Johnson Matthey’s results don’t satisfy markets

Shares in FTSE 100 Johnson Matthey (LON:JMAT) dropped by 4.15% to 3,052p (as of 11:25 BST) despite the firm reporting a 53% increase in pre-tax profits for the year ended 31st March. Revenues were up by a more modest 5% and it is also worth noting that profits for the prior year were unusually low due to the impact of extraordinary legal and restructuring costs.

Chief executive Robert MacLeod said: “We had another good year with strong sales and operating profit growth, as we progress our strategy to deliver our vision for a cleaner, healthier world.

“In the year, Clean Air performed strongly and we are investing in new plants to satisfy future demand, particularly from Asia which will be our next key growth driver. We remain excited by the growth opportunity in Battery Materials and commercialisation of eLNO®, our leading ultra-high energy density cathode material, continues at pace. We made further investments in Health to develop our pipeline of products and in Efficient Natural Resources we continue to drive efficiencies whilst focusing on high growth market segments. To support our long term growth and as we broaden our presence in sustainable technologies, we are also developing innovative solutions for fuel cells and battery materials recycling.

“Delivery of our strategy is underpinned by the fundamental changes we are making across all aspects of the group. Our business is becoming more agile and efficient, with greater capability to deal with the fast changing world around us. We have invested in safety, people, systems and processes whilst continuing to target further improvement. The ongoing roll out of our single global ERP system which will standardise processes and transform the way we work is an example. Together, all of these actions are enabling us to strengthen our platform for growth.

“In light of our strong performance, continued delivery against our strategy and confidence in the group’s future growth prospects, we are proposing a 7% increase in the ordinary dividend for the full year. For 2019/20, we expect growth in operating performance at constant rates to be within our medium term guidance of mid to high single digit growth“.