Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Johnson Matthey shares rise as underlying full-year sales slightly beat expectations, dividend up 7%

Tthe FTSE 100-listed automotive catalysts manufacturer saw its underlying sales at constant currency rates grow by 7% to £3.846bn, with 8% growth in the second half
Catalyst manufacturing
Johnson Matthey is hiking its final dividend by 7% to 80p, up from 75p a year earlier

Johnson Matthey PLC (LON:JMAT) saw its shares rise on Thursday after the specialty chemicals firm saw its underlying full-year sales come in slightly ahead of expectations and it hiked its dividend by 7% reflecting confidence in the outlook.

In results for the year ended 31 March 2018, the FTSE 100-listed automotive catalysts manufacturer saw its underlying sales at constant currency rates grow by 7% to £3.846bn, slightly ahead of the company’s expectations, with 8% growth posted in the second half.

READ: Johnson Matthey to take £50mln hit as it settles engine lawsuit

The firm reported a 1% rise in underlying pre-tax profit to £486mln, up from £482mln a year earlier, with operating profit up 2% to £525mln.

Robert MacLeod, Johnson Matthey’s chief executive, commented: “We have made significant progress in executing our strategy and delivered a financial performance in line with our expectations at the start of the year.”

He added: “In the coming year we expect mid to high single-digit growth in operating performance.

“The changes we are making as we continue to develop our business give me confidence in our strategy to deliver, over the medium term, mid to high single-digit EPS CAGR, expanding ROIC to 20% and, as a result, a progressive dividend."

The group proposed an increase in the final dividend of 7% to 80p, up from 75p a year earlier, which, the CEO said, “reflects our confidence in the prospects of Johnson Matthey.”

In early morning trading, Johnson Matthey shares were up 2.6% at 3,486p.

“Great deal going on under the bonnet”

Richard Hunter, head of markets at Interactive Investor commented “There is a great deal going on under the bonnet at Johnson Matthey, with its cash generative ability allowing further reinvestment into new technologies.”

He added: “There will, however, continue to be bumps in the road along the way. The Return on Capital figure moved in the wrong direction, down to 16.4%, making the 20% target rather more of a stretch.”

“Nonetheless,” Hunter concluded, “the potential is clear for the company and the initial positive reaction to the results builds on a 10% spike in the share price over the last three months alone.

“During the last year, the shares have added 8.3%, outperforming the wider FTSE100 which has risen 2.1%, and this update is likely to consolidate the general market view of the shares as a buy for the long term.”

View full JMAT profile View Profile

Johnson Matthey Timeline

Related Articles

Ray Gibbs
March 07 2018
Haydale has been investing heavily in its Taiwanese operation following October’s £9.3mln fundraise
Cleaning products
August 05 2018
Most of the polymer maker's activities will be consolidated into its US operations, improving the link between product support and manufacturing

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use