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(Alliance News) - Johnson Matthey on Wednesday sought to placate investors disappointed by its surprise decision to exit its Battery Materials business, for which the FTSE 100 firm had once held out so much hope.
The speciality chemicals company said it has approved a GBP200 million share buyback, after sales in the first half of its financial year benefited from higher average precious metal prices.
Johnson Matthey sank to a pretax loss of GBP9 million in the six months to September 30, compared to a profit of GBP26 million a year earlier. Johnson booked GBP314 million in major impairment and restructuring charges in the period, sharply higher from GBP78 million a year before - largely attributed to its intention to exit Battery Materials.
Revenue surged 23% to GBP8.59 billion from GBP6.98 billion, with sales excluding precious metals 15% higher to GBP1.94 billion from GBP1.68 billion.
Johnson has declared an interim dividend of 22.0 pence, up 10% from 20.0p a year earlier, and it has approved a GBP200 million share buyback - expected to start in 2022.
"We delivered a resilient trading performance in what has been a challenging environment, given the supply chain volatility which has affected a number of our end markets," outgoing Chief Executive Robert MacLeod said.
MacLeod is set to be replaced by Liam Condon, joining from German's Bayer.
Separately, Johnson said on Wednesday it has agreed to sell its Advanced Glass Technologies business to Fenzi Holdings SPV SpA for GBP178 million on a cash-free debt-free basis.
Two weeks back Johnson Matthey said it had concluded that the potential returns from its Battery Materials business would not "be adequate to justify further investment", while also announcing MacLeod's departure. The stock dropped 19% that day.
Johnson Matthey shares were up 0.3% early Wednesday. The stock is down 9.7% so far in 2021.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.4% at 7,296.85
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Hang Seng: up 0.1% at 24,685.50
Nikkei 225: closed down 1.6% at 29,302.66
S&P/ASX 200: closed down 0.2% at 7,399.40
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DJIA: closed up 194.55 points, or 0.6%, at 35,813.80
S&P 500: closed up 0.2% at 4,690.70
Nasdaq Composite: closed down 0.5% at 15,775.14
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EUR: down at USD1.1246 (USD1.1262)
GBP: up at USD1.3377 (USD1.3363)
USD: soft at JPY114.90 (JPY114.96)
Gold: up at USD1,793.40 per ounce (USD1,784.01)
Oil (Brent): up at USD82.42 a barrel (USD81.49)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's key economic events still to come
1000 CET Germany Ifo business climate index
1100 GMT UK CBI industrial trends survey
0700 EST US MBA weekly mortgage applications survey
0830 EST US trade balance
0830 EST US durable goods orders
0830 EST US 2nd estimate GDP
0830 EST US jobless claims
1000 EST US University of Michigan survey of consumers
1000 EST US new residential sales
1000 EST US personal income & outlays
1030 EST US EIA weekly petroleum status report
1200 EST US EIA weekly natural gas storage report
1400 EST US Federal Open Market Committee meeting minutes
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Taiwan thanked US President Joe Biden for his invitation to a democracy summit, saying the event would allow the self-ruled island to show off its credentials on the world stage. "Through this summit, Taiwan can share its democratic success story," Presidential Office spokesman Xavier Chang said in a statement to reporters. In response, China, which wasn't invited, said it was "firmly opposed" to Taiwan joining the US-led event. The conference was a campaign pledge by Biden, who has placed the struggle between democracies and "autocratic governments" at the heart of his foreign policy. The 'Summit for Democracy' will take place online on December 9 and 10 ahead of an in-person meeting at its second edition next year. The meeting was long advertised, but the guest list – published Tuesday on the State Department's website – will be closely scrutinized. Russia also wasn't invited.
