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".