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LONDON (Alliance News) - Johnson Matthey PLC said Wednesday that its guidance for the full-year remains unchanged, despite reporting a drop in pretax profit in its first quarter and the further strengthening of sterling.
In an interim management statement released ahead of its annual general meeting Wednesday Johnson Matthey said pretax profit declined 10% during the quarter to June 30, coming in at GBP95.0 million, compared to the GBP106.09 million recorded in 2013. Operating profit also fell, down 11% to GBP103.6 million from GBP116.1 million last year.
While growth in Emission Control Technologies was offset by the expected softening in Process Technologies and Precious Metal Products, sales, excluding precious metals, during the quarter were flat at GBP749 million, compared to GBP745 million last year, said the company.
Johnson Matthey said the impact of adverse foreign exchange movements amounts to approximately GBP50 million. Excluding this, and the loss of around GBP10 million in commission income from Anglo Platinum, the company said sales rose 9%.
On a divisional basis, Emission Control Technologies saw sales rise 44% to GBP444 million compared to GBP404 million last year. Process Technologies had a softer first quarter as a result of the timing of new projects and catalyst orders in its Chemicals businesses, said Johnson Matthey, with sales down 17% to GBP119 million from GBP144 million. Fine Chemicals' sales were broadly in line at GBP78 million, compared to GBP81 million reported last year and New Businesses sales were steady at GBP18 million from GBP20 million in 2013.
The performance of Precious Metal Products in the first quarter was impacted by around GBP10 million as a result of the change in the company's Anglo Platinum contracts. Overall, sales in the division fell by 8% to GBP101 million, down from GBP110 million the previous year, underlying operating profit also reduced, said the company.
Looking ahead the company said that it expects the group's full-year performance to be in line with the previous year and that demand for its products remains robust. In a statement ahead of the meeting Wednesday, Chairman Tim Stevenson added that continued growth across the group will be "offset by the adverse impact of both the loss of commission revenue from Anglo Platinum, approximately GBP30 million compared with 2013/14, and by the effect of foreign currency translation, which could reduce reported underlying operating profit by over GBP25 million if current rates prevail."
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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