Fountains (FNT) core business is utility services and grounds maintenance, encompassing clearance services for the utilities, managing parks and open spaces, as well as tree surgery. It also carries out landscaping and forestry services in the UK and USA. Full year figures to September were encouraging, with pre-tax profits rising 8% to £1.025m, coming in higher at £1.155m before £130,000 of goodwill on the acquisition of South Wales-based Beaver Utility Services. Turnover was lifted 4% to £34.5m. Upbeat chairman Barry Gamble cheered followers by pointing to Fountains's strong cashflow, zero net borrowings and a raising of the total dividend by 12% to 2.48p. As well as cutting programmes, Fountains maintains over 50,000 kilometres of transmission and distribution lines. Key business wins during the year saw average contract lengths rise to over two years - these longer term arrangements are attractive because they slash bid costs and provide good secured earnings visibility. Gamble also says Fountains is 'mobilising to undertake vegetation management for the Southern Region of Network Rail under a contract worth up to £12m through to 2006'. House broker Collins Stewart predicts pre-goodwill profits of £1.35m for the current year, on a turnover of £38m. This should give earnings of 9p, and places the shares on a price earnings ratio of 12.5.