British specialty chemicals and precious metals group Johnson Matthey Plc (JMAT.L) reported Thursday a 16% rise in its fiscal 2008 pre-tax profit on rising precious metal prices and strong underlying volume growth. However, the total profit for the year declined in the absence of a one-time gain recorded last year from the disposal of Ceramics division. Johnson Matthey said it sees strong progress in the upcoming year regardless of concerns about the state of the world economy and the slowdown in the U.S.
The company's profit before tax rose to 262.3 million pounds from 226.5 million pounds a year earlier.
Annual profit from continuing operations reached 185.1 million pounds or 86.9 pence per share, up from 161.8 million pounds or 75.3 pence per share last year. Profit from discontinued operations dropped sharply to 0.3 million pounds from 43.7 million pounds a year ago, which included profit on sale of Ceramics division. On February 28, 2007, the group sold its Ceramics Division to the Endeka Ceramics group for 43.9 million pounds.
For the year, profit attributable to equity holders declined to 186.2 million pounds or 87.1 pence per share from 206.5 million pounds or 95.4 pence per share in the previous year.
Operating profit came in at 293.7 million pounds, up from 252.4 million pounds in the previous year.
Sales revenue grew 22% to 7.50 billion pounds from last year's 6.15 billion pounds, on the back of good underlying volume growth and strongly rising precious metal prices.
Excluding precious metals, sales rose 20% to 1.75 billion pound, with outstanding organic growth in all its three divisions.
During the year, the company achieved strong growth in the sales of heavy-duty diesel catalysts and diesel particulate filters in Europe and North America. The firm also realized solid growth in Asia, particularly in China, both for emission control catalysts and process catalysts.
Division wise, Environmental Technologies division, comprising Emission Control Technologies, Process Technologies and Fuel Cells, recorded 23% growth in revenues to 2.29 billion pounds for the year. Excluding precious metals, Emission Control Technologies' sales grew 32% to 903 million pounds with continued strong demand for catalysts. Process Technologies' sales excluding precious metals rose 10% mainly on strong ammonia, methanol, oil and gas, or AMOG, business.
Revenue from Precious Metal Products segment increased to 5.86 billion from 4.99 billion pounds a year earlier, fueled by higher prices for platinum group metals. In sterling terms the average price of platinum rose 20%.
In addition, Johnson Matthey said its board proposed a final dividend of 26.0 pence, which will be paid on August 5, to shareholders on the register at the close of business on June 13. This brings the total dividend for the year to 36.6 pence, a 9% increase over last year.
Moving ahead, Johnson Matthey said it anticipates achieving strong growth in fiscal 2009, though it is not immune to the effects of a recession. According to the company, Emission Control Technologies business will continue to deliver double digit growth in sales and profit in the up coming year, helped by improved demand for diesel particulate filters in Europe and autocatalysts in Asia, as well as strong sales of heavy duty diesel catalysts. Meanwhile, favorable conditions in the platinum group metals markets will aid Precious Metal Products division to show improved performance in the year.
JMAT.L is currently trading on the LSE at 2,003 pence, down 36 pence or 1.77%, on a volume of 234K shares.
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