Thursday tips round-up: United Utilities, Britvic, WS Atkins

On its financial performance, United Utilities' first half was largely in line with expectations. Recession has pushed down demand for water, particularly from industry, taking an estimated 4 per cent out of the group's revenues.

It will be given two months to appeal against Ofwat's price review ruling, after that is published this morning, which could change things all over again. And all but the most daring investor would do well to wait until early next year's conclusions on the group's dividend sustainability. In the meantime, hold says the Independent.

The only real blemish for soft drinks group Britvic's results was dire trading in Ireland, where profits fell by 17% to £12.2m, and worries about Britvic saying that visibility on both sides of the Irish Sea remains "limited". Britvic's stock still appears cheap, trading on a 2010 price-to-earnings ratio of just 10.5. For these reasons, expect to see some fizz over the coming year. So buy says the Independent.

The new year has started well, according to Paul Moody, Britvic's chief executive, which is a good sign. There is also the potential for acquisitions. Since April the shares are up 43% but remain a buy, the Telegraph adds.

At 370p, or less than 11 times earnings, and yielding 4.1%, the shares trade at a 20% discount to their European beverages peers. But until Britvic's acquisition plans become clearer, that gap is unlikely to close. Hold says the Times.

The recession has hit everyone, but French Connection sits in a particularly crowded sector of the market and has a brand in need of some vim now that people have realised its FCUK logo is really not that funny. With business trends not showing any real improvement and brokers forecasting a full-year loss of £14m, avoid says the Independent.

Shares in Qinetiq, the maker of bomb disposal robots and add-on armour for military vehicles dropped 8% as it warned of a slowdown in military procurement spending. QinetiQ says that its military products division is being squeezed by delays to the appointment of key personnel in the Pentagon and continued uncertainty over US expenditure on the Afghanistan war. At 163Ÿp, or 12 times earnings, it is not too late to sell suggests the Times.


Civil engineer WS Atkins' confidence that it could keep next year's profits broadly flat, against the double-digit percentage fall that the City had been expecting, pushed its share price up by nearly 8%. At 600œp, or nine times next year's earnings, and yielding 4.6%, buy on weakness suggests the Times.


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