Johnson Matthey beats expectations

2nd Jun 2011 07:13

Full-year profits from speciality chemicals group Johnson Matthey came in ahead of market expectations with good performances in all parts of the business.The company notched up pre-tax profits of £260.6m in the year to 31 March on revenue of £9,985m. The year before the company had made £228.5m on revenue of £7,839m. Pre-tax profits were up 14% year-on-year while revenue grew 27%.Underlying profits before tax were £345.5m, up 36% from £254.1m the year before. Market expectations were for adjusted profits of £334.6m. Sales excluding precious metals advanced 21% to £2,280m from £1,886m a year earlier.Emission Control Technologies' sales grew by 25%, benefiting from good growth in light duty vehicle production and a strong recovery in its heavy duty diesel business, while Process Technologies also performed well, with sales up 24%, driven by good demand for its catalysts and another very strong performance from Davy Process Technology. All businesses within the Precious Metal Products Division performed well, the group said. Overall sales increased by 19% as the Services businesses benefited from higher precious metal prices and the Manufacturing businesses saw very strong demand for their products.Fine Chemicals Division had a good year with sales up by 11% mainly due to increasing demand for its active pharmaceutical ingredients.Earnings per share surged 38% to 119.0p from 86.4p the previous year, paving the way for an 18% increase in the full-year dividend to 46p, up from 39p the year before."At this time last year we commented on the short term uncertainties in our markets. This year confidence in our markets is more robust and after our strong performance in 2010/11, the group is expected to make further good progress in the current year," predicted chief executive, Neil Carson."The drivers that will provide superior earnings growth for the group in our existing markets are expected to remain strong for at least the next five years. Beyond that, we are confident that these markets will continue to deliver growth," Carson said.Carson said the company planned to increase its investment in research and development to target new areas of future growth for the business. "We are confident that the combination of our existing strengths and the investments that we are making now will position the group well for longer term growth," Carson said. --jh