Johnson Matthey reports good start to year

Johnson Matthey reported a good start to the financial year but the chemicals and special metals group reduced its estimate for gains from metal prices.

Demand was strong in the first quarter as sales rose 63%, the company said in a statement before its annual general meeting. Sales were supported by stronger business at its clean air division and in efficient natural resources, which gained from higher precious metal prices.

Johnson Matthey said it expected underlying operating performance to grow by at least a mid-teens percentage - an improvement on earlier guidance for a low-to-mid teens increase.

Precious metals prices have declined since annual results at the end of May and if prices stay at current levels the net benefit to underlying operating profit will be about £65m, the company said. In May the company said it expected the benefit to be £120m.

Exchange movements at current rates will reduce annual profit by about £20m compared with a £25m potential hit predicted in May.

"The year has started well, with a continuation of the good demand seen in the second half of 2020/21," Johnson Matthey said.

Johnson Matthey shares fell 2.4% to £29.45 at 09:16 BST.