City File: Bid rumour

SOMETHING has got to give at Trafalgar House, which last week announced pre-tax losses of pounds 30.3m. Either business must pick up substantially - which does not look likely judging by what the company said on prospects - or there must be a rights issue, or the dividend has to go. Trafalgar told analysts that it was not contemplating a rights; it would find it virtually impossible to get away with one anyway. But with just pounds 40m of headway left between the level of group reserves and a breach of banking covenants, Trafalgar needs money from somewhere.