The markets were turbulent in 2020. Indexes and individual stocks slumped in March. Many have not recovered their losses to this day. However, some stocks performed strongly in 2020. In particular, five UK shares had an outstanding year, posting triple-digit gains and then some, in 2020.
The price of shares in ITM Power, a designer and manufacturer of products that generate hydrogen gas, rose by 607% in 2020. ITM Power no doubt benefited from the overall push for cleaner fuels, like hydrogen, in 2020. Governments worldwide have set new climate targets, and there is much talk of a “green recovery”, which means directing some of economic stimulus money towards renewable and alternative fuels.
| Company Name | Ticker | Sector | Market Cap |
2020 Start Price |
2020 End Price |
Gain in 2020 |
| ITM Power | ITM | Alternative Energy |
£3.65bn | 73p | 516p | 607% |
| AO World | AO | General Retailers |
£1.93bn | 97p | 411p | 325% |
| Berkeley Energia | BKY | Mining | £178.44m | 12p | 33p | 183% |
| CMC Markets | CMCX | Financial Services |
£1.20bn | 147p | 391p | 165% |
| Frontier Developments | FDEV | Leisure Goods |
£1.28bn | 1228p | 3080p | 151% |
Berkeley Energia is developing a uranium mine in Spain. The price of its shares moved 187% higher in 2020. The International Atomic Energy Agency thinks nuclear power generating capacity could double by 2050 if its best-case scenario plays out. However, Berkeley would need to get its mine approved to benefit from any increase in demand for uranium.
UK shares
Aside from promoting a greater urgency around decarbonising the world’s energy mix, the coronavirus pandemic forced people to spend more time at home. AO World is an online retailer of electrical appliances, and shareholders were treated to a 325% gain in 2020. A 53% increase in revenue for the six months to 30 September 2020, and a pre-tax profit of £18.3m compared to a loss in the same period the year before, lifted AO World’s share price.
People having more leisure time on their hands was also good for Frontier Developments, a maker and publisher of video games. Record revenues were expected as more people bought the company’s expanding line of titles in 2020. According to the latest trading update, revenue for the 2021 financial year (June 2020 to May 2021) is expected to be between £90m and $95m. That would be the best year on record. Frontier’s share price finished 2020 151% higher than it started.
Finally, there is CMC Markets, which offers an online trading platform. A combination of more free time and seeing market volatility as an opportunity to profit meant new customers flocked to CMC in 2020. In fact, client numbers increased by 42% year-on-year in the half-year that ended 30 September 2020. The influx of new and actively trading customers drove profit before tax 369% higher. As a result, CMC’s share price soared by 165% in 2020.
Post-Covid-19 world
For these five UK shares, 2020 was a good year. Undoubtedly the way Covid-19 changed the world helped their share prices. Whether 2021 and beyond will be kind to shareholders in these companies depends, in part, on what a post-Covid-19 world will look like. How much of what changed in 2020 will persist into 2021 and beyond, after the pandemic has ended, remains to be seen.
The online retailing and video game markets look set to remain buoyant. I am not so sure about the boom in online trading. Markets do not always soar or have the volatility they did in 2020. I can see a lot of accounts closing. Alternative energy will likely continue to see support. However, which sources will be prioritised for success is still not clear.
