UK’s Olympics medals hunt: 5 sports related stocks that are super-charged

Summary 

  • Tokyo 2020 Olympic games will be instrumental in deciding the market performance of some of the sports players on the back of improved economic conditions and resurged consumer demand.
  • Major sporting events were hit by the COVID-19 pandemic, as organisations decided to postpone or delay upcoming events.
  • With the rise in vaccination rate and fall in the number of new infections globally, the international sporting circuit is buzzing with action once again.

No sector of the global economy has escaped the disruption caused by the coronavirus outbreak. The pandemic has wreaked havoc on the global sporting calendar. Major sporting events, including rugby, football, boxing, cricket, athletics, cycling, horse racing, darts, basketball, hockey, baseball and motorsports, etc., have all been hit by the COVID-19 pandemic, as sporting organisations decided to postpone or delay upcoming events, with some choosing to continue with social distancing and other precautions in place. The biggest sporting event – the Olympic games in Tokyo also had to be postponed for a year due to the prolonged impact of the pandemic.

 

With the rise in vaccination rates and a fall in the number of new infections, the international sporting circuit is buzzing with action once again. The ongoing Tokyo 2020 Olympic games is expected to be instrumental in deciding the market performance of some of the sports companies on the back of improved economic conditions and resurged consumer demand. Here are 5 sports stocks making news in the Olympics season. These stocks have been selected on the basis of their market capitalisation and the ongoing Olympics’ impact on their performance.

Flutter Entertainment Plc (LON: FLTR)

Flutter Entertainment is an FTSE 100 listed company engaged in providing sports betting, gaming and entertainment services to more than 14 million customers globally.

On 12 July 2021, Flutter entered into an agreement to sell its sports betting and gaming affiliate business Oddschecker Global Media to Bruin Capital in a transaction valued at £155 million. Earlier in May 2020, acquired and merged business of The Stars Group. The pandemic highlighted the resilience of the company’s business model, with customer activity significantly migrating from sports to gaming due to cancelling of several major sporting events.

For the quarter ended 31 March 2021, Flutter’s revenues grew to £1,485 million, up by 43% from £1,126 million for the same period in the previous year, driven by online revenue growth of 42% and an increase in the number of online players by 36%.

Flutter Entertainment’s stock has a market capitalisation of £22,074.14 million and has given a return of 9.81% to its shareholders in the last one year, as of 27 July 2021.

JD Sports Fashion Plc (LON: JD.)

JD Sports Fashion is a multichannel retailer of branded sports, fashion and outdoor products. It operates through a network of 853 stores across 19 locations globally. It is FTSE 100 listed company.

On 22 July 2021, JD Sports Fashion announced multi-million-pound investment in Gym King, a lifestyle performance brand. In June 2021, JD Sports’Spain based holding company took over 80 per cent stake in Deporvillage for EUR140.4 million.

For a period ended on 30 January 2021, JD Sports Fashion’s revenues rose to £6,167.3 million from £6,110.8 million in 2020. However, its profit before tax decreased by 7 per cent to £324.0 million from £348.5 million in 2020.

JD Sports Fashion’s stock has a market capitalisation of £9,598.26 million and has given a return of 55.38 per cent to its shareholders in the last one year, as of 27 July 2021.

Superdry Plc (LON: SDRY)

Superdry is a UK-based branded clothing company and is listed on the FTSE All-Share Index. The company operates through a network of 241 stores and 44 websites in 61 countries.

For the 52-week period from 26 April 2020 to 24 April 2021, Superdry’s revenues were impacted by the disruption caused by the COVID-19 pandemic throughout the year, down by 21 per cent year-on-year to £556.6 million. However, the business registered an 0.8 per cent year-on-year increase in Q4 21, driven by growing ecommerce sales and wholesale. The company’s strong digital sales helped offset losses caused by store closures.

The company announced a positive outlook for FY22 growth in terms of revenue and profitability as compared to FY21 on the back of lifting of lockdown restrictions as well as continuing recovery in footfall and consumer demand. Growth in profits will be underpinned by higher gross margins from restored operations and brand marketing investments.

Superdry’s stock has a market capitalisation of £324.89 million and has given a return of 230.00 per cent to its shareholders in the last one year, as of 27 July 2021.

Celtic Plc (LON: CCP)

Celtic is a professional football club and offers on-field related team activities. The company derives revenues from season tickets, gate receipts, team sponsorships, publishing, advertising, merchandise sales and donations. It was listed in the London Stock Exchange (LSE) in 1994.

For the six months to 31 December 2020, the revenue of Celtic decreased by 23.7% to £40.7 million from the previous year’s £53.3 million and loss before taxation stood at £5.9 million (2019: profit of £24.4 million).

Key factors that had an impact on the company’s financial performance for the period were lower profits from player trading as the company made efforts to maintain the squad for the season and the prolonged destructive impact of the COVID-19 pandemic. However, as the lockdowns are lifted and with the resumption of major sporting events, it is expected the company’s financial performance for the coming year will improve.

Celtic’s stock has a market capitalisation of £104.81 million as of 27 July 2021.

The Gym Group Plc (LON: GYM)

The Gym Group Plc is a 24/7 no-contract fitness club chain based in the United Kingdom. The company operates 187 low-cost gyms across the country. In 2015, The Gym Group was listed on the LSE.

The Gym Group is in discussions with leading banks to increase financial flexibility in order to speed new site launches. It is in the process of building the pipeline for the rest of 2021 and 2022 by entering into new lease agreements aimed at acquiring sites for expansion at affordable rents.

The Gym Group re-opened its gyms in England on 12 April, in Scotland on 26 April and Wales on 3 May. Since its re-opening, the company outperformed expectations, thus demonstrating strong return to gyms and an increase in the number of memberships from 547,000 in February 2021 to 729,000 by May 2021, as compared to 794,000 in December 2019. Since 12 April 2021, the company has inaugurated four new gyms in York, Chichester, London Sydenham and Cambridge.

The Gym Group’s stock has a market capitalisation of £499.83 million and has given a return of 95.77 per cent to its shareholders in the last one year, as of 27 July 2021.

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