Scottish FTSE companies’ long-term performance tops all shares, thanks to entrepreneurial spirit
News & comments15 January 2020
Shares in Scottish FTSE-listed companies outperformed the wider FTSE All Share index and AIM (Alternative Investment Market) index over a 10- and 15-year period, according to analysis from Brewin Dolphin.
The wealth manager found that AIM-listed Scottish organisations returned 242% total return1 over a 15-year period, compared to the AIM-listed All Share average of just 12%. At the same time, all Scottish companies listed on the FTSE returned 281% compared to the FTSE All Share average of 201%.
Scottish companies which returned some of the largest gains over 15 years include FTSE-listed packaging distributor Macfarlane Group (626%), engineering company Weir Group (554%) and Irn Bru maker AG Barr (477%).
Shares in AIM-listed technology companies Iomart and Craneware and property group Sigma Capital offered the highest 10-year total returns at 756%, 751% and 704% respectively.
John Moore, senior investment manager at Brewin Dolphin, said: “Over the longer term, Scottish companies that have performed well have consistently shown an entrepreneurial drive and ability to change which has reaped rewards in terms of wider business benefits.
“On the face of it, the likes of Weir Group, AG Barr and Macfarlane Group are not involved in typically high-growth areas, but savvy managerial decisions meant the businesses commanded a strong market share in their respective niches. Significant investment also ensured that, over time, the companies were in a strong position to successfully acquire smaller entities and command even greater market coverage.”
However, despite strong long-term performance, Scottish companies on the FTSE lagged the All Share index when comparing five-year total returns. The Scottish companies returned an average of 35% while the FTSE All Share stood at 46%. AIM-listed companies performed slightly better than the average, at 47% compared to the index’s 46% %, over the same five-year period.
A number of Scottish-listed FTSE companies have seen weak returns in the last five years, including sausage casings manufacturer Devro (-27%), public transport provider Stagecoach (-44%) and temporary power generator Aggreko (-35%). For many of the Scottish FTSE companies, the five-year returns show a stark contrast, compared to the 15-year outlook.
John Moore, senior investment manager at Brewin Dolphin, said: “Looking at the past five-years, it’s fair to say that the companies with poorer performance have been impacted by a range of factors, some not within their control and others because of internal issues unique to the business or sector. For investors, it reiterates the importance of having a diverse portfolio which can withstand challenges from all angles.
“Devro suffered from, for want of a better expression, a degree of indigestion regarding capital expenditure and investment made in the business over the past few years. A greater focus on cost savings and reducing debt, however, should place the business on a better footing going forward.
“Stagecoach, meanwhile, is a business that typified entrepreneurial ambition in the mid-2000s, before the recession. However, the company has faced significant challenges of late, with the sale of its North American operation, combined with being disqualified from bidding on a number of high-value, high-profile UK rail contracts. Shares in Stagecoach hit a 10-year low in June this year2.
“Glasgow-based power company Aggreko has suffered from a variety of external issues in the past five-year period, not limited to a downturn in US shale which had a significant impact on its petrochemical refining activity. Despite this, Aggreko appears to remain positive with upcoming projects including supplying power for the 2020 Tokyo Olympics – a key contract worth £159 million3.
“While the economic environment of late has been undoubtedly challenging, the current climate could provide an opportunity for Scottish companies to take advantage once more of their entrepreneurial instincts. By rolling up their sleeves, making sound, ambitious decisions at boardroom level, and focusing on cornering the market in their respective industries, we could see more positive returns over the next 10 or 15-year periods.”
– ENDS –
Disclaimers:
- The value of investments can fall and you may get back less than you invested
- The opinions expressed in this document are not necessarily the views held throughout Brewin Dolphin Ltd.
- Past performance is not a guide to future performance.
- We or a connected person may have positions in or options on the securities mentioned herein or may buy, sell or offer to make a purchase or sale of such securities from time to time. In addition we reserve the right to act as principal or agent with regard to the sale or purchase of any security mentioned in this document. For further information, please refer to our conflicts policy which is available on request or can be accessed via our website at www.brewin.co.uk.
- This information is for illustrative purposes only and is not intended as investment advice.
- No investment is suitable in all cases and if you have any doubts as to an investment’s suitability then you should contact us.
