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Diversified chemicals group Johnson Matthey has experienced high demand for its autocatalysts - which cut motor vehicle pollution. Sales of its heavy duty diesel catalysts increased to £79m from £6m in the first-half of last year. Indeed, group finance director John Sheldrick is adamant that profit growth will continue even if sales to US car makers decline. That confidence is based on a strong Asian market, which is experiencing robust vehicle sales growth.
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In fact, revenues from the environmental technologies side - excluding precious metals - rose 41 per cent in the period to £541m, and operating profit there grew 14 per cent to £65.2m. That partly reflected a positive impact from tougher government pollution restrictions. Meanwhile, the precious metals products division benefited from favourable trading conditions for platinum group metals (PGM), along with solid demand for refining services. The unit's revenues grew 18 per cent in the period with operating profit there up 27 per cent to £47.2m.
Mr Sheldrick says that he's expecting second-half profit growth to be similar to that of the first half. And broker Cazenove is expecting full-year pre-tax profit of £255m, with adjusted EPS of 86.9p.
Click here for a guide to the terms used in IC results tables.
| JOHNSON MATTHEY (JMAT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,653p | MARKET VALUE: | £3,548.6m | |
| TOUCH: | 1652-1653p | 12-MONTH HIGH: | 1,910p | LOW: 1,345p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 495p* | NET DEBT: | 39% | |
| Half-year to 30 Sep |
Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 2.92 | 104.6 | 35.10 | 9.90 |
| 2007 | 3.51 | 120.1 | 41.80 | 10.60 |
| % change | +20 | +15 | +19 | +7 |
Ex-div: 5 Dec Payment: 5 Feb *Includes intangible assets of £439m, or 205p a share |
||||
True a forward PE of 19 isn't exactly cheap. But Johnson Matthey is a defensive play on catalyst demand and buoyant PGM prices, leaving the shares looking longer-term good value.
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
