Johnson Matthey's final results provide a step up in class for Thursday's corporate diary

The Day Ahead will also bring updates from two FTSE 250-listed firms, transport operator FirstGroup and water utility Pennon, plus numbers from newspapers group Daily Mail

Catalytic converter testing
Johnson Matthey’s management said last November that they expected full-year operating profits at constant currency rates to be towards the upper end of guidance

The corporate news spigot is finally kicked open on Thursday, in an otherwise pretty dull four-day week, with one FTSE 100-listed firm and a pair of FTSE 250-listed groups set to provide updates.

The blue-chip interest will come from Johnson Matthey PLC’s (LON:JMAT) full-year results, which will be the specialty chemicals company’s first update since interims in November.

The group, which processes precious metals for use in catalytic convertors, increased its pre-tax profit by 19% to £244mln in the six months to 30 September, as revenue rose by 10% to £7.11bn.

Johnson Matthey’s management said then that they expected full-year operating profits at constant currency rates to be towards the upper end of its guidance for “mid to high single digit growth”, with currencies providing a £2mln benefit.

The performance of catalytic converters in the Clean Air division will be key to the group’s full-year performance as they account for 70% of operating profits.

The group’s New Markets operation will also be a big focus as Johnson Matthey’s investors hope to hear about the development of the group’s eLNO battery material, which it reckons is cheaper and more powerful than materials currently used in electric vehicle batteries but is not set to begin production until 2021/22.

“The electrification of the automotive sector has the potential to render JMAT’s core catalysts business redundant. So while investors shouldn’t expect profits from batteries any time soon, updates will nonetheless be pawed over by for signs of potential,” according to analysts at Hargreaves Lansdown.

FirstGroup board to put best foot forward

On the second line, transport firm FirstGroup PLC (LON:FGP) has come under fire from an activist investor in recent weeks, so its full-year results will give bosses a chance to explain why they’re the right people for the job.

New York hedge fund Coast Capital has called for an extraordinary general meeting at which it wants to ask shareholders to get rid of six of FirstGroup’s eleven board members.

One of Coast’s partners recently said the current directors range from “shades of super destructive to extraordinarily under-qualified”.

But the mid-cap buses and trains operator is adamant it has the “right team with the right experience” in place, and it will no doubt be looking to hammer that message home.

As for the business itself, UK bus ticket sales are likely to have continued to fall over the past few months, although investors will be hoping rail performance has picked up after disruption at the end of 2018.

In the US, FirstGroup’s Greyhound buses business endured a “difficult trading environment” in the opening few months of the financial year, but bosses did say in February that they were seeing “early signs of improvement”.

Results to flow from Pennon

The mid-cap owner of supplier South West Water and waste management business Viridor, Pennon Group plc (LON:PNN) will also drop its annual results on Thursday, a week later than its listed peers Severn Trent PLC (LON:SVT) and United Utilities PLC (LON:UU.).

The water sector as a whole has been under pressure after regulator Ofwat last month published harsher than expected draft determinations for prices the companies can charge for the five years from 2020.

Furthermore, investors are worried about the possibility of the Labour Party’s aim to renationalise water firms at book value given the distinct possibility of a general election in the medium term.

In a recent note, analysts at Deutsche Bank said the “slightly more conservative” estimates from Ofwat for both allowed returns and outperformance had led it to lower its equity return estimates very slightly.

The German bank expects Pennon to report strong growth in full-year profits driven mainly by the increased contribution from energy-from-waste plants at Viridor, forecasting a 9% increase in pre-tax profit to £353mln along with a 7% hike in the dividend.

More ad woes predicted for DMGT

Elsewhere, it has been a while since we last heard from Daily Mail and General Trust PLC (LON:DMGT), so the newspaper publisher’s half-year results should be keenly read.

Since DMGT’s last trading update in January, Brexit has been delayed, UK prime minister Theresa May has announced she will step down, and US Present Donald Trump has targeted everyone from China to Europe to Iran.

The result is that analysts expect companies to have been holding back on advertising spend in recent months while they wait for clarity about the current wealth of global uncertainties.

On top of that, retailers - who typically spend a lot on advertising their latest products - are going through a rough patch, which won’t help things either.

Another issue facing the company is the impact of slowing property sales on DMGT’s property information services business, which accounts for about 10% of revenues.

The company kept its full-year forecast in place back in January, but it will be interesting to see if it does the same again.

De La Rue looks to cash in on recent contract wins

Meanwhile, FTSE All Share-listed banknote printer De La Rue plc (LON:DLAR) started 2019 on a high note, inking multiple contracts in February and March as well as a joint venture agreement in April, so investors may be expecting some contributions from these in the firm’s full year results.

The company’s tax stamp division has made particular progress with contracts secured for services in six European countries as well as in Saudi Arabia, while the joint venture will see it partner with the government of Kenya to provide currency printing services.

The group maintained its full year expectations back with its interim results in November, so shareholders will be looking to see if all those wins may have printed some extra cash for the firm.

Significant events expected on Thursday:

Finals: Johnson Matthey PLC (LON:JMAT), FirstGroup PLC (LON:FGP), Pennon Group plc (LON:PNN), De La Rue plc (LON:DLAR), Helios Underwriting PLC (LON:HUW)

Interims: Daily Mail & General Trust PLC (LON:DMGT), Urban & Civic PLC (LON:UANC)


Ex-dividends to knock 5.38 points off FTSE 100 index: Marks & Spencer Group PLC (LON:MKS), National Grid PLC (LON:NG.), Sage Group PLC (LON:SGE), Whitbread plc (LON:WTB)

Economic data: US weekly jobless claims; US preliminary GDP; US pending home sales

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