The Week In Review: Water company bubbles up

kevin whiteman, chief executive of Yorkshire Water's parent company Kelda, said that the group "buried the ghost of '95" this summer. No one raised the spectre of rationing or of drought conditions despite the soaring temperatures.

The company is a long way from the laughing stock it became when it ran out of water eight years ago.

These days, it looks among the most responsible of the privatised utilities and has put in one of the industry's more modest requests for price rises from the new five-year regulatory review, due next year. Kelda should get a lot of what it wants, in this case.

Similarly in the US, where results have been depressed by the weak dollar and the wet weather, which meant its metered customers had no need to sprinkle their lawns, the hope is that regulators will soon allow the first price rises in seven years.

Kelda's main attraction is the dividend, giving a prospective yield this year of 6 per cent. Buy.

British Airways

For those not frightened off BA shares by terrorist threats and competition from no-frills carriers, at least the airline's debts are coming down. The company has set ambitious targets on profit margins which should produce a big jump in earnings next year. The share rise of 40 per cent since we advised buying in a year ago has been predicated not just on efficiency improvements but on a revival of transatlantic travel. Hold.

Findel

Sales have soared at Findel's mail-order arm, selling everything from garden furniture to soft furnishings, DVD players to sofas. Education supplies, the group's other half, which sells everything from desks and chairs to maps and books, has felt the pinch with schools struggling to foot higher salary bills, but the outlook for 2004 is better. Buy.

Wolverhampton & Dudley Breweries

Wolves & Dudley brews Pedigree and Banks's beers and controls 1,600 pubs, so it did well out of the thirsty summer. Cost pressures remain, mainly from the minimum wage, but it has been able to improve profit margins and the company would still make an interesting target in a consolidating industry. The possibility of further share buybacks make the stock a hold.

Expro International

Expro International's technology and expertise helps oil and gas producers develop, improve and clean their wells. Sadly, the company has found itself too dependent on activity in the shallow Gulf of Mexico. With 52,000 wells, it is not worth building many more, so Expro's customers have deserted. Wait for signs of an upturn before returning to the shares.

Helphire

Helphire acts for insurers, supplying hire cars to drivers involved in accidents that are not their fault. After a strong run - the stock has quadrupled since its nadir during a legal dispute with the insurance industry in 2000 - Helphire's big shareholders seem tempted to cash in their profits and readers should follow suit.

Compass

The world's biggest catering group is benefiting from the growing trend to hand the works canteen to an outside expert. Its brands, from Upper Crust to Caffé Ritazza and Harry Ramsden's to Au Bon Pain, helped lure in £1.3bn of new contracts in the year. It also benefited from Messrs Bush and Blair's preoccupation with all things military: it is among the world's biggest army feeders. The shares look tasty.

Securicor

It has been a rough time for Securicor. Its airport security business failed to spot the 11 September hijackers and the US government has taken over that work, leaving Securicor with a tiny, inefficient US operation and a massive litigation headache. And the economic slowdown and intense competition has weakened demand for its manned guarding business. The shares are cheap to hold, but there are more exciting prospects elsewhere.

Merant

Merant operates in the competitive market of supplying businesses and organisations with computer systems to help them develop their own software processes. The ultimate aim is to deliver significant productivity and quality improvements for clients including the US Bureau of Customs and Border Protection. For those keen for exposure to the nascent technology recovery in the US, Merant looks a good bet.

Atkins

In October last year, the engineering and support services group confessed its IT system was not working, leaving the company's payments system in chaos. Confidence collapsed and debt rose. The company now has new management and has also extricated itself from a problematic contract to run Southwark education authority in London. It is too late to buy into this recovery story.

Richmond Foods

The ice-cream maker Richmond Foods got an extra scoop of profits thanks to the summer. It has marketing rights over Nestlé brands and also makes own-label products for supermarkets, including Asda Really Creamy. Full-year profits rose 28 per cent higher to £10.5m. Hold.

Trinity Mirror

Trinity Mirror has set out a plausible programme of change that involves making more use of central printing across the group's 200-plus regional titles; making sure there is less overlap between readership of the titles; and dumbing the Mirror titles down. If more than half of it shows results, shareholders should see a narrowing of the discount at which Trinity Mirror shares have traded when compared with media sector peers. Buy.