Platinum refiner Johnson Matthey PLC (LON:JMAT) provides one of the week’s rare blue-chip appearances, with Thursday’s full-year numbers likely to be boosted by a windfall non-cash bonus of around £30mln from US corporate tax rate changes.
The company, best known for emission control systems (catalytic converters et al) is making a concerted, if belated, effort to move into high energy battery materials for commercial heavy duty applications.
At the end of January, it announced a collaboration with NYSE-listed Cummins that will see them work on “the development of new products with enhanced performance characteristics for commercial applications”.
Liberum Capital Markets thinks that at this stage the collaboration may mean nothing more than Cummins becoming the eighth original equipment manufacturer trialling Johnson Matthey’s eLNO high-energy battery materials technology.
The broker reckons trading in the second half of the financial year just ended will have been in line with company guidance but there might have been higher central charges and interest costs.
Analysts are expecting profit before tax of £455mln and earnings per share of 204.93p. The dividend is expected to rise to 78.21p from 75p the year before.
Takeovers and offer talks the likely focus for FirstGroup
Among the mid-caps, full-year results from bus and trains group FirstGroup PLC (LON:FGP) on Thursday might offer a clue as to why the board rejected the recent bid approach.
Of course, we do not know the terms that were proposed by Apollo Global Management but we do know that FirstGroup was quick to say they undervalued the group, which puts a bit of pressure on the transport operator’s management team that it could do without, given it has been struggling with adverse weather conditions and tough competition.
Competition from airlines affected the performance of its Greyhound business services while snowstorms in January and driver shortages dragged on its school bus unit.
The dividend was binned back in 2013 at the time of its £615mln rights issue but with the group having recently refinanced its debt and saved around £14mlns a year in interest payments and bearing in mind that one bid approach leads to another, the directors might dangle the prospect of a return to paying dividends in the near-terms, rather than in the medium-term, as has been the pledge in the past.
“The approach ought to act as a catalyst for more urgent action by the board to crystallise value and/or for more credit for the potential value of the group being reflected in the share price,” suggested Liberum Capital Markets, when the bid approach was made by Apollo last month.
Thursday May 31:
Finals: Firstgroup PLC (LON:FGP), Johnson Matthey PLC (LON:JMAT), 7Digital Group PLC (LON:7DIG), Air Partner PLC (LON:AIR), Caffyns PLC (LON:CFYN), TR Property Investment Trust plc (LON:TRY)
Trading update: Card Factory PLC (LON:CARD)
Ex-dividends: To knock 6.05 points off FTSE 100 index - Marks & Spencer Group PLC (LON:MKS), National Grid PLC (LON:NG.), Taylor Wimpey PLC (LON:TW.)
Economic data: US weekly jobless claims; US personal income and outlays; US Chicago PMI