TCS has weathered the storm better than many.

In September, TCS said it was recovering after taking a £3.6m hit from the pandemic.

Hide Ad
Hide Ad

The Leeds-based firm, which owns the Merrion Centre, acknowledged its results for the year to June 30 were disappointing. Bosses also made the perfectly reasonable observation that Covid-19 has had an unprecedented impact on the property market.

No management team on earth could have cushioned this blow.

Speaking in September, Edward Ziff, the chairman and chief executive, said he had two potential occupiers for its refurbished 123 Albion Street property – and residential is going to become a bigger part of the group’s portfolio.

He added: “There is still a shortage of homes in this country, whether that be

Hide Ad
Hide Ad

city-centre residential, edge of city or suburban residential. I think that should be the most sustainable, predictable source of long-term income.”

Town Centre Securities closed 2019 at 220p. By the last week of December it was around 100p. But have no doubt, TCS will rise again and remains a sound,

long-term investment.

So given the hellish uncertainty we all face in 2021, which company am I plumping for this year?

Hide Ad
Hide Ad

As the vaccine is rolled out globally, crowds will return to cities. Casinos, a key market for Synectics, will reopen.

New orders will start to land on the desk of Paul Webb, the company’s CEO, providing shareholders with shafts of light after a bleak period.

Last month, Synectics reported growing interest from figures behind large government-related urban transport and critical infrastructure projects.

Progress on the large and strategically important contract with Deutsche Bahn for Berlin’s S-Bahn has continued to go well, Synectics said. The contract is scheduled for deployment this month.

Hide Ad
Hide Ad

The need for surveillance will grow in these watchful times, so Synectics is set to prosper in 2021.

Ros Snowdon - City Editor (2020 pick - Marshalls, 2021 pick - Cranswick)

My 2020 share tip was Elland-based paving specialist Marshalls because it has a healthy exposure to the building materials sector.

I reasoned that the firm should benefit from Government expenditure in the North and from wealthy pensioners upgrading their outdoor living space.

Hide Ad
Hide Ad

That is exactly what happened, boosted by homeowners investing in their property and gardens during the pandemic.

Marshalls recently said trading had improved and its order books were robust as more people improved their outdoor space.

Sales to the domestic market rose 10 per cent on a like-for-like basis in July, August, September and October.

Following the strength of recent trading, the firm is improving its expectations for 2021.

Hide Ad
Hide Ad

The survey of domestic installers at the end of October showed a healthy order book of 12.8 weeks, up from 10.9 weeks in October 2019.

So how high did the shares go during 2020? This is the disappointing part. Despite Marshalls’ strong performance, the market is leery of manufacturers during never- ending lockdown periods. When we went to press, Marshalls’ shares were down 15 per cent on the year.

My 2021 share tip is Hull-based upmarket food producer Cranswick.

Cranswick has a long history of investing heavily, even when times are tough.

Hide Ad
Hide Ad

Late in 2020 it announced a prestigious new contract with McDonald’s after two years of trying to seal the deal.

As a result it will create 100 to 140 jobs and invest £20m in a new cooked-bacon facility in Hull which will fulfil the new deal with McDonald’s. The group will employ 4,500 people in Hull once the new facility is built.

Cranswick reported “a strong performance in a challenging environment” in 2020 as it worked closely with its customers, the Government and regulatory bodies to ensure the continued supply of essential food products.

The group has continued to operate throughout the Covid-19 pandemic and said it was playing “a critical role to keep the nation fed during these unprecedented times”.

Hide Ad
Hide Ad

Meanwhile, Brexit preparations are well advanced across all areas of the business.

Its Brexit Taskforce, which includes a number of key internal stakeholders, supported by a national third-party technical specialist, has met regularly over the course of the last six months to review and address potential Brexit risks and issues.

Although it remains cautious about the longer-term economic impact of Covid-19 and the continued uncertainty surrounding the ongoing Brexit negotiations, it said it was well positioned to address these challenges.

Whatever 2021 throws at us, the nation will still need Cranswick’s much-loved posh sausages and bacon to get us through it.

Hide Ad
Hide Ad

Ismail Mulla - Business Reporter (2020 pick - Renew Holdings, 2021 pick - Severfield)

It’s been a funny old year, hasn’t it?

