RHM has attained leadership in three of its four markets - flour packaged cakes and grocery brands - and is second

RHM has attained leadership in three of its four markets - flour, packaged cakes and grocery brands - and is second in the bread business. The flour and bread business is in an appalling state with ridiculously low pricing thanks to supermarkets' cut-throat discounting wars and overcapacity in the market. However, Mr Wilkinson's lot have managed to increase annual sales of Hovis from pounds 80m to pounds 120m and successfully introduce new lines such as white bread and stay-fresh crusty loaves, which "are going brilliantly", according to one of the few Tomkins-friendly analysts. "Wilk- inson is a good strategic motivator and he has done a fine job of turning the company around," he adds.Revenue from its mature businesses has been put to work funding its new activities and RHM has already restructured itself internally to give it greater focus on innovation. It already has a foothold in the noodles market, which is hailed as the next big eating trend.RHM has maintained its investment in marketing. Some in the marketing community believe that it is not spending enough, given the crowded media marketplace.Speculation continues as to who may eventually end up running the business.

Tomkins' finance director, Ian Duncan, resigned from the main board last week with the intention of becoming chairman of the separated company, with Mr Wilkinson as his chief executive. There is as much talk about the pair leading a management buyout as there is about break-up bids from trade buyers.While the City is too churlish about Tomkins to laud the achievements of RHM, Mr Wilkinson's supporters believe the happiest outcome would be one where he gets to prove the worth of the portfolio he has so carefully managed and enhanced."Our most valuable assets are our brands, our people and our relationships," says Mr Wilkinson. This could be his chance to show just how valuable they are.FACTS FROM THE RANK AND FILEBrands: Hovis, Mother's Pride, Nimble, Bisto, Saxa, Atora, Paxo, Robertson's, Sharwoods.Bakes 16 million loaves a week.Has the number one, two and three brands in cake market with Mr Kipling, Cadbury's Chocolate Cakes and Lyons.Produces 60,000 Cadbury's Mini Rolls an hour.Has annual sales of pounds 151m to Marks and Spencer, covering celebration cakes, ready meals and desserts.Sells 750 million burger buns a year to McDonald's.Supplies pizza bases to more than 1,000 Pizza Hut branches in Europe.. SHARES of Carlton Communications, the TV company, were hit by news of the resignation of Stephen Grabiner, chief executive of Carlton's part-owned subsidiary ONdigital, the pay-TV service, after just over a year in the job. Mr Grabiner has been poached by Eventures, an internet investment venture formed by Japan's Softbank and Rupert Murdoch's News Corporation. ONdigital said that Stuart Prebble, managing director of channels and interactive media at Granada Media Group, will replace Mr Grabiner immediately. Shares in Carlton fell more than 5 per cent as analysts speculated that differences between Mr Grabiner and Carlton's chief executive Michael Green had forced him out of the job..

REUTERS shares rose as much as 3 per cent after the company said it will not be criminally charged with improperly obtaining data from rival financial information and news service Bloomberg The shares rose 9 per cent on the week. Reuters had said that in January 1998 that its US subsidiary, Reuters Analytics, was the subject of a grand jury investigation in New York; a statement that caused the stock to fall 11 per cent in two days. The end of the investigation is set to restore investor confidence in the company. The shares were also boosted on Wednesday by a strong initial public offering of Reuters' Tibco Software unit, whose products improve online communication between businesses and customers.. JAPANESE stocks are likely to rise further after hitting a 22- month high last week - driven by demand from both domestic and overseas buyers. Bonds are likely to fall as a better economic outlook could weaken demand for a sale of 10-year bonds. "Global portfolio managers still see Japanese stocks as having some room to rise because of the positive earnings outlook," said Hajime Yagi, fund manager at Meiji Dresdner.

The Nikkei 225 average, which gained for a seventh straight week, and closed at 18,248.30, may trade between 18,000 and 18,700 this week. However, the recent gains in the Nikkei have shaken investor confidence about buying new 10-year bonds at a $11.58bn (pounds 7.42bn) auction next Thursday. "Bonds won't be a core part of portfolios any more, given strong stocks," said Shingo Takenaka, a manger at Sanwa Bank.Investors are likely to focus on electronics makers, such as Sony, and telecommunications companies, such as Nippon, which investors see as having the most growth potential. Electronics stocks could also be encouraged by positive earnings reports from their US counterparts. Yet, the Nikkei's gains may be capped by selling by investors who are still concerned about the state of the economy. Some may take advantage of the rally to unload long-held shares and lock in recent gains.