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(Alliance News) - Johnson Matthey on Thursday said it is determined to "restore value to our shareholders" after recent changes in direction sent shares tumbling.
The London-based specialty chemicals firm reported an annual revenue increase but profit came under pressure. Results for the financial year that ended March 31 were in line with expectations, however.
Revenue climbed 3.8% to GBP16.03 billion from GBP15.44 billion. Pretax profit fell 13% to GBP195 million GBP224 million.
The company posted "major impairments and restructuring" costs of GBP440 million, up sharply from GBP154 million. It noted GBP325 million of these costs stemmed from the sale of its Battery Materials business.
Johnson Matthey upped its payout by 10% to 77.0 pence from 70.0p. The one-time FTSE 100 constituent said it was a "very challenging year".
"We took important and necessary strategic decisions with the business portfolio, with the exit from Battery Materials and divestment of Health. I know many of our stakeholders were very disappointed, but these were essential actions to enable us to focus on attractive, high growth opportunities that have a vital role to play in the acceleration towards net zero. I, the rest of the board and the executive team are determined that we will restore value to our shareholders," Chair Patrick Thomas said.
The company set out a series of strategic objectives on Thursday, hailing its platinum group metals services arm as its "backbone". It also targets GBP150 million of cost savings by financial 2025.
A leaner Johnson Matthey will focus on "four businesses enabling the automotive, chemical and energy industries transition to net zero".
On Wednesday, Johnson Matthey said it had invested EUR20 million to take a 4.3% stake in Enapter, as part of a collaboration on Enapter's technology that produces green hydrogen. Enapter is a German and Italian firm whose anion exchange membrane electrolyser extracts hydrogen from water to be used in power generation.
On Tuesday, FTSE Russell had said Johnson Matthey is indicated to return to the FTSE 100 in the quarterly review next month.
Johnson Matthey shares were down 5.4% early Thursday. The stock is down 29% in the past 12 months.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: marginally lower, down 2.95 points at 7,519.80
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Hang Seng: down 0.5% at 20,069.68
Nikkei 225: closed down 0.3% at 26,604.84
S&P/ASX 200: closed down 0.7% at 7,105.90
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DJIA: closed up 191.66 points, or 0.6%, at 32,120.28
S&P 500: closed up 37.25 points, or 1.0%, at 3,978.73
Nasdaq Composite: closed up 170.29 points, or 1.5%, at 11,434.74
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EUR: unchanged at USD1.0678
GBP: up at USD1.2567 (USD1.2547)
USD: down at JPY126.99 (JPY127.31)
Gold: down at USD1,847.92 per ounce (USD1,850.30)
Oil (Brent): up at USD114.55 a barrel (USD113.93)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's key economic events still to come
0830 EDT US unemployment insurance weekly claims report
0830 EDT US gross domestic product
1000 EDT US pending home sales index
1030 EDT US EIA weekly natural gas storage report
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The global shortage of semi-conductors and the impact of the war in Ukraine led to a "volatile" April for the UK car industry, with production down by over a tenth compared with the same month last year. A total of 60,554 cars were built, 11% fewer than last April, according to figures from the Society of Motor Manufacturers & Traders. Other issues included vehicle model changes and broader industry structural changes, said the organisation. Production for overseas markets fell by 21%, driven by a 68% decline in shipments to the US and a 10% drop to Asia. Three out of five cars exported from the UK last month headed to the EU, representing a 5% increase in shipments, while production for the UK grew for the second month in a row, up by 60%.
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BROKER RATING CHANGES
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Citigroup raises PageGroup to 'buy' (neutral) - price target 600 pence
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Berenberg starts FirstGroup with 'buy' - price target 150 pence
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COMPANIES - FTSE 100
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BT said the UK government is probing a recent investment in the telecommunications operator on national security grounds. In December, billionaire telecom tycoon Patrick Drahi's Altice lifted its stake in BT to 18% from 12% previously. The transaction has been referred to the UK's National Security & Investment Act 2021. "BT Group will fully cooperate with this review," the company said.
