What's in store today

Tuesday will see automotive retail network owner Pendragon (PDG) publish its final results.

The company last updated investors in October, when it confirmed trading patterns for 2011 were in line with expectations, with a strong fourth quarter performance anticipated from its prestige franchises. The company also outperformed the market in new cars (-10.3% versus the market at -11.3% in the third quarter).

Mike Allen, analyst at Panmure Gordon, forecasts that revenues will fall by 2% year-on-year to £3503.5 million, with pre-tax profits at £30.5 million. The consensus range for pre-tax profits is between £30.5 million and £33.4 million. Additionally, he does not believe that the company will declare a dividend.

Shares in the company, which have risen more than 70% in the past month, are currently trading on a 2012 price to earnings ratio of about eight times, a valuation that is "undemanding" in Allen’s view.

However, he rates the stock a ‘hold’, saying that the rally in the shares reflect a change in risk appetite from investors rather than a turnaround in market fundamentals. "We would expect the trading outlook to remain cautious for now," he stated.

On the same day, annual results from engineering group AMEC (AMEC) will mark the beginning of the support service industry’s results season.

Following an in-line trading update in November, Seymour Pierce’s analyst Kevin Lapwood sees little room for surprise on the numbers. Instead, he believes that investors will focus on actions taken to improve the efficiency of its balance sheet.

Will shares in biotech company Genus (GNS) continue to touch new highs? All eyes will be on new chief executive Karim Bitar as he presents his first set of interim results.

Genus’s last comment on trading was 10 November when it stated that adjusted pre-tax profits for the first four months of its fiscal year was "well ahead of last year".

Graham Jones, analyst at Panmure Gordon believes that the message will be just as optimistic, with "superior product offering and unparalleled distribution reach" driving profits. "Also 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," he added.

Shares in the company are trading on a 2012 price to earnings ratio of about 21 times.

Devro (DVO) will also report preliminary results for the year ended 31 December on Tuesday.

According to Reuters, consensus is expecting revenues for the full year to reach £226 million.

Damien McNeela, analyst at Panmure Gordon believes that underlying demand drivers for Devro’s products, namely increased meat consumption in developing markets and the switch from natural gut casings to collagen casings remained in tack.

"In addition we see further potential for margins to improve as the company’s investment programme to increase capacity and improve efficiency," he added.

Devro’s shares are currently trading on 2012 price to earnings ratio of about 13 times.

"The shares have outperformed the FTSE All Share by 25% over the past year but we believe there remains further upside given the structural demand drivers and the opportunity to increase operating margins," stressed McNeela, reiterating his ‘buy’ recommendation.

In terms of economic data, January’s public finances will be published.

Howard Archer, chief UK and European economist at IHS Global Insight, forecasts a net repayment of £8 billion in January on the Public Sector Net Borrowing Requirement (PSNBR), stating that January normally sees a net repayment on the public finances as it is a key month for tax receipts.

However, he warned that it seemed "inevitable" that the public finances would be increasingly pressurized over the coming months by muted economic activity eating into tax revenues and pushing up unemployment benefit claims.

Trading updates

Croda International, Drax Group, Quarto Group, AMEC, Morgan Sindall Group, Rathbone Brothers, Segro, Genus, Devro, Primary Health Properties, Safestore Holdings, Pendagron

AGM/EGM/Special Meetings

Amiad Filtration Systems