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BROKER RATING CHANGES
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BARCLAYS RAISES HOCHSCHILD MINING TO 'OVERWEIGHT' (EQUAL-WEIGHT) - TARGET 165 (185) PENCE
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JPMORGAN RAISES DELIVEROO TO 'OVERWEIGHT' (NEUTRAL) - PRICE TARGET 392 (333) PENCE
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JPMORGAN RAISES JUST EAT TAKEAWAY.COM TO 'OVERWEIGHT' (NEUTRAL) - PRICE TARGET 8,632 (8,695) EUR
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COMPANIES - FTSE 100
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Water works United Utilities said it has continued its "great" progress with profit aided by its digital transformation and investment in long-term sustainable performance. In the six months to September 30, pretax profit improved 5.8% to GBP212.7 million from GBP201.1 million a year before. Revenue in the first half rose 4.2% to GBP932.3 million from GBP894.4 million. United Utilities noted it has reduced typical water bills for households by 6%. United declared an interim dividend of 14.50 pence, up 0.6% from 14.41p a year before. Chief Executive Steve Mogford said: "We've continued with the great start that we've made to AMP7, benefiting from the acceleration of our capital programme and investment in Systems Thinking. Our strong operational performance delivers efficiency gains and improvements to outcome delivery incentives, and is enabling us to drive further value for our shareholders."
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Quality assurance provider Intertek said it has made "strong progress" so far in the second half of 2021. Revenue rose by 4.8% in July and August, picking up to 8.5% in September and October. Like-for-like revenue growth in July to October was 5.0%, 6.2% when adjusted for trading days. Intertek said it is on track for "robust LFL revenue growth" in 2021.
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COMPANIES - FTSE 250
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Soft drinks maker Britvic said its trading has recovered "strongly" from a first half that was battered by the pandemic and pointed to encouraging trading with volumes in first six weeks of the new financial year ahead of financial 2021 and 2020. In the year to September 30, pretax profit increased to GBP142.9 million from GBP111.2 million. Revenue was flat on a year before at GBP1.41 billion. The constrained full-year revenue was blamed on a poor first-half performance that saw Britvic's Out-of-Home business take a hit from the UK lockdowns. Britvic declared an annual dividend of 24.2 pence, up from 21.6p the year before. Chief Executive Simon Litherland said: "This year we have recovered strongly from the effects of the pandemic, with underlying revenue, margin, and profit all in growth. Our disciplined cash management enabled us to pay down debt and to increase our dividend by 12.0%, reflecting our confidence in the business."
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COMPANIES - MAIN MARKET AND AIM
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Luxury fashion designer Mulberry swung to a profit in the first half of its financial year, with trading returning to pre-Covid levels. "Sales in the UK recovered strongly once our stores re-opened. The sales lost from the absence of tourists in the UK and the rationalisation of stores in Europe were replaced by strong growth in Asia," the handbag maker explained. Pretax profit in the 26 weeks to September 25 improved to GBP10.2 million versus a GBP2.4 million loss a year before, as revenue surged to GBP65.7 million from GBP48.9 million. Mulberry noted its retail revenue in the 8 weeks to November 20 increased 35% compared to the same period last year.
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COMPANIES - GLOBAL
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German discount supermarket Lidl has revealed its attempts to dominate large swathes of UK high streets will continue at pace with the creation of 4,000 new jobs over the next three years. Bosses said they expect to reach their target of having 1,000 stores by 2023 and set a new ambition for 1,100 sites by 2025. The move comes as the grocer published its accounts for the year to end of February at Companies House, showing how it benefited during the pandemic from is position as an "essential" retailer. Sales jumped 12% to GBP7.7 billion and pretax profit hit GBP9.8 million after a GBP25.2 million loss a year earlier, according to the accounts. Lidl is privately owned, meaning it does not need to publish more up-to-date sales data. Alongside the numbers, bosses said they opened 55 stores during the first year of the pandemic and spent GBP17.5 million on boosting staff pay, including GBP8 million on hourly wage hikes and GBP9.5 million on bonuses during the Covid-19 crisis.
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Wednesday's shareholder meetings
Clinigen Group PLC - AGM
CVS Group PLC - AGM
Darktrace PLC - AGM
European Metals Holdings Ltd - AGM
Genus PLC - AGM
MGC Pharmaceuticals Ltd - AGM
Norish PLC - GM re capital return payment
Oxford Cannabinoid Technologies Holdings PLC - AGM
Prairie Mining Ltd - AGM
Renishaw PLC - AGM
Supermarket Income REIT PLC - AGM
Tlou Energy Ltd - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
