Johnson Matthey profit slides but dividend raised by 7%

Taking a look at what the Johnson Matthey results mean for investors

Article updated: 31 May 2018 10:00am Author: Ian Forrest

  • The FTSE 100-listed chemicals company enjoyed a rise in its full year sales on a constant exchange rate basis
  • While profits slightly dipped, the group has hiked its dividend, reflecting confidence in the outlook
  • The Share Centre recommends Johnson Matthey as a ‘hold’ for investors seeking a balanced portfolio with a medium level of risk

Chemicals and precious metals group Johnson Matthey this morning reported a 7% rise in underlying full year sales at constant exchange rates to £3.8bn, which was slightly ahead of expectations. Pre-tax profit dropped 1% to £486m but the dividend was raised 7% and the company said it expects mid to high single digit growth in operating performance in the new financial year.

The Clean Air business saw the best growth within the group with sales up 9% and the company revealed that it has made significant progress with the development of its new lithium nickel oxide battery technology. The latter is aimed at the electric vehicle market and could increase performance levels by 30%.

The results were well received and the shares rose 2% in early trading. They have already outperformed the market this year and are trading near to their all-time high. While the results show a solid performance and prospects appear good the shares do not appear especially good value so we continue with our hold recommendation.

All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

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Ian Forrest

Investment Research Analyst

Ian’s background in investments, financial journalism and research has seen him advising private investors on equities and helping to manage portfolios. His qualifications include the Certificate in Financial Planning and the Chartered Institute for Securities & Investment’s Investment Advice Diploma.