(Alliance News) - Johnson Matthey PLC on Thursday said it is planning to implement cost savings, leading to job cuts, amid current market uncertainty and a 38% reduction in profit in its recently-ended financial year.
The London-based chemicals company reported pretax profit of GBP305 million for the year to the end of March compared to GBP488 million a year earlier, as it booked GBP140 million of major impairment and restructuring charges.
In addition, the company recorded a GBP60 million impact related to Covid-19. Of the Covid-19 hit, around GBP30 million reflected lower demand in Clean Air and the remainder was due to higher trade debtor provisions across the group and delayed sales due to logistical challenges in its other businesses.
"We made good progress in 2019/20 and delivered operating performance slightly ahead of market expectations, excluding the effects of Covid-19 which adversely impacted underlying operating profit," said Chief Executive Robert MacLeod.
Revenue, meanwhile, increased by 36% to GBP14.58 billion from GBP10.75 billion year-on-year, driven by higher average precious metal prices.
Sales excluding precious metals slipped by 1% to GBP4.17 billion from GBP4.21 billion the year prior.
Net finance charges grew primarily driven by increased average precious metal borrowings due to higher precious metal prices, on which Johnson Matthey said it pays higher interest on average than the rest of its borrowings.
In light of current uncertainty, Johnson Matthey proposed a final dividend of 31.125 pence, half the level of the year before. This took the total dividend for the financial year to 55.625p, down 35% from 85.5p the year prior.
"This is not intended to be a rebasing; the board remains committed to a progressive dividend and anticipates restoring future dividend payments to levels seen prior to the Covid-19 pandemic when circumstances permit," the firm stressed.
Looking ahead, the company said it is unable to provide financial guidance for its 2021 financial year.
The FTSE 100-listed company added it expects to cut around 2,500 jobs globally as part of plans to save an additional GBP80 million in costs by the end of the 2023 financial year.
"We have delivered nearly GBP120 million of our previously announced cost savings. However, we recognise the need to be even more efficient in order to maintain our competitiveness and in addition some of our end markets have been affected by Covid-19," explained MacLeod.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Johnson Matthey (JMAT)