The shares were at one time down to 57p. They closed 5p lower at 59p.
The analyst Alan Richards cut his estimate for the year just ended from pounds 125m to pounds 85m. This year's figure has been reduced to pounds 140m from pounds 170m.
Lower metal prices, particularly for platinum and rhodium, and the tough trading being experienced by the group's hotels, where the Libyans have a large minority interest, prompted the profit downgrading.
Another dividend cut is also in prospect. In the previous year Lonrho reduced the payout from 15.73p a share to 13p. For last year Mr Richards has cut his forecast from 5p to 4p and for this year from 7p to 6p.
He rates the shares, more than 300p four years ago, as a recovery hold. The group has cut its borrowings and should benefit from any economic upturn.
Lonrho's latest discomfort occurred as the stock market responded calmly to the Chancellor's speech at the Tory party conference. The FT-SE share index was at one time up 30.2 points on expectations of an interest rate cut of at least half a point.
Once it became clear that money rates were unchanged, shares lost some of their enthusiasm and the FT-SE index closed 21.7 higher at 2,538.8. Government stocks ended almost a point higher.
Interest rate hopes linger, however. A cut today is regarded as one possibility. Another theory is that Germany will be shamed into an early move to lower its rates.
Drug shares had a good session, helped by US moves that should speed up the operations of the Food and Drug Administration. Glaxo Holdings rose 13p to 777p and Wellcome, with a little help from a Lehman Brothers push, jumped 27p to 975p.
Breweries were active, spurred by the story that Philip Morris, the US beer, food and tobacco giant, wanted to buy Heineken, the Dutch brewer with close trading links with Whitbread.
With Heineken pouring cold water on the story, Scottish & Newcastle, long regarded as a Philip Morris target, frothed up 10p to 426p. Scottish is selling its 17 per cent interest in JD Wetherspoon, the pubs chain coming to market. Bass put on 13p to 557p and Whitbread 'A' 17p to 433p.
Invergordon Distilleries jumped 10p to 319p as expectations strengthened that American Brands is preparing to bid again. Asda, the supermarket chain, edged ahead another 1.75p to 38.25p.
Tate & Lyle, up 5p to 347p, was helped by a positive analysts' meeting but Rank Organisation was unsettled as it became known it had called an analysts' meeting for later this month. Some fear the group will be exceedingly cautious about the past year's trading and prospects. The shares fell 8p to 522p.
Thorn EMI dipped 5p to 773p as Societe Generale Strauss Turnbull cut its profit estimate.
Bowater, up 11p at 840p, continued to reflect a successful analysts' visit to its French operations. Laird Group, the car components maker, remained under the whip of a Carr Kitcat & Aitken downgrade, falling 15p to 244p.
T&N slipped 3p to 138p as James Capel placed about 4 million shares at 135p.
Building shares had a difficult session as Higgs & Hill and Ibstock Johnsen produced dismal results. Higgs fell 2p to 36p and Ibstock 4p to 45p.
Royal Insurance and Sun Alliance were unimpressed by the merger of their Australian non- life insurance operations. Sun fell 7p to 286p and Royal was unchanged at 183p.
Guardian Royal Exchange put on 5p to 150p. Credit Lyonnais Laing rates the shares. It expects losses to be cut to pounds 48m this year with a pounds 95m profit next. Last year losses reached pounds 209.7m. The analyst Charles Coyne believes the dividend will be raised to 7.25p a share this year and to 7.5p next.
Two tertiary oil shares, Bula Resources and Oliver Resources, were unmoved by confirmation of the long-suspected Celtic Sea oil strike. Bula stuck at 2p and Oliver at 2.25p.
Cairn Energy slipped 1p to 30p. It is raising pounds 6.1m through a share issue.
Capita Group, the management services consultant, advanced 30p to 367p as it duly announced it was acquiring Yates Edge & Partners for pounds 600,000 in shares.
Worth Investment Trust stayed put at 17p as Scottish Value Trust lifted its stake to 20.3 per cent.
Equities failed to hold their best levels yesterday. The FT-SE share index closed at 2,538.8 points, up 21.7. At one time it was 30.2 higher. The FT 30-share index rose 23.1 to 1,870.4. Turnover reached 517.6 million shares with 18,847 bargains. Government stocks advanced by almost a point
Shares of the life insurer Refuge Group were unchanged at 680p yesterday as the stockbroker Cazenove placed with institutions a 10.02 per cent stake it had purchased from former director Hal Jackman. He has become Lieutenant-Governor of Ontario, which means he must, under Canadian law, sever his business interests. Cazenove placed the shares at 650p.
Profit expectations for Arjo Wiggins Appleton, the paper and packaging group, which surprised with an interim dividend cut last month, are still too high, County NatWest believes. It has, therefore, cut its year's profit forecast by pounds 10m to pounds 170m and is looking for only pounds 205m next year. Last year the group achieved pounds 232m. The shares fell 7p to 156p.Reuse content