Johnson and Matthey recorded an underlying profit of £504m
Johnson Matthey (LON:JMAT), the chemicals manufacturer, forecast low-to-mid teens growth for this year on strong demand for its autocatalytic converters and stricter pollution rules in Asia.
The FTSE 100 company also posted a fall in its yearly profit.
Johnson and Matthey recorded an underlying profit of £504m for the year up to the end of March, down from £539m a year before.
The company’s revenue rose by 8% on higher average precious metal prices.
The firm said its balance sheet is in a strong position, with net debt of £775m, and a net debt to EBITDA of 1.2 times.
The Johnson Matthey share price is down by 2.73% on Wednesday to 3,064p per share.
Ben Nuttall, senior analyst at Third Bridge commented on the company’s results:
“Johnson Matthey’s full year results show sales excluding precious metals 5% lower than last year primarily driven by people buying few cars, but slightly beating street expectations. CAPEX for the group is expected to ramp up to as much as GBP 600m, as investments in battery material capacity continue,” Nuttall said.
“Johnson Matthey’s key challenge is managing the transition from internal combustion engines to battery-powered and hydrogen-powered vehicles. Compared to its competitors Johnson Matthey’s strength in diesel catalytic converters is likely to be first to decline, and their strengths in eLNO and hydrogen are likely to take longer to materialise.”
While chief executive of the chemicals manufacturer Robert MacLeod said:
“Following a challenging first half, we recovered strongly in the second half helped by a strong recovery in our end markets and higher precious metal prices. We are delivering our efficiency programme, tightly managing working capital and generating cash from our more established businesses which we are continuing to invest for growth, particularly in battery materials and hydrogen.”
“In the year we made good strategic progress. We began entering into partnerships to advance the commercialisation of eLNO and secured new customer wins in Fuel Cells. Our investment in sustainable technologies builds on our existing expertise and will enable the transformations in transport, energy, decarbonisation of industry and a circular economy that the world needs to reach net zero – transformations that are at the heart of achieving our vision of a cleaner, healthier world for today and future generations,” MacLeod added.