Chemicals and metals giant Johnson Matthey boosted revenue by a huge 37 per cent today despite recording a drop in profit for its latest half-year results.
Revenue rocketed 37 per cent to £6.82bn in the six months to the end of September, but profit before tax slipped eight per cent year on year to £225m.
Operating profit also fell two per cent to £265m.
Net debt rose by a third to £1.5bn, up £452m from a year ago, owing to high spending on precious metals.
Earnings per share dragged downwards, falling 13 per cent lower than this time last year to hit 91.8p.
But Johnson Matthey still hiked its dividend five per cent to 24.5p per share on confidence of its future prospects.
Why it’s interesting
The company flagged four per cent sales growth in its clean air division, which it said was “well ahead of the decline in global vehicle production”.
It expects the division to benefit from tightening legislation in Europe and Asia, predicting mid-single digit growth until 2025.
“Heavy duty” legislation in China and India from 2020 will fuel growth in those rtegions too.
The firm expects a stronger second half of the year after booking a one-off tax provision hit, and £159m of cash outflow to boost iots precious metal working capital.
What Johnson Matthey said
Chief executive Robert MacLeod said:
We continue to execute well against our strategy and delivered first half operating performance in line with expectations. I was pleased with the continued good sales growth, demonstrating our broad based growth drivers, although operating profit was slightly down as a result of one-off costs associated with manufacturing inefficiencies in Clean Air in the first half.
We expect to deliver a stronger second half, primarily driven by the absence of the one-off costs and seasonality in Efficient Natural Resources. For the full year, we expect to deliver group operating performance in line with market expectations.
Given our clear strategy, the strong foundations we have put in place and the ongoing investment into the business for the longer term, we remain confident about the future growth prospects across all of our sectors, which will together drive mid to high single digit growth in earnings per share over the medium term. Our focus remains on executing our strategy, delivering on the ambitions that we laid out at our recent Capital Markets Day and continuing to drive towards our vision to create a cleaner, healthier world.