Shares up at FTSE 100-listed Johnson Matthey despite profit hit

European Commission Announced New CO2 Targets For Cars
Catalytic converter-maker Johnson Matthey gets share price boost despite profit hit (Source: Getty)

Shares rose today at Johnson Matthey despite the company revealing that pre-tax profit fell by nearly a third.

Pre-tax profit at the FTSE 100 company, which makes catalytic converters for cars, fell by 31 per cent.

The company blamed this on £90m of costs related to its restructuring programme and a £50m charge to settle a legal dispute with a US car manufacturer.

Read more: Power up: Johnson Matthey soars on plans to invest £200m in battery unit

In the year to 31 March revenue grew by 17 per cent from £12.031bn to £14.122bn. Underlying revenue rose by eight per cent to £3.85bn and underlying pre-tax profit increased one per cent to £486m.

The company also boosted its final divided by seven per cent to 80p.

Despite the profit hit shares rose by 2.5 per cent as the market backed the company’s longer term prospects and its increased focus on electric car batteries.

Head of markets at interactive investor Richard Hunter said: “The company is well positioned at the moment. The clean air division, which accounts for 64 per cent of sales, continues to benefit via its catalytic converter expertise as emissions become even more of a focus for governments worldwide.

"Meanwhile, the new markets arm, whilst only currently contributing to eight per cent of sales, is home to its electric car battery development. Here, a significant shift towards electric cars could well benefit the company.”

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