THE prospect of a "fire sale" of Tesco assets has been raised by a City analyst after the troubled supermarket giant warned its full-year trading profits would be £1 billion below previous guidance.

THE prospect of a "fire sale" of Tesco assets has been raised by a City analyst after the troubled supermarket giant warned its full-year trading profits would be £1 billion below previous guidance.

Tesco's year of woe continued yesterday when it issued a fourth profit warning in five months.

That sent shares down by as much as 17 per cent in early trading and the stock touched a 14-year low.

The price later rallied slightly but still closed the day down 12.4p, or 6.6 per cent, at 174.9p.

The latest fall means the share price of Britain's biggest food and drink retailer has tumbled from 334.4p since the start of the year.

Tesco said it previously warned that an accountancy blunder, which saw it overstate its first half profit projections by £263 million in September, would weigh on its second half performance.

The scandal led to the resignation of previous chairman Sir Richard Broadbent, who described the episode as a "matter of profound regret".

It also told the City second half trading would be affected by actions taken by its new management team, led by chief executive Dave Lewis, to halt falling profits and loss of market share.

Having previously announced it expected to deliver group trading profits in the region of £2.4bn to £2.5bn for the year ended February, 2015, it warned the figure will not now exceed £1.4bn.

The update failed to impress Marc Kimsey at Accendo Markets, who repeated his view of September 22 in declaring that Tesco is "no longer a viable investment".

He said: "The share price has plunged by 25 per cent since my last comments and unfortunately [this] update suggests Tesco's circumstances will worsen before improving, and at great cost.

"Full-year profits are way off the City's already low expectations. A fire sale of assets is almost nailed on and a rights issue cannot be ruled out.

"Traders are clearing the decks of what remaining stock they had, and that of sector peers."

There has previously been speculation that Edinburgh based Tesco Bank, headed by Benny Higgins, would be one of the assets which Tesco could cash in on.

Tesco has seen its market steadily erode in light of tough competition in the UK grocery market, with consumers increasingly switching to discounters Aldi and Lidl.

The company has also faced criticism over its own strategy, and has admitted itself that it has suffered from running too many untargeted promotions.

The latest grocery market data from Kantar Worldpanel found Tesco's market share fell by 3.9 per cent to 28.7 per cent in the 12 weeks to November 9.

However the analysis noted that the rate at which Tesco is losing share has slowed.

The retailer insisted yesterday that it has received an encouraging initial response from consumers to the actions taken by the new leadership.

It said its new commercial approach will underpin stronger relationships with suppliers to the benefit of customers, while also ensuring that its "revenue recognition is transparent and appropriate".

Tesco has boosted staff numbers by more than 6,000, increased the availability on 1,000 of its most popular lines and invested further in price-cutting to improve the customer offer, Mr Lewis said.

"Tesco is focused, and will continue to focus, on doing the right thing for customers," he said.

"This means running our business in a way that everything we do creates sustainable value.

"Whilst the steps we are taking to achieve this are impacting short-term profitability, they are essential to restoring the health of our business."

Tesco will update the market on its performance over the key Christmas trading period on January 8.

Tesco's troubles also dragged down the shares of its peers.

Sainsbury closed the day down 4.2p, or two per cent, at 231.6p while Morrisons dropped 8.2p, or 4.4 per cent, to 176.7p.