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Capital destroyers: the ten worst stocks of the year so far

Nick Paler
Written By:
Nick Paler

We reveal the ten UK-listed companies that would have lost you the most money.

Many UK-listed stocks have got off to a flying start in 2013, with indices approaching all-time highs, but some companies have been given a rough ride by markets, destroying shareholders’ capital in the process.

With the FTSE 100 up 16.4% year-to-date, and the FTSE All-Share up 17%, investors could be forgiven for thinking companies in the UK are in rude health.

A further 0.9% rise in the blue chip index this afternoon, meanwhile, has seen the FTSE 100 move to within 100 points of its all-time intraday high of 6,950.6.

However, a number of areas of the market – in particular resources stocks – have endured a brutal sell-off as commodity prices plunged and fears over the sustainability of growth in key regions such as China mounted.

As a result, some stocks have lost investors half their capital or more in the last four-and-a-half months.

Below, we list the ten worst performers of the year so far, in ascending order of losses sustained (percentage losses are for the period between 1st January and 20 May).

10. Ruspetro


The oil and gas exploration company, which only listed at the start of 2012, has not been welcomed by investors, shares almost halving in value.

Shares priced at the bottom of the range at its IPO, and despite interest from a number of fund groups, the company has since had a torrid time.

Early this year it warned production growth was slower than expected, before it panicked investors and caused shares to plummet by revealing it had failed to entice bond investors to back a $350m issue.

9. Hochschild Mining


A slow start to the year for the precious metals miner has exacerbated into something of a rout, with the company warning recently that falls in the price of silver and other metals had caused it to review its plans for the year.

The market has not taken the news well and – with declines in the price of silver having already sent the shares sharply lower – the stock is now down nearly 50% year to date.

8. Kazakhmys


The copper-mining giant has had one of its worst years on record thus far in 2013, having been relegated from the FTSE 100 at the recent quarterly review.

Weeks later it was hit by a huge writedown in its 28% stake in rival ENRC, halving the value from $4bn to $2bn.

7. Severfield-Rowen


Industrial engineer Severfield-Rowen has lost shareholders a staggering 57.4% so far in 2013, with a £48m rights issue diluting stakes substantially.

The steel-contractor, which built the Leadenhall Street “Cheesegrater” tower in London, sacked its chief executive in January after cost overruns on the project and was forced into the rights issue months later after making a substantial operating loss.

Shares are yet to show any signs of life, with the company still trading around its post-rights issue price of 40p.

6. New World Resources


The coke and coal producer is another commodity-dependent firm suffering from the widespread dumping of resources stocks seen so far this year.

The Czech-based firm saw shares tank further this month after it missed profit forecasts, leading to a number of days of heavy selling, and it has now shed almost two-thirds of its value since the start of the year.

5. Petropavlovsk


Gold miner Petropavlovsk – which is considered by analysts to have the highest break-even price of any gold miner listed in London – has been hit hard by the huge fall in the price of the precious metal this year.

One of the largest gold miners operating in Russia – and chaired by renowned mining figure Peter Hambro – Petropavlovsk has fallen from 403p at the start of the year to 128p.

The gold price fall has hammered the shares and caused the group to review its strategic plans, with investors reacting by selling the stock en masse.

4. CPP Group


The worst-performing non-resources stock in the market since the start of the year, the beleaguered credit card insurer is on the hook for more than £50m of compensation claims for mis-selling policies.

Efforts to sell parts of the business to generate some cash have failed to impress shareholders, and the group may yet face more bad news if founder Hamish Ogston gets his way and launches a 1p per share rescue bid.

3. African Barrick Gold


The African precious metals miner proclaimed “a good start to 2013” in its Q1 results, despite a share price tumble of 68%.

Its woes were made clear on 3 May, when Goldman Sachs said none of its three active mines would make a profit for the next three years. Shares hit an all-time low on the news, having already been hit hard by the gold-price fall.

2. Avocet Mining


Avocet’s share price fell from 51.5p to 25p in a single day in February, after BlackRock sold its entire stake in the miner.

Weeks later, the West African-focused gold miner announced a pre-tax loss of $117m, blaming higher costs and major problems with a Burkina Faso mine. Year to date, shares are down 81%.

1. Talvivaara Mining Company


Nickel producer Talvivaara has the dubious honour of being the worst-performing company across the entire FTSE All Share index in 2013.

Shares are down 85% after a huge rights issue finalised on 15 April.

Its largest shareholder, Finnish pension insurance firm Ilmarinen, dumped its stake in frustration, as CEO Pekka Pera’s holding decreased from 20% to 6.5%

The firm has been hit by a number of setbacks, including a toxic waste water leak at the firm’s plant in Finland.