RHM, the maker of Mr Kipling cakes and Hovis bread, reported last week that sales growth accelerated in the fiscal second half as the company added lower-fat cakes to tempt back customers switching to healthier foods. Sales in the six months ended 29 April climbed 3.7%, compared with a 2.1% gain for the financial year. Annual profit fell 93% on reduced demand for cakes and costs related to the company's initial public offering.

RHM has eliminated artificial colours and flavours from the Mr Kipling range, and taken fat and sugar out of its cakes and other goods as increased concern about obesity prompts many Britons to seek healthier snacks.

The company's cakes unit now gets 6% of its sales from the lower-fat products, including the Mr Kipling Delightful line. The shares added 21.5p, or 8.1%, to 286p in London on Friday.

WH Smith

WH Smith is separating its retail and news distribution at the end of August. The UK's largest stationery and magazine seller will be split into a retail division named WH Smith and a distribution unit called Smiths News, chief executive Kate Swann said last week. Current WH Smith investors will get one share of each new company for every share held. The retailer is separating the units after Swann stemmed a profit drop since taking over in November 2003. The company, which has 669 stores across the UK, has cut costs and sought to sell more of its most-profitable products such as greeting cards to revive earnings.

First-half net income rose 33% in its current fiscal year. Shares of WH Smith have gained 25% in the past year, while the 23member FTSE 350 General Retailers Index has added 13%.