It was a stunning 12 months for the S&P/ASX 200 Index (ASX: XJO) in 2021. Over the period, the benchmark index climbed 13% higher.
Unfortunately, not all ASX 200 shares climbed with the market. Here’s why these were the worst performers over the period:
PolyNovo Ltd (ASX: PNV)
The PolyNovo share price was the worst performer on the ASX 200 in 2021 with a disappointing 60.5% decline. Investors were selling the medical device company’s shares after its sales fell well short of expectations in FY 2021. In addition, the surprise resignation of its Managing Director, Paul Brennan, weighed on sentiment. Mr Brennan’s interactions with senior staff and his management style led to increasing differences between him and the Board. PolyNovo also lost its Chief Operating Officer, Dr. Anthony Kaye, to CSL Limited (ASX: CSL) during the year.
Magellan Financial Group Ltd (ASX: MFG)
The Magellan share price wasn’t far behind with a decline of just over 60% during the 12 months. This fund manager’s shares came under pressure last year amid concerns over the underperformance of its flagship fund. This is expected to weigh on performance fees in the near term and could impact fund inflows. In addition, late in the year the company’s shares were sold off after it announced the termination of the St James’s Place mandate. Magellan advised that the mandate represents approximately 12% of its current annual revenues.
Appen Ltd (ASX: APX)
The Appen share price was out of form and dropped 55% over the 12 months. A good portion of this decline came after the release of its half year results in August. Appen reported a 2% decline in revenue to US$196.6 million and a 14.3% fall in EBITDA to US$27.7 million. In addition to this, concerns over structural changes in the artificial intelligence/machine learning data labelling industry have been weighing on sentiment. There are fears that major tech companies will bypass Appen by taking things in-house.
A2 Milk Company Ltd (ASX: A2M)
The A2 Milk share price was unsurprisingly among the worst performers on the ASX 200 in 2021 with a decline of 52.3%. Investors were selling down this struggling infant formula company’s shares after a disastrous performance in FY 2021. This was driven by a significant reduction in demand for its products in China and the daigou channel and poor inventory management. And while the company provided an investor update which outlined its recovery plans, it wasn’t enough to stop its shares from falling. A2 Milk guided to significantly lower margins compared to pre-COVID levels and a sales target of NZ$2 billion over the next ~5 years. The latter compares to FY 2020’s pre-COVID sales of NZ$1.73 billion.
AGL Energy Limited (ASX: AGL)
The AGL share price continued its multi-year decline in 2021 and dropped 48.6% over the period. Investors were selling off this energy company’s shares amid weak wholesale prices and its bleak outlook. Not even the release of its demerger plans has been able to give its shares a boost. Those plans will see the company split into two. AGL Energy is planning to become Accel Energy, an electricity generation business focused on the accelerating energy transition. It will then demerge a new entity, AGL Australia, which will be a multi-product energy-led retailing and flexible energy trading, storage and supply business.