Pedals and petrolheads

Halfords

391p +22p

DSG Int'l

163.5p -1.3p

IT'S not quite a case of "where there's muck, there's brass", but unglamorous stocks periodically show a swift turn of foot. One currently is Halfords, the car-accessories-to-cycles retailer. Its shares have risen not far off 40 per cent in the past year, lifted by fashionably ubiquitous concern with "carbon footprint" as far as its cycles business is concerned.

Halfords plays both sides of the environmental street, benefiting also from the car fraternity and its never-ending need for toddler-seats and in-car entertainment (the baby not qualifying in the latter category).

The stock, now trading at 391p, is nearly 50 per cent up the price at the time of the 2004 flotation.

A further 6 per cent was added to the shares yesterday, as Halfords free-wheeled into the City with an 8 per cent rise in full-year profits to more than 83 million.

Even better as far as the market was concerned, the high-geared performance has continued into the new financial year, with like-for-like sales up 9 per cent. That is well ahead of City expectations, and likely to lead to a raft of upgrading for a stock whose star is rising.

Halfords has received a following wind from a boom in drivers connecting their iPods to the car stereo. There has also been an upsurge in hands-free mobile phones in vehicles as people finally start obeying the law and driving with both hands on the wheel rather than with one clamped on a mobile explaining the traffic conditions to a friend. A strong store-opening programme should also underpin sales growth at Halfords.

The stock, despite its breathless ascent, remains a buy.

EasyJet

511p -10.5p

Broker says HOLD

LOW-FARES airline EasyJet was flying low yesterday despite the release of positive passenger statistics for May, while Goldman Sachs was moved to upgrade the shares to "neutral" from "sell". The broker said the airline's share price reflected weaker trading conditions and reckoned there was more upside potential as it seemed the situation was not getting any worse. The price target stayed at 563p.

Premier Foods

302p -7.5p

Broker says HOLD

BRANSTON Pickle and Quorn group Premier Foods fell yesterday after UBS chopped the shares to "neutral" from "buy" with 340p target. The broker is worried about the Campbell's/RHM integrations and various operating challenges. Last month, the group said sales for January to March were in line with expectations, though the performance in April was hurt by the unusually warm weather.

Intec Telecom

46.5p +3p

Broker says BUY

SHARES in the Surrey-based communications systems provider Intec Telecom Systems rose after ABN Amro improved its recommendation to "buy" from "hold" and increased its target price to 49p from 42p, on the back of "better than expected" interim results, which showed pre-tax profits of 4.5 million, up from 3.1m last year. The broker said that, after a period of share price underperformance, it believed improving financials now deserved a rerating.

Acquisitions and contracts: Mears as safe as houses

SMALL BUT BEAUTIFUL

SOCIAL housing group Mears has acquired, through its subsidiary Careforce, one of the UK's leading providers of domiciliary care services, Lancashire-based Britannia Care, for an estimated 1.1 million in cash.

Mike Rogers, chairman of Careforce, said: "The acquisition strengthens our position in Lancashire and extends our geographical coverage in to a new local authority area of Rochdale."

Mears said it expected its results to meet market expectations.

"Given the scale of our order book, current opportunity pipeline and our vision for community based services, we look forward with optimism," the group said.

Gloucester-based Mears added that it expected to complete a number of potential acquisitions over the coming months.

The group also announced that it had secured a deal with Welwyn and Hatfield district council to deliver its entire housing maintenance and improvement programme, worth a minimum of 168m over 15 years.

In March, Mears reported record full-year figures.

Profits before tax and amortisation for the year ended 31 December jumped by 28 per cent to 12.5m on turnover up 19 per cent to 241.1m.

BUSINESSES and homeowners will be relieved that the Bank of England has stayed its hand on raising interest rates.

Four rises since last August are just about beginning to bite now, and a further one would undoubtedly have hurt consumer sentiment.

Rate rises have been compounded by above-inflation rises in household costs, including higher utility and council tax bills, as well as the need to service personal debt.

You could argue, as some organisations have, that a rates hiatus both allows the previous rises to feed through into the economy and gives consumer confidence a sporting chance of recovery.

The Scottish Chambers of Commerce was just one of the groups taking this view yesterday as the Bank's monetary policy committee kept rates at 5.5 per cent.

The SCC also made the valid point that another rate rise in June could have been self-defeating.

The Bank has been pushing rises through because of its fears of resurgent inflation, but another rise now could have prompted increased wage demands that would fuel that inflation.

The Confederation of British Industry was saying yesterday that we should not assume another rise later in the year is certain given recent signs of slowing retail sales growth and softening housing market growth.

As a result, the CBI says, the recent ability of companies to raise prices is unlikely to continue.

Nice try. But the wider economic picture still suggests the balance of probabilities remains on the side of another rate rise, even if we were spared yesterday.

EVERY little helps... DSG International, the electronics retailer that last week announced the impending retirement of its chief executive, John Clare, has gone shopping at Tesco for a successor.

It looks like a minor coup in that DSG, whose brands include Currys and a new Dixons internet business, have attracted John Browett, currently operations director at the supermarket giant.

For one thing, anything related to Tesco these days carries immediate City cachet, given that company's successful retailing blitzkreig both in the UK and now increasingly overseas.

More relevant, Browett is formerly boss of Tesco.com, and is widely credited with expanding a nascent internet division at the group into one of the world's most successful dot-com food retailers.

This is important because a key part of Clare's legacy is of having driven DSG aggressively into internet retail through the acquisition of French Pixmania, and taking the Dixons brand off the British high street and relaunching it online.

Browett has the credentials to build on this work. His experience at Tesco should stand him in good stead.

Investors give the thumbs-down to SSE's 200m wind farm plan

SCOTS STOCKS

SCOTTISH & Southern Energy fell after it announced it had applied for consent to build a 250 megawatt wind farm at Pairc on Lewis in the Western Isles.

SSE, the UK's third-biggest electricity and gas producer, said construction of the wind farm, which would be the largest development for which it has ever sought consent, would require investment of about 200 million. The shares closed down 17p - or 1.2 per cent - at 1,449p.

FirstGroup travelled lower despite JP Morgan keeping the coach and train operator as "overweight" and upgrading its price target to 803p from 714p previously.

The broker noted that three rail bids were in play for FirstGroup, which might be worth 12p to 35p a share each.

It thinks the first news might come on the Cross-Country and East Midlands franchises.

But the shares closed down a penny at 651p.

A deeply discounted share placing upset traders in IDMoS, which plunged 31.5p, or 41.5 per cent, to 44.5p. The specialist in disease detection and monitoring technology is to raise 2m by issuing 5.71 million new shares at just 35p each.

IDMoS said the net proceeds of the fundraising would be used to support the launch of the company's CDD and CMSS dental products on the US and European markets later this year.

National Grid eyes A$1bn deal

RUMOUR OF THE DAY

UTILITY firm National Grid is expected to finalise a shortlist of bidders for its Basslink operation as early as this week with offers expected to exceed A$1 billion (430 million), sources close to the deal said.

National Grid has said it expected the sale of Basslink, the world's biggest underwater power cable linking mainland Australia with Tasmania, to be completed by September.

Sources said it was safe to expect offers above A$1bn following strong corporate and private equity interest.

A National Grid spokesman said tender documents had been issued to a large number of parties, and confidentiality agreements had been signed, with due diligence expected to commence soon.

Interested parties include Australian, Asian and European companies and consortiums, including private equity, banks and utility companies.