Tighter emissions rules a boost for Johnson Matthey

Speciality chemicals company Johnson Matthey posted a 53% rise in pre-tax profits as tighter regulation in Europe and China helped its clean air division which makes automotive catalytic converters.

Profits came it at £523m on revenues of £10.7bn, up 5% as the company said it expected current year growth in operating performance at constant rates to be within medium term guidance of mid to high single digit growth.

The FTSE 100 company said operating profit for the year ended to March 31 rose to £531m from £359m a year ago.

Earnings per share, the company's preferred metric, rose 39% to 215.2 pence.

A final dividend of 62.25p a share was declared for a total payout of 85.5p a share, up from 80p a year earlier.

The company said it expected a year of modest growth in 2019/20, weighted to the first half as it realised the benefit of annualised share gains, partly offset by reinvestment into research and development.

“We anticipate that these investments for growth and efficiency will lead to a slightly lower margin than in 2018/19. Beyond 2019/20, we expect sales and operating profit growth to be increasingly driven by the introduction of new legislation in China and India,” the company said.

In the reported year, continued strong sales and operating profit growth in the clean air unit, which accounts for 70% of operating profits, helped Johnson Matthey achieve its planned market share of around 65% in European light duty diesel.

Sector sales grew 11%, well ahead of the decline in global vehicle production, driven by double digit growth in both light and heavy duty catalysts, it added.