5th June 2014
Chemicals group Johnson Matthey has reported a 17% jump in pre-tax profits to £406.6m for the year ended 31 March writes Philip Scott.
The FTSE 100 listed platinum specialist said that revenues rose 4% to £11.2bn and that sales excluding precious metals were up by 11% at £3bn.
Investors will also be cheered by the news that the firm declared a final dividend of 45.5p, resulting in a full year dividend up 10% at 62.5p.
The business’s Emission Control Technologies arm, which focuses on platinum refining and making catalytic convertors to filter car pollutants, outperformed the underlying growth rate in many of its markets with sales up 13% and underlying operating profit 25% higher helped in part by continued growth in Asia.
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However precious metal sales were in line with the previous12 months while underlying operating profit was 5% ahead as the section was impacted by the loss of its contract with Anglo American Platinum and lower average precious metal prices.
Commenting on the results, chief executive Neil Carson, who steps down from his role today after a decade at the helm was cautiously optimistic. He said: “In 2014/15 continued growth across the company will be offset by the adverse impact of the loss of commission revenue from Anglo Platinum and by the effect of foreign currency translation, if today’s exchange rates prevail. Consequently, we currently expect that the group’s performance in 2014/15 will be broadly in line with 2013/14.”
Shares in the firm, currently rated a ‘hold’ by market consensus, were off 34p, or 1% at 3,224p by 8:45am.
Graham Spooner, investment research analyst at The Share Centre, said: “Investors will be pleased to see Johnson Matthey’s emissions control business continues to perform well as it accounts for a significant proportion of operating profits. In a world increasingly concerned with cleaning up its environmental act, it is well placed as the world leader in the production of catalytic converters and has seen improved demand for its technologies.
“We continue to recommend Johnson Matthey as a ‘hold’ for investors. The company has highlighted it is cautious on its outlook and the share price is quite highly rated, largely trending sideways since its outperformance last year.”
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