Market report: Domino falls on warning

Inevitably, analysts cut their estimates, with those at Numis Securities lowering their forecast for 2015 pre-tax profits by 5pc to £58.7m.

However, even before Tuesday’s warning, the Numis analysts had been more cautious than the wider research community on Domino’s prospects.

“We note that we were below consensus expectations which would now have to reduce [by] circa 11pc to reach new guidance,” they said.

In the wider market. the FTSE 100 added to Monday’s 24.64-point decline and drifted a further 13.49 lower to 6,787.07.

A weaker-than-expected showing from Germany’s Ifo survey of business sentiment dragged on the index, as did continuing nervousness about the crisis in Iraq.

HSBC drew attention in the FTSE 100, despite just dipping 1 to 605.4p. Dealers noted that a block of some 33m shares in the bank were traded at 606.3p a piece.

Bargain-hunters came in for the airlines, which were sold off aggressively in recent days amid worries that the spike in the oil price would send fuel costs higher: easyJet climbed 56p to £14.79 and International Airlines Group advanced 6.9 to 386.8p. Both were helped by the crude price, which was lower for most of the session.

But Petrofac, the oilfield services group, relinquished early gains to close down 22p at £12.23 after a half-year trade update.

Following a profit warning last month, the company stuck to its guidanceon Tuesday, although Investec analyst Neill Morton said the fact that profits would be heavily weighted toward the second-half of the year was a “niggle”. “While this is not unusual, the likely 25/75 split is, we suspect, higher than generally expected,” Mr Morton told clients.

Returning to the risers, takeover target Shire climbed 101p to £44.04, a day after it laid out its defence against American predator AbbVie.

Barclays analysts said that Shire’s plan to double sales to $10bn by 2020 was “ambitious but plausible”. They also reckoned that AbbVie could afford to lift its offer to £55 a share “before transaction costs neutralise any anticipated earnings accretion”, taking it well above the value of its most recent cash and shares approach that was worth £46.26.

Shanks, the waste group, was 2½ dearer at 104p after analysts at broker Goldman Sachs lifted their stock recommendation to “buy”, principally on the belief that the small-capper may be taken over.

Shanks, they said, is “a credible bid candidate given its relatively small size, low valuation and ongoing M&A activity in the European waste market”.

Elsewhere among the risers, microchip designer Imagination Technologies – the third most-shorted stock in the FTSE 250, according to Markit – was squeezed 18 higher to 251½p by short-sellers covering positions in the wake of well-received full-year results.

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