Thursday preview: Johnson Matthey full-year results, BoE policy decision

Johnson Matthey, the UK speciality chemicals and sustainable technologies company, is expected to report a modest improvement in full-year pre-tax profit on Thursday.

UBS analysts predict a 2.5% increase in pre-tax profit and have issued a ‘neutral’ rating on the stock ahead of the results.

The broker said the emission control technologies (ECT) market has turned “incrementally more negative against diesel”.

In process technologies (PT), the analysts said the slump in oil is likely to impact longer term growth in the unit but impact on the annual group results will be limited.

Fine chemicals is expected to be stable with a small improvement in sales in the second half, compared to the first.

Numis projects earnings per share growth of 2.1%, “as growth by ECT (an estimated 47.6% of EBIT pre central costs last full-year) will be off a high base and EBIT from PT and precious metal products divisions may decline.

Turning to macro-economic news, the Bank of England (BoE) releases its latest policy decision which is likely to be a non-event with analysts expecting no surprises.

The BoE is expected to maintain interest rates at 0.5% and the asset purchase programme at £375bn, amid low inflation and subdued growth. The minutes of last meeting showed policymakers expected a rate rise next year.

Daniel Vernazza economist at Unicredit Research said: “Financial markets have recently pushed back their expectation for the timing of the first 25bp hike to the third quarter of 2016 from mid-2016 and continue to expect only a very gradual path of rate hikes thereafter.”