London close: Footsie takes a bashing
London's blue chips ended a tough day heavily in the red, hit by a series of poor trading statements and disappointment that the Bank of England only cut interest rates by a quarter of a point.
The cut in interest rates to 5.25% is the second reduction in three months, but it was still deemed not enough.
A series of poor trading statements underlined how weak the economic backdrop remains. Yell, BT, Alliance & Leicester, Rolls-Royce and GlaxoSmithKline all suffered eye-watering share price declines.
Yell was the biggest loser after it said it is on track to meet year end earnings and cash forecasts but warned that revenue will be just short of expectations, reflecting tougher market conditions in the UK.
Telecoms giant BT reported third quarter revenue that was slightly below market expectations, but said it expects continued growth in the fourth quarter. Revenue in the last three months of 2007 was up at £5.15bn from £5.13bn a year earlier. New wave revenue, which is mainly generated from networked IT services and broadband, was 7% higher at just over £2bn, but new additions to the BT retail broadband service came in lower than many analysts had expected at just 177,000 in the final quarter of 2007.
GlaxoSmithKline fell on a warning earnings will again in 2008. Earnings dropped 1% last year, with falling sales of diabetes drug Avandia and increased generic competition in the US to impact on 2008, it said.
Aero engine giant Rolls-Royce took a pounding as plans for a 35% increase in the annual shareholder payment and a 13% hike in profits disappointed hard-to-please analysts. Aero engine giant Rolls said a review of its financial strategy revealed that the overall strength of the business and its future prospects could support such dividend growth.
Anglo-Dutch consumer goods giant Unilever was also lower after seeing underlying sales growth quicken in the fourth quarter and expects underlying sales growth in 2008 to be at the upper end of the 3% - 5% target range.
BG lead the few risers after the oil major reported a 23% rise in fourth quarter revenue and operating income to £2.34bn and 36% hike in clean net profit to £558m, ahead of analysts' forecasts.
In the mid-caps, car parts and bicycles retailer Halfords is down after the company's CEO got on his bike to join a big Australian retailer. The company said it is on track to deliver full year gross margins in line with expectations despite a slowdown in sales growth.
Engineer Invensys rose after hinting it will soon start paying dividends. The company paid off a large chunk of its debt as it achieved "a much improved operating cash conversion" in the last quarter of 2007.
Ladbrokes slipped back after paying £117.5m for Northern Ireland's largest betting shop chain.
Property group British Land has marked down the valuation of its portfolio by 8.9% for the third quarter, while the net asset value per share falls 16.7%. Today's reduction takes the decline in the property portfolio valuation to 10.3% from the peak reached last June.
No frills airline easyJet reported a 2.9% dive in its load factor in January but said forward bookings show an improving trend. Unlike its rival RyanAir earlier this week it has left its profit guidance for 2008 unchanged.
Shares in Plasmon fell after the optical storage system announced a £10m share placing and said it was deferring its cash break-even target to the second half of 2009. Plasmon said it will place 100m shares at 10p each to raise £10m and invest the money in the development of a direct customer-facing sales and service channel.
FTSE 100 - Risers
BG Group (BG.) 1,118.00p +3.81%
Smith & Nephew (SN.) 634.00p +1.44%
Carphone Warehouse Group (CPW) 309.25p +1.14%
Tullow Oil (TLW) 586.50p +0.95%
Antofagasta (ANTO) 680.00p +0.89%
Anglo American (AAL) 2,880.00p +0.52%
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FTSE 100 - Fallers
Yell Group (YELL) 279.75p -15.23%
Rolls-Royce Group (RR.) 431.00p -10.21%
Alliance & Leicester (AL.) 588.00p -9.95%
BT Group (BT.A) 237.00p -9.80%
GlaxoSmithKline (GSK) 1,078.00p -7.63%
Aviva (AV.) 563.00p -6.56%
FTSE 250 - Risers
Invensys (ISYS) 246.50p +10.41%
Aegis Group (AGS) 116.00p +5.94%
Rank Group (RNK) 95.75p +5.51%
Inmarsat (ISAT) 515.00p +4.46%
Bodycote International (BOY) 186.00p +4.20%
Northern Rock (NRK) 102.00p +4.08%
FTSE 250 - Fallers
Expro International Group (EXR) 881.00p -7.02%
Bellway (BWY) 723.50p -6.65%
Spirent Communications (SPT) 50.00p -6.54%
Stagecoach Group (SGC) 235.50p -6.45%
easyJet (EZJ) 419.50p -6.41%
Arriva (ARI) 690.50p -6.25%
