Week Ahead: Water companies count the cost of leaky pipes

Investors' attention switches to the water utilities this week, with a number of groups in the sector releasing their full-year figures amid fears the severe weather experienced over the winter will result in fines being imposed for missed leakage targets.

Morgan Stanley notes all three of the companies reporting over the week have already warned about the cold December, which prompted an increase in the number of burst pipes, but the broker says that while they could be financially penalised, "we would expect Ofwat to act for persistent missed targets, not a one-off due to exceptional weather conditions."

Pennon kicks off the season with its preliminary results on Tuesday, and although Investec's Angelos Anastasiou predicts its profits-before-tax will come in at £181.4m – a slight fall from the previous 12 months – the analyst notes the company "has a tendency of surprising on the upside when results are actually announced."

Royal Bank of Scotland's Iain Turner, meanwhile, expects similar figures, but points out upcoming tariff rises of more than 8 per cent will drive growth over the current financial year "despite some cost pressures and further switching to water meters".

United Utilities announces its final figures two days later, the group's first under both its chief executive Steve Mogford and its chief financial officer Russ Houlden. It is also the first year of the five-year price control that has resulted in a base price cut of 4 per cent, and Mr Anastasiou therefore predicts its pre-tax profit to drop by a third to £322.6m.

Also expected to have seen a fall in profits thanks to the new price review is Severn Trent, although Mr Turner only predicts the company's numbers – out on Friday – will have declined by 10 per cent.



Today

The week starts with Mitie releasing its preliminary results, and the support services company is expected by Peel Hunt to confirm its guidance in January when it said it was on line to meet the market's expectations. At its update, the group said it was being knocked by the cold conditions over the winter, and the broker is eager to find out how this has affected its projects during the rest of the financial year.

Results and updates: British Land, Mitie and Stobart.



Tomorrow

Paragon updates the market with its interim results on Tuesday after a strong month that has seen the mortgage provider's share price rise nearly 12 per cent, and Collins Stewart's Robin Savage expects the positive sentiment around the group to continue. Forecasting its profits-before-tax to have risen by 16 per cent year-on-year, Mr Savage notes he is more bullish than the general consensus, which the analyst says does "not reflect the falling arrears, the substantial balance sheet bad debts provisions or the returns being generated from recent investments."

Also releasing numbers is Homeserve, and Charles Stanley warnsinvestors to carefully watch the repair group's margins. The broker's analyst Andy Smith highlights the fact they dropped at the company's interimresults, although he points out that management has "downplayed the threat from new entrants who they believe have no material impact on the market dynamics."

Results/Updates: Cable & Wireless Worldwide, De La Rue, Great Portland Estates, Homeserve, Marks & Spencer, Paragon, Pennon andVictrex.



b

Results/Updates: Aveva, Brewin Dolphin, BTG and Cable & Wireless Communications.



Thursday

Last month, Burberry revealed its underlying revenues had grown by 30 per cent over the second six months of the year, the latest piece of good news in what has been an impressive run for the upmarket retailer and the luxury sector in general.

The group reveals its final results on Thursday, and Numis Securities' Andrew Wade – taking into account April's update – is forecasting its pre-tax profit to just edge above £300m, while predicting further outperformance to come.

Results/Updates: Antofagasta, Burberry, Daily Mail and General Trust, London & Stamford Property, Man Group, QinetiQ and UnitedUtilities.



Friday

Britvic releases its first-half results on Friday, and Citigroup expects the owner of Tango and Robinsons to have seen strong growth in its gross sales over the second-quarter. However, the broker notes its margins will be under pressure from cost inflation and that recent cost saving initiatives will provide a bigger benefit in the next six months.

Results/Updates: Electrocomponents, Severn Trent and Tate & Lyle.

Economics Diary

Today

BBA mortgage approvals; US Chicago Fed national activity index.



Tomorrow

CBI sales data; EU industrial new orders; Public sector net borrowing; US new home sales.



Wednesday

Business investment data; GDPrevision; US crude oil inventories; US durable goods orders.



Thursday

US preliminary GDP; US unemployment claims.



Friday

GfK consumer confidence survey; US pending home sales; US personal spending.

Sport
The Pipes and Drums of The Scottish Regiments perform during the Opening Ceremony for the Glasgow 2014 Commonwealth Games at Celtic Park on July 23, 2014 in Glasgow, Scotland.
Commonwealth gamesThe actor encouraged the one billion viewers of the event to donate to the children's charity
Sport
Members of the Scotland deleagtion walk past during the opening ceremony of the 2014 Commonwealth Games at Celtic Park in Glasgow on July 23, 2014.
Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
PROMOTED VIDEO
Life and Style
fashion Designs are part of feminist art project by a British student
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
Arts and Entertainment
Top guns: Cole advised the makers of Second World War film Fury, starring Brad Pitt
filmLt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a uniform
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
A scene from Shakespeare in Love at the Noel Coward Theatre
theatreReview: Shakespeare in Love has moments of sheer stage poetry mixed with effervescent fun
News
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
books
News
i100
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Test Lead - London - Investment Banking

£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Farewell, my lovely

Should emergency hospital weddings be made easier?
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

Will The Minerva Project change the face of higher learning?

The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Commonwealth Games 2014: Great Scots! Planes and pipers welcome in Glasgow's Games

Commonwealth Games 2014

Great Scots! Planes and pipers welcome in Glasgow's Games
Jack Pitt-Brooke: Manchester City and Patrick Vieira make the right stand on racism

Jack Pitt-Brooke

Manchester City and Patrick Vieira make the right stand on racism
How Terry Newton tragedy made iron men seek help to tackle their psychological demons

How Newton tragedy made iron men seek help to tackle their psychological demons

Over a hundred rugby league players have contacted clinic to deal with mental challenges of game