The speciality chemicals company posted pre-tax profit of £488mln for the year to the end of March, up 53% on the previous year, on revenue up 5% to £10.7bn.
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Last year’s profits were dented by a £50mln charge to settle a lawsuit with an automotive original equipment manufacturer supplier in the US. The group also took an impairment and restructuring charge of £90mln.
Excluding items, underlying pre-tax profit increased 8% to £523mln in 2019.
Sales, excluding precious metals, rose by 10% to £4.2bn, driven by a strong performance in its Clean Air business, which makes technology to reduce emissions from vehicles.
The group raised its full-year dividend to 85.5p from 80.0p last year.
For fiscal year 2019/20, the company expects growth in operating performance at constant rates to be within its medium-term guidance of “mid to high single digit” growth.
At current foreign exchange rates, however, currency movements are expected to hurt sales and underlying operating profit by £6mln and £2mln, respectively.
Johnson Matthey makes catalytic converters for a third of the world’s cars but has been developing a new type of battery material called eLNO, which it hopes will help it tap into the growing electric vehicles market.
The company said on Thursday that it continues to make progress in commercialising eLNO, having secured its first plant and a long-term supply agreement for raw materials with Nemaska Lithium.
In morning trading, shares fell 3.3% to 3,079p.
“The slow transition away from petrol and diesel vehicles is in theory not good news for the group," said Helal Miah, investment research analyst at The Share Centre.
"However, its focus is on selling technologies for cleaner, more fuel efficient vehicles as well as being at the forefront of developing higher energy density battery materials makes Johnson Matthey one to watch for the future. "
Miah said the group's share price has struggled to make any headway in recent years, much like its sector peers.
"Therefore we continue with our ‘medium risk hold recommendation’ for investors seeking a balanced return.”