Peter Ranscombe: Tough winter casts a shadow over springtime boost

Halfords will report back on a tough year on Thursday after a poor Christmas for sales of bicycles and satellite navigation systems more than offset a boost to demand for car maintenance products during a harsh winter.

Poor availability caused by teething problems at its new warehouse in Coventry and problems with suppliers in the Far East contributed to the pressure on sales, particularly for children's bikes over Christmas.

And demand for premium cycles under the UK government's cycle to work scheme, which provides tax-free bikes to workers on a salary sacrifice scheme, was also affected by recent rule changes introduced by HM Revenue & Customs.

Halfords has reported a recovery for bicycle sales since then, but added car maintenance sales went into reverse over the spring as a result of tough comparatives with a year earlier.

That led to the company warning that full-year pre-tax profits for the year to 1 April were likely to be between 124 million and 127m, down from a previous range of 127m to 135m. The year before the company reported pre-tax profits of 109.7m.

Consensus estimates for group revenues and pre-tax profits are set at 869m and 125m respectively. Home Retail Group, which also reports on Thursday, will be under pressure to show its first-quarter fortunes have improved since April's dismal full-year results.

The company posted a 13 per cent plunge in profits for the year to 26 February after falling sales at its two retail brands.

Official figures revealed the record-breaking warm weather in April gave retailers a boost, which could be reflected in Home Retail's first-quarter update. The Office for National Statistics and British Retail Consortium both said gardening sales, outdoor toys and barbecues sales benefited from the sunshine - all of which are sold by Argos and Homebase.

Rival B&Q enjoyed strong sales in its first quarter thanks to the sunny spring as customers bought new outdoor furniture and gardening equipment. Its parent company Kingfisher said seasonal sales were up by more than 15 per cent.

Supermarket operator Morrisons is likely to face shareholder ire on Thursday over plans to award shares to its finance director worth up to 230 per cent of his base salary.

The Association of British Insurers (ABI), which represents City investors, and corporate governance advisory firm Pirc have both flagged up the pay deal to shareholders ahead of the company's annual meeting in Bradford.

Britain's fourth-largest supermarket chain has offered finance director Richard Pennycook shares worth 1.25m, assuming certain criteria are met.The Morrisons remuneration committee offered the package as it considered it "essential to secure Richard Pennycook's services" as finance director.

The move came after its boss, Marc Bolland, left the firm to take up the top post at Marks & Spencer and was replaced by Dalton Philips.

Punch Taverns will update the market with its third-quarter sales on Wednesday, but the City will be particularly keen to hear how its radical plans for tackling a 3 billion debt mountain are progressing.

The group will sell more than 2,500 outlets over the next three to five years, as well as de-merge its estate of own-operated pubs - brands such as Chef & Brewer, Fayre & Square and Flaming Grill - by the end of the summer.

The de-merger should boost prospects for the faster-growing Spirit business, which is expected to have a portfolio of around 950 pubs.

Douglas Jack, analyst at brokerage Numis, said Friday's share price - 70.5p, giving the business a market value of 453.4m - is justified by the valuation of the Spirit managed pubs alone.

Across the whole business, Jack expects like-for-like trading to be strong across the third quarter, given favourable weather and beer price increases.