Neil DennisJohnson Matthey, the producer of speciality chemicals and platinum group metals for vehicle catalysts, reported strong operational momentum in its first half and confirmed its outlook for the full year.
Group revenues rose 15% to £6,478bn in the six month to 30 September driven by higher precious metals prices and positive currency effects.
Operating profit slipped 2%, however, to £221.9m, as group earnings were hit by charges related to the company's restructuring programme.
Other first-half highlights
- Underlying sales growth 5% at constant rates and full year sales growth guidance is unchanged
- Underlying operating profit down 1% at constant rates, impacted by the US post-retirement medical plan credit in the prior period
- Underlying earnings per share up 4% to 99.8p
- Return on invested capital (ROIC) was maintained at 17.5%
- Cash inflow from operating activities of £7.8 million
- Interim dividend up 6% to 21.75p reflecting confidence in medium term outlook
CEO comment
Robert MacLeod, chief executive (left), said: "We had a strong start to the year with sales growth of 5% and guidance for the full year is unchanged.
"We made further investments in line with the strategy we outlined at our recent capital markets day which continues to strengthen our business.
"We are building a stronger platform from which we will achieve our goal of attractive returns to shareholders over the medium term: mid to high single digit EPS growth, expanding ROIC to 20% and a progressive dividend."
Market reaction
Investors have been cautious due to forecasts of growth in electric vehicles and fear this will undermine Johnson Matthey's market for emissions control technology. The shares fell 2.9% to £31.75 on Tuesday and are now down 10.33% since 2 November.