LONDON (Alliance News) - Johnson Matthey PLC on Wednesday hiked its interim payout following a growth in profit in the first half of its current financial year, and said it expects an annual performance towards the upper end of guidance.
Johnson Matthey shares were trading 9.8% higher on Wednesday at 3,050.00 pence each, the best performer in the FTSE 100.
The specialty chemicals company said pretax profit in the six months to the end of September grew 19% to GBP244 million from GBP205 million reported for the same period a year ago.
Revenue improved 10% to GBP7.11 billion from GBP6.48 billion year-on-year, driven by continued strong growth in the Clean Air division, where sales were up 10% to GBP1.31 billion.
For the full year, the company expects the Clean Air division to deliver strong sales growth as significant share gains in European light duty diesel come through.
In the Efficient Natural Resources unit, sales improved by 1% to GBP463 million. Johnson Matthey said strong growth in refill catalysts was partly offset by lower first fill catalysts. The company expects to report around GBP7 million of savings in the full year in Efficient Natural Resources in relation to the restructuring programme started in the prior financial year.
Meanwhile, the Health division reported a 1% decline in sales to GBP118 million due to an expected reduction in both pricing and volumes of generic active pharmaceutical ingredients for a variety of treatments.
In the New Markets segment, sales jumped by 21% to GBP173 million, helped by growth in battery systems for e-bikes and continued momentum in fuel cells for non-automotive applications.
For the full financial year, however, the company expects the New Markets division's operating profit to be down, as its margin in the first half reduced by 4.5 percentage points to 1.6%. Sales are expected to continue to grow in the reminder of the financial year.
Johnson Matthey declared an interim dividend of 23.25p, up 7% year-on-year.
Looking forward, the company said it expects its annual sales and underlying operating profit to benefit from translational foreign exchange movements of GBP1 million and GBP2 million, respectively.
"We had a good half, delivering double digit sales and operating profit growth," said Chief Executive Robert MacLeod.
"We now expect full year operating performance towards the upper end of our guidance of mid to high single digit growth," added MacLeod.
Johnson Matthey (JMAT)