Give your share portfolio an Olympic win

Give your share portfolio an Olympic win
26 July 2012

A WINNING Olympic bid means major investment in infrastructure, including stadiums, accommodation and transport to prepare for the Games.

For example, as part of the 2012 Games, the London Olympic Delivery Authority has awarded $9.4 billion in contracts to business, and the government has invested an additional $10.2bn in transport and infrastructure projects, representing around 0.8% of UK gross domestic product.

Such investment benefits local businesses, particularly in the construction and engineering sectors, in the run-up to the Games.

But, with London 2012 under starters orders, other companies could be in line for a boost. cashy asks Dan Dowding (pictured, right), senior executive officer of Killik’s Dubai business, for his picks of stocks that investors could back for a win...

Media

WPP – whilst itself a geared play on global growth, will benefit from increased advertising spend over the Olympics. WPP has stated that the Olympics, Euro 2012 and the US presidential elections should contribute to between 1% and 2% growth in the advertising industry in 2012.

Technology

Security issues and the Safe City initiative has resulted in strong demand for Cobham’s video wireless links (mesh radio products, high resolution cameras and high definition downlink products), boosting earnings.

Food retailers

Food retailers are likely to see a boost in earnings from the Games, although the boost is likely to be relatively small. Sainsbury tends to benefit more than its competitors during special events, probably due to its slightly more upmarket bias (as we have recently seen over Christmas and the Jubilee).

Transportation

Go-Ahead Group, with 21% of the London bus market should benefit as a result of the increased number of tourists over the summer, although it is important to note that this could be offset by weakness in its rail division.

Serco, operator of the Docklands Light Railway, will also see increased passenger numbers and revenues.

Hotels

Intercontinental Hotels Group, which will be running the 15,000-strong athletes’ village as well as accommodating visitors in its London hotels, has already stated that it expects revenue per available room to be up to 2% higher at its London hotels this summer. London only accounts for about 3% of group’s revenues, so will have little impact on overall numbers.

Whitbread, via its Premier Inn brand should also see a small increase in numbers as a result.

Pubs

Greene King's 250 ‘community’ pubs in London have already benefited from the Jubilee and Euro 2012; the Olympics should further see an uptick in revenues, says Dowding.

Property

Ten property companies have said the Olympics will support their business because a greater focus on London and a pick-up in consumer spending will boost demand to occupy and buy properties.

Shaftesbury, which owns swathes of the West End, said the Olympics will “promote London and the West End to a global audience”, although it warned there will be “short-term disruption” during the Games.

The majority owner of Canary Wharf, Songbird, stated in its annual results that the Olympics will “place both the East End and Canary Wharf at the forefront of the world’s attention, which is likely to further enhance their respective profiles and emphasise the eastward shift of London’s centre of gravity”.

cashy says: Seeking out canny ways to boost your portfolio is great, but remember  diversification is key to investing!

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Freelance editor and journalist
mediahill Ltd
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