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LONDON (Alliance News) - London's equity markets have focused on individual stocks Thursday after a plethora of earnings reports and trading updates, with Rolls-Royce Holdings and Tate & Lyle among the biggest losers after they cut guidance, and Imperial Tobacco and pharmaceuticals company Shire leading the gainers after strong reports.

Lloyds Banking Group is another big faller after the bank, like Barclays earlier in the week, failed to make the headway on cost cutting that markets were expecting. Lloyds also failed to provide any longer-term outlook, saying it will update markets on its strategic plan for 2015-17 by the end of this year.

Despite this, Lloyds swung to a GBP415 million pretax profit for 2013 compared with the GBP606 million loss in 2012, and it reiterated that it will apply to restart dividend payments in the second half of 2014. Chief Executive António Horta-Osório said the size of payouts will depends on how much capital the bank needs to retain in order to fund future loan growth.

Engine maker Rolls-Royce Holdings is the biggest faller on the FTSE 100 after it warned that it won't achieve any growth in revenues of profits this year.

The company reported strong growth in underlying revenues and profits in 2013, although reported profit declined due to higher charges and financial items. However, it warned that growth is set to pause in 2014, due to the well-flagged defense spending cuts in countries like the US and UK, before resuming in 2015.

Tate & Lyle was the second-biggest decliner after it cut its profit expectations for its current financial year. It had previously forecast higher earnings for the year, but is now expecting flat profits because its expects prices for its SPLENDA sucralose to fall more than it previously expected in the final quarter. It also warned that SPLENDA prices will be down about 15% in its next financial year compared with the current year.

Imperial Tobacco, meanwhile, is the biggest gainer on the blue-chip index after it maintained its expectation for modest earnings per share growth at constant exchange rates in its current financial year, despite starting the year with a decline in reported tobacco net revenue in its first quarter. It is also expecting to raise its dividends by at least 10% this year.

Imperial also confirmed that it is reviewing its options in relation to a potential floatation of Compañia de Distribución Integral Logista SA, its European logistics business.

Pharmaceutical company Shire said that it expects its strong growth to continue in 2014 after reporting a 23% rise in earnings for 2013, driven by double-digit product sales growth.

Product sales were driven by strong growth in its attention deficit disorder treatment Vyvanse, which saw sales rise 19% to USD1.23 billion, as well as strong growth from ulcerative colitis treatment Lialda/Mezavent, Gaucher disease treatment Vpriv, ADHD drug Intuniv and hereditary angiodema treatment Firazyr.

In January, late stage trials for Vyvanse as a treatment for Major Depressive Disorder failed, although trials are still ongoing for its use as a treatment of binge eating disorders. Chief Executive Officer Flemming Ornskov said that the impact of dropping Vyvanse for MDD was minimal, but that data for the treatment of binge eating disorders was "very exciting."

There was also good news for British Airways parent International Consolidated Airlines Group, after its Spanish airline Iberia finally reached a deal in principle with its pilots that will enable it to make some of the cost cuts it so badly needs to achieve.

Under the deal, pilots will have their salaries cut and then frozen until 2015, and have agreed to big productivity increases. Future pay rises will then be linked to the airline's profitability.

Iberia now needs to get similar deals with its cabin crew and baggage handlers.

In the currency markets, the pound has hit a 33-month high against the US dollar after the greenback came under pressure in the wake of week US retail sales data. The pound had risen strongly Wednesday after the Bank of England raised its 2014 UK growth forecasts.

In political news, Chancellor George Osborne has warned that if Scotland walks away from Britain it will also be walking away from the pound, explicitly ruling out a currency union for the first time.

He accused the Scottish National Party of refusing to engage in technical arguments on currency and instead indulging in "wild assertion and empty threats". "They are like the angry party to a messy divorce," he said. "But the pound isn't an asset to be divided up between two countries after a break-up, as if it were a CD collection."

Russian President Vladimir Putin has endorsed Egyptian military leader Abdel-Fattah al-Sissi's campaign to run for president, saying he wishes al-Sissi success and that he hopes that Egypt and Russia would cooperate more closely after the elections.

