Top 5 British stocks to watch in July 2021

Summary 

  • The final phase of lockdown restrictions is expected to get over in the UK as per the schedule on 19 July.
  • Once after easement, lots of businesses are like to see good improvement backed by pent-up demand.
  • 1% of UK adults have taken the first vaccine dose, and 64% have completed their two does course as of 5 July 2021.

Lockdown restrictions in the UK are set to ease on 19 July. People are very likely to return to normal life with the lifting of the last phase of lockdown, as per the recent statement of Prime Minister Boris Johnson. From 19 July, nightclubs and live performances are expected to resume with ease, albeit with social distancing. Once after easement, lots of businesses are like to see good improvement backed by pent-up demand and rising day-to-day requirements.

According to the latest vaccination data, at least 86.1% of UK adults have taken the first vaccine dose, and 64% have completed their two does course as of 5 July 2021.

Let’s look at some of the exciting stocks to watch out for in July month:

Smith & Nephew Plc (LON: SN.)

 

The company develops and manufactures medical devices and equipment. Its offering includes products for knee replacement, hip joints, severe fractures and wound care products. The company products are sold worldwide.

Because of lockdown and social distance norms, many people have delayed elective medical procedures like hip replacement. But with lockdown easing, hospitals will resume elective medical procedures, and Smith & Nephew will be a crucial beneficiary of the same as its medical devices are primarily used in these procedures.

The company’s revenue was down by 12% to £3311 million in 2020, with a pretax profit of £178.64 million. However, in the first quarter of 2021, revenue improved by 11.5% to $1,264 million as compared to $1,134 million in the same quarter of 2020.

Diageo Plc (LON: DGE)

Diageo plc is a multinational alcoholic beverage that markets and sells its products in over 180 countries. The company is headquartered in the United Kingdom.

The company could see a revival in sales and revenue once bars and restaurants are open at full capacity. The company has forecasted operating profit growth of at least 14% in fiscal 2021 and hence decided to restart its £4.5 billion return of capital (ROC) programme to its shareholders.

The company has temporarily suspended the ROC programme because of Covid-19 Impact but now has decided to resume the same and return up to £4.5 billion to its shareholders in the next three years either through share buybacks or special dividends depending on market conditions.

Carnival Plc (LON: CCL)

Carnival Plc operates cruise travel and hotel business worldwide. It is currently the world-leading cruise line travel company with a combined fleet of over 100 vessels. The majority of the cruise tickets are sold through travel agents and tour operators.

As travel restrictions are lifted for the UK traveller during the summer month with a fall in daily coronavirus cases in the country, it could pave the way for the Cruise Line to resume its services. The company has recently updated the recommencing of cruise service operations in Germany, the United States, and the Caribbean.

Because of operation shutdown, the company reported a drastic fall in revenue to £4069.22 million (FY19 revenue: £15148 million) and a net loss of £7445 million in 2020. For the six months ended 31 May 2021, the revenue remained dismal at $75 million as compared to $5,529 million in the same period 2020.

Mitchells and Butlers (LON: MAB)

 

The company owns and manages bars and restaurants in the UK and Germany. The company generates most of its revenue from the UK market, where it runs and manages over 1784 pubs, bars and restaurants.

The company is expected to benefit once the nightclubs are opened this month, and social distancing norms are reduced, allowing people to hit the bars and restaurants.

In its half-yearly result update, the company informed it has refinanced its debt at a low cost and raised £351 million in equity, strengthening the company balance sheet, and it is confident of performing well once all restrictions are removed.

In the half-year report of 2021, the total revenue reported was £219 million and a loss of £200 million, however, the company managed to strengthen its balance sheet by successfully raising £351million through equity raise.

Motorpoint Group Plc (LON: MOTR)

The company is the largest independent vehicle retailer in the UK, which sells pre-owned cars and new vehicles of various new automobile brands. The company operate through retails stores and online website.

The company anticipates a rise in car sales in the near term once all its branches are operational. Also, the UK cars registration trend is upwards, which indicates that people are spending their lockdown savings on high-end purchases.

The Group has drawn up various exciting plans to substantially increase its rate of growth. It is aiming to at least double FY20 revenue to over £2billion in the medium term, along with strong cash generation and better margin.

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