Thursday tips round-up: Renishaw, United Utilities

31st Jan 2013 07:15

Apple never confirms who its suppliers are, but one is plainly Renishaw, the Gloucestershire company that gets about 28 per cent of its revenues from the Far East ? mainly China, where iPhones and other smartphones and tablets are made using its precision-measuring tools. The company´s halfway figures yesterday made it clear that, although the first half was a record, the second half would show no further improvement. Furthermore, the first-half performance was swollen by a glut of orders from China, linked to production of those tablets and smartphones. Furthermore, orders in the second half will have to contend with a strong performance in the second half of last time, while costs will be up because of increased investment. Even so, "if you are prepared to take a long view and disregard further price gyrations, they look like good value," The Times´s Tempus column says. United Utilities' update was in the finest traditions of its sector, dull as ditch-water. There is little elasticity in revenues, the only moving part being the consumption by commercial concerns, which is metered. United's trading statement made clear that revenues were rising but at a rate slightly below that allowed by Ofwat, the industry regulator. This is because those commercial revenues are being hit by closing businesses and more frugal consumption by those that are still trading, as well as local councils. Meanwhile, United is facing higher power and other costs. Even so, the company will raise dividends by 2% above inflation until the next regulatory period kicks off. Furthermore, it does not seem to be in the regulator´s (Ofwat) own best interest to beggar the water providers. In any case, shares of United still yield about 4.6% for this year, the best return among the three, which is no surprise ? United is the purest water distributor. The others, Pennon Group and Severn Trent, have other unregulated businesses of varying sizes. Attractive for that safe yield alone then, Tempus concludes.Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.AB