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FTSE 100: down 0.9% at 6,617.80
FTSE 250: down 0.7% at 15,962.33
AIM ALL-SHARE: up 0.2% at 872.36
GBP-USD: 1.6647
EUR-USD: 1.3666
GOLD: USD1,292.50 an ounce
OIL (Brent): USD108.14 a barrel

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KEY UK CORPORATE NEWS:

FTSE 100: Rio Tinto said it swung to a pretax profit, increased underlying earnings 10% and will raise its dividend for the full-year 2013. AMEC said pretax profit was largely flat in 2013, as revenues declined but a more profitable mix of business lifted its margins. It expects higher underlying revenues in 2014, but the margin effect is likely to reverse. It also said it has now made a firm offer for Foster Wheeler at the same terms as the provisional offer. SABMiller's MillerCoors brand delivered higher pretax profit in 2013 as it cut costs. Revenues were up just 0.5% as it raised prices and sold more of its higher-margin brands. Royal Dutch Shell is up after Italy's Eni, one of its partners on the struggling Kashagan oilfield in Kazakhstan, said it expects to recover production to its original expected level from 2015.

FTSE 250: HomeServe has agreed to the final terms of a GBP30.6 million fine imposed by the Financial Conduct Authority for previously mis-selling policies. Morgan Advanced Materials says it's cautious about the first half of 2014 after earnings and revenues fell in 2013 as demand in its markets remained subdued and it was hit by currency moves. It's going to stay focused on costs cutting and reshaping its portfolio. Oxford Instruments expects its full-year results to be broadly in line with the previous year, as a strong February and March is expected to offset lagging year-to-date sales. Entertainment One, meanwhile, said its full-year results will beat management expectations as it saw revenues rise in the ten months to end-January. Lancashire Holdings reported lower profit for 2013, despite a rise in the fourth quarter, as gross written premiums were down for the year as a whole. Keller Group has won a USD41 million contract to repair and replace a large section of the seawall along Seattle's downtown waterfront. Salamander Energy said production has restarted at its Bualuang Oilfield, offshore Thailand, after it completed repairs to damaged risers. Private equity firm SVG Capital said its portfolio last year gave a total return of 29%, as holdings in Hugo Boss and German ProSiebenSat.1 Media added GBP214.9 million to its value. IP Group will increase the size of its capital raising by GBP25.0 million because of significant excess demand for its share issue, as it seeks to fund growth in the US and develop "novel" therapeutics through its spin-out companies.

AIM: Omega Diagnostics Group is a big gainer after the medical diagnostics company completed its CD4 technology transfer project having successfully cooncluded a three-batch validation of its manufacturing protocol. Sunrise Resources is up after it said it is moving ahead with drill testing at the Cue Diamond Project in Australia. Tern is another gainer after the investment company focused on cloud and mobile technology, reported that it swung to a modest pretax profit in 2013. Oilex is down after its shares were placed on a trading halt on the Australian Securities Exchange pending the release of a proposed capital raising announcement. The company said it expects the announcement to be made within the next few days and trading to resume on the ASX at such time. Oilex continues trading on the London market during the trading halt. All Leisure Group is another faller after said it expects to swing to big loss for its last financial year due to impairment charges for items including the relocation of its head office and a writedown on one of its cruise ships. The result for the year to October 31, 2013 will also be hit by forex moves. On a more positive note, it said its Egyptian tour business is now profitable, and the group as a whole had traded profitably since the end of that year. Chariot Oil & Gas is a faller after it said it expects to to spend USD33 million on further developing its portfolio in 2014.

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AFTERNOON WATCHLIST: US Initial Jobless Claims, US Retail Sales, Janet Yellen Speech, EIA Natural Gas Storage Change

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Friday's Key UK Corporate Events

Pennon Group Interim Management Statement
Anglo American Full Year Results
Severn Trent Interim Management Statement
Scottish American Investment Company Full Year Results
Riverstone Energy Limited Full Year Results

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Friday's Key Economic Events

01:30 China Consumer Price Index
01:30 China Producer Price Index
06:30 France Gross Domestic Product
07:00 Germany Gross Domestic Product
07:45 France Nonfarm Payrolls
09:00 Italy Gross Domestic Product
10:00 EU Trade Balance
13:30 US Import Price Index
13:30 US Export Price Index
14:15 US Industrial Production
14:55 US Reuters/Michigan Consumer Sentiment Index Preliminary

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By Steve McGrath; steve.mcgrath@alliancenews.com; @stevemcgrath1

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