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Johnson Matthey sees muted underlying profit growth although cost-cutting helps boost headline numbers

The FTSE 100-listed firm - a world leader in making catalytic convertors for vehicles – posted a 19% rise in statutory full-year pretax profit to £461.6mln, up from £386.3mln a year earlier, but underlying pretax profit growth at constant currency was just 1%

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In early morning trading, Johnson Matthey shares were 2.8%, or 86p lower at 3,026p

Precious metals processor Johnson Matthey PLC (LON:JMAT) saw a restructuring and cost-cutting programme help it report solid growth in headline 2016/2017 profits and revenue, but its underlying growth was more muted and shares fell in response.

For the year ended March 1, the FTSE 100-listed firm - a world leader in making catalytic convertors for vehicles – posted a 19% rise in statutory pretax profit to £461.6mln, up from £386.3mln a year earlier, but underlying pretax profit growth at constant currency was just 1%.

Johnson Matthey saw its full revenue increase by 12% to £12.031bn, up from £10.714bn a year earlier, although underlying sales growth, excluding precious metals, was only 3% at constant currencies.

In early morning trading, Johnson Matthey shares were 2.8%, or 86p lower at 3,026p.

2017/18 sales growth to be broadly in line with second half performance

Robert MacLeod, Johnson Matthey’s chief executive, said: “For the full year 2017/18, sales growth, at constant rates, is expected to be broadly in line with the 6% growth delivered in the second half of this year.”

He added: “Improving operating performance at constant rates, with stronger sales growth and further efficiency savings, is expected to be offset as there will be no US post-retirement medical benefit credit and there are higher non cash pension charges in 2017/18.

“At current exchange rates, reported results in 2017/18 will benefit from the positive impact of translational foreign exchange.”

The group is proposing a final dividend of 54.5p per share, up 5% on a year earlier, giving a total payout for the year of 75.0p, which it said reflected "confidence in the group's medium-term prospects".

Quick facts: Johnson Matthey PLC

Price: 2114 GBX

LSE:JMAT
Market: LSE
Market Cap: £40.52 m
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