Johnson Matthey looking solid after third quarter

Chemicals giant Johnson Matthey posted its third quarter trading update on Thursday, reporting it remained in line with expectations, and confirmed its outlook for the full year.

The FTSE 100 firm said sales in the quarter were up 19% at actual rates and 2% at constant rates, with underlying profit before tax ahead of the previous year at constant rates.

It said it expected the group’s performance to be slightly ahead of last year for continuing businesses, at constant rates.

Revenue was up 25% at actual rates and 14% at constant rates for the third quarter, to £3.13bn.

Sales, excluding precious metals sales, were up 2% at constant rates for emission control technologies to £549m, and up 10% at process technologies to £147m.

Precious metal products sales improved 12% to £102m, while fine chemicals dropped 9% at constant rates to £60m.

Johnson Matthey’s new business was down 10% during the quarter to £48m.

“Trading for the group in the third quarter was in line with our expectations,” the board said in a statement.

“Sales of £876 million were 2% up on last year supported by good demand across many of our markets.”

It said first half trends in emission control technologies continued in Q3, with good growth in Europe and Asia.

“As expected, process technologies benefited from a stronger order book and precious metal products' sales grew well due to improved demand and more favourable average precious metal prices.

“Fine chemicals was impacted by lower sales in North America, particularly of active pharmaceutical ingredients for attention deficit hyperactivity disorder treatments, although these should improve in Q4.”

The board explained that new businesses had a weaker quarter, partly as a result of phasing of orders in battery technologies.

“The group's underlying profit before tax was ahead of last year and our outlook for the full year remains unchanged.

“Johnson Matthey remains well positioned to benefit from demand globally for cleaner air, the trend towards increased use of generic drugs and a recovery in the petrochemical industry.

“Our strong market positions and differentiated technologies, supported by ongoing R&D investment and a strong balance sheet, will continue to drive attractive shareholder returns over the medium term.”