FTSE keeps its chin up, Royal Bank of Scotland fights negative sentiment and new boss has tough job at Pets at Home

“The FTSE 100 nudges up 0.2% to 7,437 on Friday, meaning it has made a small but welcome progress this week, rising a little less than 1% in total. Investors will no doubt be hoping for a stronger showing next week,” says AJ Bell Investment Director Russ Mould.

Royal Bank of Scotland

“Royal Bank of Scotland becomes the latest UK bank to see its shares fall on the publication of first quarter results. The numbers themselves are fairly impressive with profit trebling year-on-year to a level significantly above consensus estimates, helped by reduced running costs.

“However, this is overshadowed by the looming threat of a fine for mis-selling mortgages in the US ahead of the credit crunch. Estimates on the scale of the fine run from $1bn all the way up to $9bn and RBS has currently set aside £3bn to cover it.

“For RBS to be fully rehabilitated this situation needs to be resolved and the company also needs to move out of state hands and resume dividend payments, so despite an impressive quarterly performance there’s still plenty for management to do.”

Pets at Home

“It’s the first day in the top job for Peter Pritchard who has become the new chief executive of troubled retailer and services provider Pets at Home.

“Shares in the company fell on his appointment last November, perhaps in disappointment that the company didn’t hire an external candidate with fresh ideas. However, the news did coincide with half year results showing an 11% drop in underlying pre-tax profit.

“Mr Pritchard is an internal promotion and used to be CEO of Pets at Home’s retail business. His first challenge is to find a way to cope with growing competition from online players, general merchandisers and supermarkets.

“Shares in Pets at Home have fallen by 37% in value since the company joined the stock market four years ago. Why? Well, it has been losing sales to rivals, particularly in food.

“Cats, dogs and other pets may be classified as non-discretionary spend, given how we are a nation of animal lovers and will do anything to keep our furry friends happy, but consumers are likely to still shop around for bargains if they can save a few quid.

“Pets at Home rejigged its prices last year; Pritchard now needs to win back any lost custom and drive up sales volumes.”

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