Britannic pondering a merger

SHARES in Britannic rose 40p to 694p today after the troubled insurer said it might seek a merger partner.

'Britannic has always said it needs scale, and in the current equity market it will seek scale by strategic moves as well as by organic development,' said chairman Harold Cottam, who has been holding the fort since January when Danny O'Neil quit after only six weeks as chief executive.

Britannic reported pre-tax operating profit down more than £29m at £145m. This was after £101.6m of exceptional costs in launching the Britannic Money internet operation, which Cottam said will break even in 2003, but will not put on much volume this year.

He spoke of 'turbulent investment conditions' and an industry outlook made uncertain by market performance and regulatory reviews. The final dividend is held at 36.7p, making a total for the year of 55.2p.

Britannic cut 2,000 jobs last year when it withdrew its door-to-door sales force and set about becoming a niche financial services player.