Johnson Matthey PLC (LON:JMAT) said it plans to cut around 2,500 jobs over the next three years as it reacts to a world with coronavirus and said it will still pay a final dividend.
The catalytic convertor manufacturer reported profit before tax of £305mln for the year to 31 March, down 38% on the year before despite a 38% increase in revenue to £14.6bn.
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Excluding the effects of higher platinum metals prices, underlying revenues were down 2% £4.2bn.
There was a £60mln impact attributed to the effects of the coronavirus pandemic, half from lower demand for its Clean Air division and the rest from higher trade debtor provisions.
With cash inflow from operating activities of £598mln, a final dividend of 31.125p was half the level of the previous year, meaning the total payout for the year of 55.625p per share is down 35%.
“This is not intended to be a rebasing,” the board said, adding that it “remains committed to a progressive dividend and anticipates restoring future dividend payments to levels seen prior to the COVID-19 pandemic when circumstances permit”.
On the outlook for the current year, the job cuts are part of a drive to cut £80mln over three years, as sales of its catalytic convertors will be connected to an automotive industry that has very little visibility on future demand.
The platinum recycling division has seen “little impact so far” from macroeconomic weakness but is a later-cycle business and the company said it expects “this will come through as lower demand begins to affect the industries it serves and because of volatile feedstock dynamics”.
Net debt stood at £1.1bn at the end of March, with £1.3bn of available cash and undrawn bank facilities.