All the norms have been ripped out and replaced with a dystopian existence few of us would have predicted at the turn of the year.

However, if you’re clutching for some familiarity, you’ll certainly find it with my track record of tipping shares.

For 2020 I put my faith in engineering services group Renew Holdings.

Hide Ad
Hide Ad

In December, the Leeds-based firm reported that pre-tax profits jumped 19 per cent to £32m in the year to September 30, reflecting the core strengths and resilience of its business model.

The group’s order book rose 20 per cent to £692m as it delivered “uninterrupted, mission-critical services” to clients through both UK lockdown periods.

But like much of the stock market this year, its share price was subdued. It started at 568p on January 2 and ended up at 518p on December 21.

It hasn’t been disastrous in the context of everything that has gone on this year. It’s hardly left me castled but nicking off to the slips would still see the umpire raise the finger before having to trudge back to the pavilion.

Hide Ad
Hide Ad

Anyway, this year I’m going to add a bit of steel to my defences by tipping Thirsk-based Severfield.

The steel construction group stands to benefit from providing bridges for HS2 as well as highly complex structures for the rapidly growing data centre sector across the UK and Europe.

Over 80 projects were undertaken by the firm during the first half, including the Google HQ at London’s King’s Cross, data centres in Ireland and Finland, as well as the Fulham FC stadium.

Infrastructure projects will surely form a key part of Britain’s economic strategy as the country looks to find a way out of the current recession. Severfield should be well placed to take advantage of this.

Hide Ad
Hide Ad

Severfield also has a potentially huge joint venture in India.

The JV with JSW Steel incurred a £600,000 share of losses in the first half, due to the more severe impact of the pandemic in the subcontinent, which resulted in output falling from 50,000 tonnes to 18,000.

However, the group remains “very positive” about the long- term fundamentals of the market. The business also has a nice sideline in stadiums, having in the past worked on Anfield, the home of Premier League champions Liverpool FC. In 2020, it completed its work on the redevelopment of Lord’s, the home of cricket.

Lizzie Murphy - Business Reporter (2020 pick - Harworth Group, 2021 pick DeepVerge)

Hide Ad
Hide Ad

Tipping a company whose shares were at the highest they have been for the last five years was always going to be a risky move.

Yet at the end of 2019, when Harworth Group’s shares were 141p, the future was looking incredibly promising for the business, which had its sights set on becoming “the leading land and property regeneration specialist in the North of England and Midlands”.

The Rotherham-based business, which regenerates land and property for development and investment, owns, develops and manages a portfolio of 20,500 acres on around 120 sites.

Shares briefly headed in the right direction at the start of the year, reaching a high of 156p towards the end of January. Then the pandemic hit which led to a five per cent decline in its portfolio value.

Hide Ad
Hide Ad

In October, the group said it made an operating loss of £3.7m in the six months to June 30, down from a profit of £13.3m in the previous half year. Profitable sales and strong rent collection helped to mitigate the downward property valuation movement.

Shares fell to 86p at the start of November. However, while the business has not been immune to the effect of Covid-19, the business appears to be weathering the pandemic well.

It has had an active year, remaining at full operational strength throughout.

Among other projects, it completed the UK Atomic Energy Authority’s new nuclear fusion technology research facility at its flagship Advanced Manufacturing Park in Rotherham two weeks ahead of schedule. I believe it remains a good long-term bet.

Hide Ad
Hide Ad

This year, I’m taking a punt on DeepVerge, formerly known as Integumen. A small business with a £4m turnover, which is headquartered in York.

The core LabSkin business uses artificial intelligence (AI) technology for testing cosmetics and skincare products. However, the firm has tweaked the technology to test waste water for coronavirus, setting the company down an exciting new path.

In October, the company changed its name to DeepVerge to reflect an expanded focus beyond skin. The company has changed dramatically in the last two years since the arrival of chief executive Gerry Brandon, a business turnaround specialist.

He has a five-year plan to grow and sell the business. So, although it is currently making a loss, if plans come to fruition it could be one to watch in 2021.

DeepVerge closed 2020 at 23.9p.