I’m still looking for top UK shares to buy in 2021. Here are three British stocks I’d happily add to my Stocks and Shares ISA today.
#1: Bowled over!
Its bowling alleys are shuttered as the public health emergency drags on. But I’d still buy Hollywood Bowl (LSE: BOWL) for my shares portfolio today. Sure, broker hopes that annual earnings will rocket 400%+ this fiscal year might well fall flat. I think the long-term outlook for this UK share remains white hot, however.
The popularity of ten-pin bowling has been soaring in recent years. And people’s desire to get out and start slinging those heavy balls around appears to be undimmed, despite Covid-19. The company enjoyed “strong customer demand” when its alleys temporarily reopened in August and September, it has previously said. Hollywood Bowl remains committed to expansion to exploit this trend too.
That said, the post-pandemic leisure sector remains and unknown quantity so such shares come with plenty of uncertainty. And new site openings have been put on the backburner to protect the balance sheet during the pandemic. But the UK share still hopes to open two new centres each year from the end of fiscal 2022. Speaking of the balance sheet, Hollywood Bowl is financially robust following a recent equity raise. As of September had £31.8m of liquidity, which I think should put it in good shape to ride out the Covid-19 crisis.
#2: Drink it in
I’d also be happy to buy Britvic despite its peril-packed profits outlook in 2021. It faces the prospect of another big hit this year as Covid-19 lockdowns continue. It faces more significant revenues gaps caused by bar and restaurant closures, along with weak demand from the ‘on the move’ segment.
I’d buy Britvic for the same reason that I recently bought shares in Coca-Cola HBC. Soft drinks labels like Robinsons, Lipton and Pepsi Max have eternal pulling power with consumers all over the globe. And sales of these products will likely rocket again when the coronavirus crisis passes. I think Britvic’s strong record of product innovation bodes well for a profits bounceback from next year. Recent launches include its Robinsons Superfruit Cordials drinks which play on the healthy living theme.
#3: Another UK share in my ISA
Things might not be plain sailing for the housebuilders in 2021. The possibility of surging unemployment might smack demand for their new-builds in the months ahead. Sales might experience a big drop off when the stamp duty holiday expires at the end of March too.
This doesn’t mean that market conditions for the likes of Barratt Developments won’t remain largely robust, however. Low interest rates and ‘Help to Buy’ government equity loans should keep new home sales ticking over nicely, despite these problems. Don’t forget, too, that Britain has a colossal housing shortage. The housebuilders can’t keep up with demand as a result. And this is likely to remain the case for years to come.
This particular UK share decided to start paying dividends again this month following recent strong reporting. As a Barratt shareholder myself this gives me extra confidence in the short-to-medium term.