LONDON (Alliance News) - Johnson Matthey PLC on Thursday upped its annual payout following a sharp increase in profit, thanks to the cost savings and positive performance across all of its units.
The speciality chemicals company reported 53% growth in pretax profit to GBP488 million in the financial year that ended on March 31 compared to GBP320 million reported the year earlier, as revenue rose 4.6% to GBP10.75 billion from GBP10.27 billion.
Profit was slightly short of market expectations. According to company-compiled consensus figures for financial 2019, pretax profit was expected to jump 56% to GBP500.7 million.
In financial 2018, the FTSE 100-listed company recognised a major impairment and restructuring charge of GBP90 million, as well as a legal settlement of GBP50 million.
Meanwhile, in financial 2019, Johnson Matthey recorded GBP24 million savings, thanks to its restructuring programme, which is now "substantially complete". In addition, the closure of its manufacturing plant in Riverside, California, delivered GBP15 million of savings in financial 2019, it said.
By division, Johnson Matthey said it saw a continued sales growth in Clean Air unit, where it also achieved its "planned" market share of 65% in European light duty diesel compared to the 45% it had a year prior. Sector sales grew 11% to GBP1.74 billion, "well" ahead of the decline in global vehicle production, the company said, driven by double-digit growth in both light and heavy duty catalysts.
In the Efficient Natural Resources division, sales improved by 4% during the year to GBP991 million, driven by higher average precious metal prices.
In the Health segment, sales were up 3% to GBP257 million, while the New Markets unit saw "strong" sales growth to GBP362 million from GBP312 million as Johnson Matthey recently secured a site in Poland for its first commercial plant as well as its first long-term supply agreement for raw materials with Nemaska Lithium.
Johnson Matthey declared a final dividend of 62.25 pence a share, taking the total payout for the year to 85.5p, up 6.9% from 80.0p paid the year before.
"We had another good year with strong sales and operating profit growth, as we progress our strategy to deliver our vision for a cleaner, healthier world," said Chief Executive Robert MacLeod.
Looking ahead, Johnson Matthey said it expects foreign exchange movements in the financial year to the end of March 2020 to hurt sales and underlying operating profit by GBP6 million and GBP2 million, respectively.
"For 2019-20, we expect growth in operating performance at constant rates to be within our medium term guidance of mid to high single-digit growth," added MacLeod.
Johnson Matthey (JMAT)