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Johnson Matthey Chief Gives YE Report

Published on 2003-07-17. Author : SpecialChem

Commenting on current trading at today's Annual General Meeting, Michael Miles, Chairman of Johnson Matthey, said:

"Johnson Matthey has made an encouraging start to the new financial year with first quarter earnings before exceptional items and goodwill amortisation ahead of last year despite the impact of lower palladium and rhodium prices and the weaker US dollar.

Last year's results have been restated for FRS 17, the new accounting standard for pensions, which Johnson Matthey has adopted for the current financial year. The impact of the new standard on the results for last year is set out in detail in the Annual Report.

Catalysts Division achieved strong growth in operating profit in the first quarter with Process Catalysts and Technologies benefiting from a good contribution from the former Synetix businesses acquired from ICI last November. Environmental Catalysts and Technologies profits were also up with strong demand in Asia. We have been encouraged by the increased level of governmental support for fuel cells, driven mainly by their potential to reduce global warming and increase energy security. The European Union, Japanese, US and Chinese governments have recently made very positive policy initiatives in this area and the UK is due to publish its vision for fuel cells later this summer.

Precious Metals Division's profits were below last year reflecting much lower average prices for palladium and rhodium and the continuation of subdued trading conditions for those metals. The platinum price continues to be firm with the SARS outbreak in China only having a limited impact on overall demand.

Colours & Coatings Division was ahead of last year despite weaker demand from European tile makers. Other parts of the division have started the year well with our Glass business achieving good growth and Speciality Coatings continuing to benefit from last year's rationalisation programme.

Pharmaceutical Materials Division achieved good growth in the quarter led by a strong performance at the group's US business in West Deptford, New Jersey. Good progress is also being made there towards the manufacture of morphine and codeine in the US.

Looking forward to the half year we would expect to see continued good growth in operating profit for the group, despite weak demand in some of our end markets and the impact of the fall of the US dollar. However, the group's net interest charge for the half year will also show a significant increase, partly as a result of higher average borrowings following the acquisition of Synetix, but also as a consequence of the change to FRS 17 and the reduction in the pension fund surplus at 31 March 2003. Overall we are confident that the group will achieve continued growth in earnings before exceptional items and goodwill amortisation in the half year.

The long-term prospects for Johnson Matthey remain very encouraging. We are continuing to invest in R & D and new facilities to take full advantage of the growth opportunities in Catalysts and Pharmaceutical Materials."

Source: Johnson Matthey


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