£101m sliced from pizza giant as price war bites

Britain’s biggest pizza delivery firm plunged to its lowest value in 16 months yesterday after analysts at investec slapped it with a ‘sell’ rating.

Domino’s Pizza saw £101m sliced off its value after investec said it is becoming less profitable, with growth set to slow. in particular, investec said Domino’s has been hit by aggressive discounting at rival Pizza Hut, which has forced it to lower its own average prices.

Meals bought with offers now make up around 80pc of Domino’s sales. investec said that Pizza Hut’s discounts typically cut the cost of customer’s orders by 41pc, compared to a 36pc discount at Domino’s. it said increasing competition and a weaker consumer environment are also likely to hit sales, while rising food and staff costs will hit profit margins.

‘We believe the challenges that Domino’s faces will lead to greater earnings risk,’ said investec. shares fell 6.5pc, or 20.5p, to 295p.

the FTSE 100 enjoyed a strong morning after Bank of England governor Mark Carney said an interest rate hike is far from on the cards in his speech at Mansion House. But it slipped into the red in afternoon trading as oil prices fell towards $45 a barrel. it finished down 0.7pc, or 51.1, to 7472.7.

Copper miners were also hit after the metal’s price slipped nearly 1.3pc. Antofagasta fell 4.6pc, or 37p, to 755.5p while BHP

Billiton slipped 3.3pc, or 39p, to 1140p. Glencore and Rio Tinto also fell after rio tinto shunned Glencore’s £2bn offer to buy its Coal & allied division in australia in favour of a smaller offer from Chinese- owned miner Yancoal. rio tinto said it preferred Yan- coal’s offer because it ‘offers the best value and great transaction certainty for shareholders’.

at the time of going to press, Glencore had only said it would respond ‘in due course’, although one source close to the company told reuters that executives were ‘in a state of disbelief’. Glencore sank 3.9pc, or 11.35p, to 276.6p, while rio tinto fell 2.9pc, or 88p, to 3000p, also marred by the resignation of director John Varley over fraud charges. nervy investors sent broadcaster

Sky down slightly after it was announced that the Government will rule on whether it can be taken over by rupert Murdoch’s Fox by next thursday.

shares were down 0.3pc, or 2.5p, to 957.5p, a six-month low. Lxury clothes firm Burberry

Group sat near the top of the index after Berenberg bumped its price target for the stock up to 1900p from 1840p and reiterated its ‘buy’ rating. Berenberg said Burberry is unlikely to see any vast improvement until new chief executive Marco Gobbetti has settled into his role after joining next month. But it said the appointment of chief financial officer Julie Brown in January could accelerate Burberry’s returns to shareholders, citing its recent decision to buy back £300m of shares. Berenberg also noted the popularity of Burberry’s leather handbags in China, despite the firm lagging behind competitors in the huge growth market in general. shares rose 0.8pc, or 13p, to 1755p.

in the mid-cap market, Assura dropped 2.8pc, or 1.8p, to 61.7p after raising £98.4m by placing 164m shares at 60p each.

assura develops and invests in properties such as GP surgeries and rents them to the nHs. it plans to use the money to fund its pipeline of investment and keep debt levels low.

in the junior market, science innovation firm Touchstone Inno

vations fell 1.1pc, or 3.12p, to 287.5p after receiving a takeover offer from FtsE 250 rival IP Group, down 0.5pc, or 0.6p, to 133.4p.