- Brewin Dolphin is authorised and regulated by the FCA
PRESS INFORMATION
For further information, please contact:
Peter McFarlane peter.mcfarlane@framecreates.co.uk / Tel. +44 (0) 141 559 5840
Richard Janes richard.janes@brewin.co.uk / Tel. +44 (0) 20 3201 3343
Anita Turland anita.turland@brewin.co.uk / Tel. +44 (0) 20 3201 3026
Payal Nair payal.nair@brewin.co.uk / Tel: +44 (0) 20 3201 3342
About Brewin Dolphin
Brewin Dolphin is a UK FTSE 250 provider of discretionary wealth management. With £44.1* billion in total funds, it offers award-winning personalised wealth management services that meet the varied needs of our clients including individuals, charities and corporates.
We give clients security and wellbeing by helping them to protect and grow their wealth, in order to enrich their lives by achieving their goals and aspirations. Our services range from bespoke, discretionary investment management to retirement planning and tax-efficient investing. Our focus on discretionary investment management has led to significant growth in client funds and we now manage £39.1* billion on a discretionary basis.
Our intermediary business manages over £13* billion of assets for over 1,700 advice firms either on a discretionary basis or via our Managed Portfolio Service.
In line with the premium we place on personal relationships, we’ve built a network of 31 offices across the UK, Jersey and Dublin, staffed by qualified investment managers and financial planners. We are committed to the most exacting standards of client service, with long-term thinking and absolute focus on our clients’ needs at the core.
*as at 30th June 2019
Scottish shares – five, 10 and 15-year total returns
| Company | Five-year total return | 10-year total return | 15-year total return |
| First Group | 14% | -55% | -36% |
| Macfarlane Group | 222% | 746% | 626% |
| Cairn Energy | 24% | -51% | 65% |
| Devro | -27% | 79% | 142% |
| Alliance Trust | 99% | 223% | 348% |
| SSE | 33% | 130% | 289% |
| Aggreko | -35% | 12% | 612% |
| Standard Life Aberdeen | 5% | 158% | n/a |
| Scottish Investment Trust | 56% | 131% | 268% |
| Weir Group | -2% | 132% | 554% |
| Scottish Mortgage Investment Trust | 152% | 516% | 1050% |
| J Smart & Co | 55% | 84% | 63% |
| STV | 39% | 920% | -69% |
| Stagecoach | -44% | 32% | 131% |
| RBS | -27% | -23% | -93% |
| John Menzies | 76% | 129% | 65% |
| John Wood Group | -14% | 44% | 290% |
| AG Barr | 3% | 119% | 477% |
| CYBG | n/a | n/a | n/a |
| AVERAGE FTSE SCOTTISH COMPANIES | 35% | 185% | 281% |
| IDE Group | -77% | n/a | n/a |
| Indigovision | -48% | -59% | 182% |
| Murgitroyd | 60% | 218% | 542% |
| Eland Oil & Gas | 145% | n/a | n/a |
| Caledonian Trust | 30% | 95% | 34% |
| Springfield Properties | n/a | n/a | n/a |
| Nucleus Financial | n/a | n/a | n/a |
| Iomart | 150% | 756% | 327% |
| Scotgold | 60% | n/a | n/a |
| Craneware | 430% | 751% | n/a |
| Celtic | 114% | 249% | 244% |
| Omega Diagnostics | -17% | -50% | -95% |
| Braveheart Investment | -30% | -63% | n/a |
| Beeks Financial Cloud | n/a | n/a | n/a |
| Sigma Capital | 111% | 704% | 677% |
| Spaceandpeople | -70% | -70% | -65% |
| Ediston Property Investment Company | 17% | n/a | n/a |
