March 1, 2007 12:31 pm

Charles Pretzlik: RBS shines, Aviva declines

The big beasts reporting today are led by Royal Bank of Scotland, where the salient news among a strong set of numbers seems to be the 25 per cent hike in the dividend in response to investor concern that Sir Fred Goodwin was hoarding cash to spend on expensive acquisitions.

Aviva, though, has turned in a disappointing set of figures, the last under chief executive Richard Harvey. And you have to laugh when the group says it will focus on organic growth, having so comprehensively botched its bid for the Pru last year. The shares fell nearly 3 per cent this morning.

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Reuters’ 8 per cent drop in full-year “trading profits” looks a bit lame as well, giving the strong financial markets it has enjoyed. There must, however, be more to the numbers as the shares are up more than 2 per cent (it is promising higher revenues and better margins).

Other significant results include those from Trinity Mirror (weak but with a positive outlook), BAT (numbers in line but returning lots of cash instead of making acquisitions), PartyGaming (bloodbath) and National Express (good figures, eyeing acquisitions).

Unilever is closing its final salary pension scheme to new members. The news flashed up just as I was publishing this blog but we have details on FT.com.

We’re still chuckling at Stuart Rose’s gaffe last night. Check out how similar his choice of words yesterday was to those used by “one source at M&S” cited in the Times piece earlier this month which first said Rose was mulling a Sainsbury’s bid.

From Bloomberg, yesterday: “ ‘It’s one thing talking about something over a glass of wine,’ Rose said today of a possible bid. ‘It’s another thing going down that road.’ ”

And from the Times, February 8: “ ‘Everyone has been looking at [Sainsbury]. I would be surprised if Carrefour aren’t looking at it,’ said one source at M&S last night, but cautioned that there was a difference between executives mulling the idea over a glass of wine and committing a team of people to work on a bid.”

An amusing coincidence. Anyway, it is no clearer today what yesterday’s episode tells us about whether M&S will bid for Sainsbury. Strictly speaking, Rose only ruled himself out of making a hostile bid now, which nobody thought he would do. He can still make an offer if it is recommended by the board. The chances of that remain very slim for reasons rehearsed here and elsewhere already but this may explain why Sainsbury shares are up more than 2 per cent.

Elsewhere among the retailers, Jessops shares are off another 20 per cent (that’s a 50 per cent drop since yesterday afternoon’s dreadful profit warning) and Blacks Leisure is closing stores all over the place.

And those out there who watch Isoft closely should take FT Alphaville’s advice and check out the Capital Chronicle blog which looks at the notion of Australia’s IBA Health buying the UK software group.

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