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Johnson Matthey profit falls but dividend rises

Chemical and catalytic converter maker said pre-tax profits in the year to March 31 fell 5% to £418.2mln

Car exhaust
Johnson Matthey said its emission control technology division had a strong year

Chemical group Johnson Matthey PLC (LON:JMAT) reported lower profits but increased sales and its dividend.

The group, which makes catalytic converters for cars as well as other activities such as platinum refining and recycling, said underlying pre-tax profits in the year to March 31 fell 5% to £418.2mln.

But revenue increased 7% to £10.7bn and the group boosted its dividend per share by 5% to 71.5p.

It said its emission control technology division had a strong year with sales up 7% and underlying operating profit rising 15%.

Full implementation of new European emission legislation for light duty diesel vehicles and a recovery in western European truck production drove strong growth in Europe.

But the group’s process technology arm had a difficult year, with sales down 8% and underlying operating profit falling 31%.

Chemicals businesses faced lower licensing income and slightly weaker catalyst sales.

Catalyst sales in oil and gas businesses were steady but lower oil prices hit diagnostic services.

Elsewhere, the company’s precious metal product division had a tough year with sales down 8% and underlying operating profit lower by a quarter.

Lower platinum group metal (PGM) prices hit performance in Johnson’s PGM refining and recycling business.

But its fine chemical business made steady progress, with sales up 3% and underlying operating profit rising 1%.

Chief executive Robert MacLeod said: "Johnson Matthey has delivered a robust performance overall in a year where conditions have been particularly tough in some of our markets.

“The group's performance was adversely impacted by the challenging conditions in some of our other business areas and we have restructured our business; results in 2016/17 will benefit from those actions.

“Looking ahead to 2016/17, we expect performance to be ahead of 2015/16 and in line with current market expectations.”

Shares in Johnson rose 41p, or 1.45%, to 2868p.

Quick facts: Johnson Matthey PLC

Price: 2090 GBX

LSE:JMAT
Market: LSE
Market Cap: £4.04 billion
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