Special dividend lifts Johnson Matthey

There were a few bright spots in what was overall a difficult period for trading. The new business arm was buoyed by acquisitions and demand for battery technologies on e-bikes, while Johnson Matthey's core emission technology unit once again emerged as the top performer among the group's more established divisions.

Light-duty vehicle catalyst sales rose 11 per cent to £574m, despite a 3 per cent fall in global vehicle production. The introduction of Euro 6b legislation and strong appetite from Asia played key parts in this success. Coupled with operating efficiencies, the top-line growth propelled the division's underlying operating profit up 15 per cent to £136m. Interestingly, there was no reference to Volkswagen and the impact its emission-rigging scandal could have on the auto catalyst business, even though the recent ostracising of diesel engines has weighed on Johnson Matthey's share price.

Investors have also worried about the global economic slowdown and flagging demand for raw materials, which were mainly to blame for a less inspiring performance across the chemical group's other divisions. Slower licensing activity in China and tepid upstream oil and gas markets sent underlying operating profit from the process technologies unit down 28 per cent to £36m. And profit sank even further in the group's precious metals arm, as average platinum prices fell by a fifth (although the sale of the gold and silver refining business in March was also a major factor). Management reacted to the problems by implementing a restructuring programme designed to reduce ongoing costs by about £30m a year.

Bank of America Merrill Lynch expects adjusted EPS of 146p in the year to March 2016, down from 177p in FY2015.