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Panmure Gordon said it believes the worst of the margin pressure which prompted Cadbury to warn on guidance in October is now over and, as a result, it has increased its margin expansion forecasts for Cadbury and expects the group's cash flow to improve significantly.

In contrast, Kingfisher was off 9 at 230, after Credit Suisse slashed forecasts for the DIY retailer ahead of a fourth quarter trading update due on Feb 16.

In a note to clients, the broker downgraded its pretax profit forecast for 2006/07 by 12 pct to 410 mln stg and by 11 pct to 475 mln stg for 2007/08.

But Smiths Group was the top casualty, down 46-1/2 at 983 as investors cashed in on recent gains after the group reported a generally upbeat first half trading report.

The aerospace components and medical instruments group said said first half sales are expected to be ahead 20 pct year-on-year with pretax profit and EPS seen close to 14 pct higher.

In reaction, Merrill Lynch said the update confirmed expectations of strong performance in all divisions, although it thought aerospace profits would be held back in the first half because of high research and development spending.

Peer Rolls-Royce however, added 14-3/4 pence to 444-3/4 - the top riser - as traders ...

Panmure Gordon said it believes the worst of the margin pressure which prompted Cadbury to warn on guidance in October is now over and, as a result, it has increased its margin expansion forecasts for Cadbury and expects the group's cash flow to improve significantly.

But Persimmon was the top riser, 47 to the good at 1319 on a read across from mid cap peer Bellway which today said trading had picked-up in recent weeks and that it was a little more confident about the forthcoming Spring selling season, one of the most important for the building industry.

And second line housebuilders were also higher following Bellway's strong half-year trading update.

The homebuilder said its orderbook stood at a record 562 mln stg at the end of its first half after an improvement in sales rates since Christmas.

In reaction, Bridgewell Securities repeated its 'overweight' stance, saying the group had outperformed against its volume and margin forecast.

Bellway shares were up 23 at 1188, while elsewhere across the sector Redrow added 18 at 547-1/2, Taylor Woodrow gained 7-3/4 pence to 402-3/4, and Balfour Beatty moved 5-1/2 pence to 382.

Computacenter was another winner after both Deutsche Bank and Cazenove upgraded the UK IT equipment reseller to 'bu...

The company licenses the rights to SPD476 from Italian firm Giuliani SpA for markets in the United States, Canada, Europe excluding Italy, and the Pacific Rim.

American depositary shares of Shire fell 48 cents to $49.30 in morning trading on the Nasdaq.

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