Even Johnson Matthey's (JMAT) own management team were surprised at how well the first half went and, despite some well-flagged headwinds, the share price has accelerated to a record high.
Underlying pre-tax profit grew 13 per cent to £213m, driven by the catalyst manufacturer's core emission control technologies division. Truck and engine manufacturers have rushed to buy cheaper catalytic convertors before new emissions legislation - Euro VI - takes effect on 1 January, boosting the unit's underlying operating profits by 16 per cent to £94.2. Rising car production in both the US and China is a tailwind, and a nascent recovery in European output should drive further growth, but management admits it is unlikely to do as well in the second half.
Elsewhere, the industrial catalysts business made £48.9m, 17 per cent more than last year (though the growth was flattered by an acquisition). Profit at the precious metals division, meanwhile, grew by almost a quarter, with problems at the Salt Lake City refinery now resolved. However, a renegotiated and less lucrative contract with Anglo Platinum (Amplats) begins at the start of January, so fourth-quarter profits will suffer.
Strip out that impact and bosses say the second half will be similar to the first. Deutsche Bank expects full-year adjusted pre-tax profit of £423m, giving adjusted EPS of 163.4p (from £383m and 147.7p in 2013).
JOHNSON MATTHEY (JMAT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,161p | MARKET VALUE: | £6.48bn | |
| TOUCH: | 3,160-3,164p | 12-MONTH HIGH: | 3,181p | Low: 2,150p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 696p* | NET DEBT: | 56% | |
| Half-year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 4.89 | 180 | 69.2 | 15.5 |
| 2013 | 6.41 | 202 | 86.0 | 17.0 |
| % change | +31 | +12 | +24 | +10 |
Ex-div: 27 Nov Payment: 4 Feb *Includes intangible assets of £767m, or 374p a share | ||||