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Auto Trader reported an annual earnings rise and anticipates more growth ahead. It also expects its margins to withstand inflationary pressure. In the year ended March 31, the vehicle marketplace reported a 65% revenue hike to GBP432.7 million from GBP262.8 million. Compared to financial 2020, largely pre-pandemic, revenue increased 17% from GBP368.9 million. The chunkier year-on-year revenue rise stemmed from an easier comparative. Auto Trader noted it provided free advertising to retailer customers in April 2020, May 2020, December 2020 and February 2021 amid the Covid-19 pandemic. It also had provided a discounted rate in June 2020. Auto Trader's pretax profit jumped 91% to GBP301.0 million from GBP157.4 million. It was up 20% from financial 2020's GBP251.5 million. The company's annual payout totalled 8.2 pence per share, up 64% from 5.0p.
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JD Sports Fashion late Wednesday said Peter Cowgill has stepped down as executive chair with immediate effect following long-standing corporate governance issues that have dogged the retailer. JD Sports said that as a result of an ongoing review of its internal governance and controls it has decided to "accelerate the separation" of the roles of chair and chief executive officer. The athletic apparel retailer said non-executive directors Helen Ashton and Kath Smith will assume the roles of interim non-executive chair & interim chief executive officer, respectively. JD said the process to recruit a CEO continues, and it now will begin the search for a new non-executive chair.
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COMPANIES - FTSE 250
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Retail investment platform AJ Bell delivered a "solid performance" in its half year ended March, despite tough comparatives. Revenue climbed 2.2% year-on-year to GBP75.5 million from GBP73.9 million, though pretax profit fell 17% to GBP26.1 million from GBP31.6 million. "This is a very good result against a significantly more challenging market backdrop to that experienced in the first half of last year, when retail investor engagement and dealing activity was exceptionally high particularly in the direct-to-consumer market," Chief Executive Andy Bell said. Assets under management increased to GBP74.1 billion from GBP72.8 billion at financial year end. Inflows amounted to GBP5.5 billion, while outflows came to GBP2.7 billion. It saw a GBP1.5 billion hit from market movements. AJ Bell lifted its payout by 13% to 2.78p per share from 2.46p. Looking ahead, the company expects a "significant benefit" from a "higher interest rate environment".
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Outsourcer Serco lifted its financial guidance in an impromptu trading update. In the first four months of 2022, Serco has seen "stronger than expected trading" and favourable foreign exchange movements. It now expects underlying trading profit at actual currency rates of GBP225 million, up about GBP30 million from prior guidance and with favourable currency movement contributing GBP10 million of that. This result would represent a 1.7% reduction from GBP229 million in 2021.
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Carnival late Wednesday said it has closed its private offering of USD1.00 billion for the aggregate principal amount of 10.5% senior unsecured notes due in 2030. The Miami, Florida-based cruise ship operator said that net proceeds from the notes will go towards making scheduled payments on debt during its 2023 financial year, as well as general corporate purposes, including rental payments and maintenance of cruise ships. The senior notes will pay interest semi-annually at the start of June and December of each year, at a rate of 10.5% until June 2025, after which it will be callable.
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COMPANIES - GLOBAL
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Westpac Banking has offloaded the superannuation funds of wealth management arm BT to Marsh & McLennan subsidiary Mercer. BT will merge its Personal and Corporate superannuation funds into the Mercer Super Trust to create a AUD65 billion, about USD46 billion, superannuation fund. The deal covers funds including BT Super and BT Super for Life. The merger does not include superannuation funds held on Westpac's BT Panorama and Asgard platforms. Westpac says the move will lead to a "stronger performance" for the funds. Westpac also will sell its Advance Asset Management business to Mercer Australia. Advance had AUD43.7 billion in funds under management at the end of March and manages a number of products available through BT Panorama.
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Thursday's shareholder meetings
Aminex PLC - AGM
Bank of Ireland Group PLC - AGM
Belvoir Group PLC - AGM
Central Asia Metals PLC - AGM
Curtis Banks Group PLC - AGM
Diaceutics PLC - AGM
Duke Royalty Ltd - EGM re fundraise
East Star Resources PLC - AGM
Energean PLC - AGM
Henry Boot PLC - AGM
Hochschild Mining PLC - AGM
Legal & General Group PLC - AGM
National World PLC - AGM
Ocean Wilsons Holdings Ltd - AGM
OnTheMarket PLC - GM re cancellation of capital
Prudential PLC - AGM
S&U PLC - AGM
Staffline Group PLC - AGM
Strix Group PLC - AGM
WAG Payment Solutions PLC - AGM
Yu Group PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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