Britain's FTSE steady as investors digest mixed earnings messages

Reuters - UK Focus

* FTSE 100 nudges up by 2.52 points

* Capita (LSE: CPI.L - news) , BAT among companies to report good results

* WPP (Other OTC: WPPGF - news) hit on margin concerns

* RBS (LSE: RBS.L - news) and RSA fall as new CEOs undertake overhauls

By Alistair Smout

LONDON, Feb 27 (Reuters) - Britain's top share index heldsteady on Monday, struggling for direction near all-time highsas investors digested mixed corporate updates with earningsseason in full swing.

The FTSE 100 edged up by 2.52 points to 6,801.67points at 0846, just 2.2 percent off 1999's all time high, ledby a 5 percent surge in Capita.

The British outsourcing group posted a 14 percent rise inannual profits on Thursday and said it was confident on 2014after winning 588 million pounds ($978.3 million) worth of newcontracts so far this year.

Heavily weighted British American Tobacco (LSE: BATS.L - news) contributed 2.6 points to the index's advance, after gaining 1percent after the world's No. 2 cigarette maker said 2013 coreearnings rose 6 percent, helped by growth in market share.

Other beneficiaries from better earnings reports were Reed Elsevier (Frankfurt: RDEB.F - news) , up 1.8 percent after it said it was confident for2014 following a rise in earnings, and Whitbread (LSE: WTB.L - news) , up 2.1percent as it expects profit to come in at the top of forecasts.

In the earnings season thus far, 69 percent of FTSE 100companies that have reported results have come in ahead or inline with expectations, Thomson Reuters StarMine data shows.

"As a whole, we haven't had too many bad shocks with regardsto results," Toby Morris, senior sales trader at CMC Markets,said. "However, it's a little bit concerning how many firms arecoming out and being a little bit tentative about 2014 ... itputs a bit of a dampener on things."

One such firm was the world's largest advertiser WPP (Frankfurt: 0WP.F - news)down 6.3 percent despite reporting strong trading, with Liberumand Numis both raising concern over a hit to margins and lowermargin guidance moving forward.

"Full-year results were below our expectations due to amargin miss ... However, the main reason for the downgrade isthat WPP has taken down its longer-term margin improvementtargets," Liberum said in a note, cutting the stock to "hold"from "buy".

"While January has started well and the share buybackprogramme has increased, this does not offset the disappointingmessage on margin improvement."

Royal Bank of Scotland was another high profilefaller, down 5.6 percent after its new CEO outlined plans for alarge-scale overhaul after reporting an 8.2 billion pound($13.64 billion) loss.

"We're so far from being out of the other side of the tunnelwith this stuff, it's unbelievable. It's another reminder thatwe're six years on from the onset of this, and they're stillpaying for it more than ever," CMC (BSE: CMCSL.BO - news) 's Morris said.

Troubled British insurer RSA also fell as it tooseeks to move forward with a restructuring programme, withex-RBS CEO Stephen Hester at the helm.

It fell 3.2 percent after Hester launched a plan to boostcapital by up to 1.6 billion pounds, half of which will betapped from shareholders and the rest from disposals and moneysaved from a dividend cut.

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