| Frontier Group IP | 165% | -26% | n/a |
| Smart Metering Systems | 51% | n/a | n/a |
| Lansdowne Oil & Gas | -91% | -90% | n/a |
| Minoan | -83% | -88% | n/a |
| Parkmead | -64% | 238% | -48% |
| Plexus | 95% | 166% | 621% |
| Quiz | n/a | n/a | n/a |
| AVERAGE AIM SCOTTISH COMPANIES | 47% | 182% | 242% |
| FTSE 100 | 43% | 102% | 180% |
| FTSE 250 | 55% | 196% | 367% |
| FTSE 350 | 45% | 113% | 200% |
| FTSE All Share | 46% | 115% | 201% |
| AIM All Share | 46% | 57% | 12% |
Scottish shares over five years
| Company | 2015 | 2016 | 2017 | 2018 | 2019 |
| First Group | 1% | -3% | 6% | -24% | 50% |
| Macfarlane Group | 61% | 11% | 31% | -6% | 54% |
| Cairn Energy | -12% | 50% | -9% | -30% | 37% |
| Devro | -2% | -32% | 26% | -27% | 17% |
| Alliance Trust | 11% | 26% | 19% | -6% | 24% |
| SSE | 0% | 8% | -10% | -12% | 45% |
| Aggreko | -38% | 3% | -10% | -5% | 17% |
| Standard Life Aberdeen | -1% | 1% | 24% | -37% | 39% |
| Scottish Investment Trust | 1% | 31% | 17% | -10% | 14% |
| Weir Group | -45% | 95% | 15% | -37% | 20% |
| Scottish Mortgage Investment Trust | 13% | 17% | 41% | 5% | 25% |
| J Smart & Co | 16% | 5% | 7% | 3% | 15% |
| STV | 44% | -28% | -5% | 15% | 24% |
| Stagecoach | -18% | -23% | -19% | -16% | 27% |
| RBS | -23% | -26% | 24% | -21% | 25% |
| John Menzies | 20% | 68% | 17% | -22% | -3% |
| John Wood Group | 6% | 48% | -23% | -19% | -16% |
| AG Barr | -8% | -3% | 35% | 22% | -25% |
| CYBG | n/a | n/a | 22% | -46% | 6% |
| Average FTSE Scottish Companies | 1% | 14% | 11% | -14% | 21% |
| IDE Group | 76% | -2% | -9% | -93% | 114% |
| Indigovision | -46% | -13% | -30% | 1% | 52% |
| Murgitroyd | 23% | -5% | -5% | -2% | 51% |
| Eland Oil & Gas | -59% | 38% | 73% | 53% | 57% |
| Caledonian Trust | 0% | -29% | 65% | 25% | -4% |
| Springfield Properties | n/a | n/a | n/a | -1% | 41% |
| Nucleus Financial | n/a | n/a | n/a | n/a | 30% |
| Iomart | 62% | 13% | 33% | -15% | 15% |
| Scotgold | 29% | -26% | -49% | 59% | 76% |
| Craneware | 71% | 69% | 12% | 69% | 6% |
| Celtic | -3% | -3% | 83% | 27% | -2% |
| Omega Diagnostics | -14% | 12% | -5% | -24% | 11% |
| Braveheart Investment | -50% | 37% | 78% | -27% | -21% |
| Beeks Financial Cloud | n/a | n/a | n/a | 152% | 6% |
| Sigma Capital | 67% | -13% | 7% | 49% | -12% |
| Spaceandpeople | 41% | -63% | 36% | -40% | -29% |
| Ediston Property Investment Company | 10% | 5% | 9% | 2% | -11% |
| Frontier Group IP | -17% | 86% | 114% | -6% | -15% |
| Smart Metering Systems | -16% | 65% | 63% | -40% | 9% |
| Lansdowne Oil & Gas | -77% | -46% | 35% | -15% | -46% |
| Minoan | -29% | -20% | -4% | -54% | -28% |
| Parkmead | -66% | 31% | -35% | 38% | -5% |
| Plexus | -15% | 55% | 12% | -16% | 51% |
| Quiz | n/a | n/a | n/a | -79% | -47% |
| Average AIM Scottish Companies | -1% | 9% | 24% | 3% | 13% |
| FTSE 100 | -1% | 19% | 12% | -9% | 17% |
| FTSE 250 | 11% | 7% | 18% | -13% | 29% |
| FTSE 350 | 1% | 17% | 13% | -9% | 19% |
| FTSE All Share | 1% | 17% | 13% | -9% | 19% |
| AIM All Share | 7% | 16% | 26% | -17% | 13% |
Source: London Stock Exchange
1Share price movement plus dividend returns
2https://markets.ft.com/data/equities/tearsheet/charts?s=SGC:LSE
3https://tokyo2020.org/en/news/sponsor/20181214-01.html