LONDON (ShareCast) - Profits from sausage skin maker Devro for 2011 will be served up as a smaller portion, with the group having disposed of its German distribution business, Devro GmbH, at the end of September.

Profit before tax is expected to dive to £41.1m from £55.2m in 2010, on sales down to £226.6m from £237.0m the year before, but the picture is distorted slightly by the Devro GmbH sale.

With the German business stripped out, Panmure Gordon is forecasting underlying revenue growth of 7.5% to £227.7m, driven principally by increased demand for collagen casings, and profit before tax to improve by 10% to £41.6m. The broker is forecasting a full year dividend of 7.7p, in line with consensus, and net debt of around £30m.

"We expect the growth trends reported for the first nine months to have continued for the remainder of the year, with good growth in Western and Eastern Europe, Russia and Latin America. Although volumes are likely to be lower in the UK and Australia, we have been encouraged by Cranswick’s comments about the improved promotional activity in the UK since the start of the year. Additionally we’ll be looking for an update on the progress being made by the company’s Select product, in particular in Japan, where the company has reported an encouraging start," the broker said.

Sticking with a farming theme, Panmure Gordon has also been casting its eye over livestock genetics firm Genus, which issues interim results, the first set of figures to be presented by new boss Karim Bitar.

The broker said there may be a new man with his hand on the tiller but the message is likely to remain the same: "strong profits growth driven by superior product offering and unparalleled distribution reach".

The broker forecasts 15% profit before tax growth to £22.0m, helped by lower interest costs, and earnings per share (EPS) of 24.8p, up 17.4% from the interim EPS last year, but adds the caveat that if its forecasts are awry, they are likely to be so on the conservative side.

"We expect a reiteration of the message that Genus is accelerating the rate of genetic improvement which adds value to its sales in both porcine and bovine markets and keeps it ahead of its fragmented competition," Panmure Gordon said.

On the economic front the public finance figures are set to be released. Barclays Capital points out that January is a key month for tax receipts, so the borrowing requirement numbers should contract. The consensus figure is for the public sector net borrowing requirement (PSNBR) to be negative - i.e. for there to be a repayment - at -£9.1bn, versus a PSNBR of £10.791bn in December.


INTERIMS
Albemarle & Bond Holdings, Dechra Pharmaceuticals, Genus

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Confidence Indicator (EU) (10:00)

FINALS
Amec, Devro, Dragon Oil, Drax Group, Heavitree Brewery, Quarto Group Inc., Rathbone Brothers, SEGRO

IMSS
Safestore Holdings

EGMS
Amiad Water Systems Ltd

AGMS
Andor Technology, Blackrock Frontiers Investment Trust, Emblaze Ltd., Leed Petroleum, Optos, Titon Holdings

UK ECONOMIC ANNOUNCEMENTS
Public Sector Finances (09:30)


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