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. 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' Tempus column says (Last IC rating: Hold, 30 Jan).
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 per cent 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 per cent 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 (Last IC rating: Hold, 28 Nov).
Business press headlines:
The man responsible for setting boardroom pay at Barclays was hammered by MPs and peers yesterday and warned not to pay a one million-pound bonus to the new chief executive. Sir John Sunderland, one of Britain's most eminent industrialists and a former CBI president, was hit by a barrage of hostile questioning and accused of a significant misjudgment in approving a 2.7 million-pound bonus to Bob Diamond, the bank's former chief, last year. He was also told that the embattled bank's claim to have undergone a big shift in culture and standards since the Libor scandal last summer would be dismissed as PR spin if it pushed on with plans for a big bonus for the new chief, Antony Jenkins.
Sir John's grilling by the Parliamentary Commission on Banking Standards came hours after an explosive written statement from his predecessor as chairman of the Barclays remuneration committee, Alison Carnwath, who broke her silence to say that she had recommended Mr Diamond get no bonus at all last year, but received no support from any other board member. [The Times]
A judge in the Netherlands has ordered Shell to pay compensation to a Nigerian farmer whose livelihood was wrecked by oil spilling from a well abandoned by the Anglo-Dutch group. It is the first time that a court outside Nigeria has ordered Shell to pay out for its part in causing pollution in the Niger Delta and the ruling leaves it vulnerable to more claims from other victims. The Delta has been ravaged by oil spills for decades. Shell, the largest oil company in Nigeria, has blamed the pollution on thieves haphazardly siphoning oil from its pipelines, but its argument has failed to satisfy the farmers and Friends of the Earth, which took the fight for compensation to The Hague, where the oil company has its headquarters. [The Times]
The Government is expected to scrap the bidding competition for another major rail franchise, just months after it pulled the contract for the West Coast Main Line, costing the taxpayer more than £50m. Bidders for the Great Western line are braced for an announcement on Thursday by the Department for Transport (DfT) that FirstGroup, which currently runs the services connecting London to Bristol and Cardiff, has been awarded an extension to its contract. [The Telegraph]
Mothercare's UK boss is to leave the company as the parent and baby specialist retailer battles to turn around falling sales. The departure of Mike Logue comes as Mothercare Australia, a business in which the UK-listed company owns a minority stake, called in administrators. The collapse of the Australian business is a blow for Mothercare as its international division has been driving growth in the last few years amid disappointing trading at home. Underlying UK sales slumped 5.9 per cent in the 13 weeks to 12 January while international sales rose 12 per cent. Online sales edged up just 0.9 per cent during the period as the company failed to capitalise on shoppers switching to the internet. [The Guardian]
Facebook's aggressive mobile advertising push through the presidential election and holiday shopping season helped the social network report its first quarterly revenue growth since becoming a public company in May but still left investors wanting more. Revenues for the fourth quarter grew 40 per cent to $1.59bn compared with the same period last year. Revenue growth was flat for the previous two quarters and had declined the quarter before that. [Financial Times]
A former tax chief accused of overseeing sweetheart deals that let big companies off millions of pounds in tax has found a new role - protecting HSBC from dealing with tax cheats. David Hartnett, the former chief executive of HM Revenue & Customs, is to join a committee of the great and the good set up to advise the bank on how to avoid getting entangled with tax evaders, terrorists and drug dealers. It follows the $1.9bn (£1.2bn) fine the bank was forced to pay to United States watchdogs for breaching rules on money laundering that allowed the bank to be used as a conduit for a river of money from drug cartels. [The Independent]
The Bank of England's flagship scheme to increase the flow of credit to companies has come under renewed fire after figures yesterday showed lending continued to shrink last month. The Bank said net lending to businesses fell by £2.1 billion in December, following a £2.5bn contraction the previous month, prompting calls for the UK government to do more to prop up the ailing economy. [The Scotsman]
