Share Watch

Considering the wet weather it is ironic that four of the UK's leading water companies have chosen this week to update shareholders with annual results.

United Utilities released its figures yesterday, Northumbrian Water follow suit today and Pennon Group and Severn Trent will round off proceedings tomorrow.

South West Water owner Pennon provides water and sewerage services to customers in Devon, Cornwall and parts of Dorset and Somerset. However, it also owns waste disposal business Viridor which operates 25 regional landfill sites along with a number of regional recycling facilities and waste processing sites. On the basis that water is a must have' commodity, the earnings of the water companies are generally very predictable and Pennon should announce a steady set of results tomorrow.

Meanwhile, life at Severn Trent has been rather more turbulent of late.

The company has already been fined a record £35.8 million by industry regulator Ofwat, and management found themselves in the Old Bailey on Monday facing separate charges over false leakage data filed to Ofwat in 2001 and 2002. The company pleaded guilty to the charges in April and Monday's sentencing was adjourned until July 1 when the size of the unlimited fine' should become clear.

On top of this, last year's unprecedented summer weather caused the rivers Avon and Severn to burst their banks, forcing Severn Trent to evacuate its Mythe Water treatment works near Tewkesbury. During the crisis Severn Trent bought 50 million litres of bottled water that were handed out to its customers by more than 2,000 staff and contractors.

Management at Severn Trent must be hoping tomorrow's figures and July's sentencing will draw a line under what has proved to be an annus horribilis' for the company.

One sector that is rarely out of the news of late is the retailing market where conditions remain tough in the wake of the credit crisis.

Car parts to bicycle retailer Halfords is one of few retailers that has weathered the slowdown very well thanks to strong demand for in-car entertainment and satellite navigation systems. I am rapidly coming to the conclusion I am the only car driver out there that still uses my out of date road atlas to get me from A to B.

Tomorrow's annual results from Halfords are expected to show another year of earnings growth thanks to strong sales of in-car systems, with fitness and environmental trends also boosting cycle sales.

Finally, the MPC is holding its monthly meeting over Wednesday and Thursday but base rates are widely predicted to remain at five-per-cent for now.
David Evans