- Revenue falls 11% to £6.5 billion
- Maintains dividend of 22p per share
- Expects high-single digit growth for next year
Shares in Johnson Matthey (JMAT) were up over 2% to £14.93 in morning trading as the chemicals company raised its full year underlying operating performance despite reporting a 11% fall in revenue to £6.5 billion for the six months ending 30 September.
Continuing pre-tax profit fell 56% to £82 million compared with £188 million in the same period a year ago due to lower average precious metal prices and higher net finance charges.
Chief executive Liam Condon said: ‘Whilst precious metal prices have stabilised recently, it remains difficult to predict how they may develop. To illustrate the impact, they may have on our results, assuming prices remain at their current level for the remainder of 2023/24 there would be an adverse impact of circa £80 million on full year operating performance.’
The chemicals company however delivered some good news in relation to its outlook for the year ending 31 March 2024 which has improved.
‘We now expect at least high single digit growth in operating performance at constant precious metal prices,’ the company said.
Johnson Matthey also said it was on track to deliver in excess of £150 million annualised savings by the end of 2024/25, however it would incur a £17 million charge associated with restructuring.
DELIVERING STRATEGIC MILESTONES
The chemicals company said it was making good progress with its Clean Air and Catalyst Technologies divisions.
Clean Air underlying profitability improved and it won nine large scale projects in Catalyst Technologies across low carbon hydrogen and sustainable fuels, worth circa £185 million in sales over five years.
Hydrogen Technologies sales were also up 61%.
Johnson Matthey maintained its interim dividend of 22p per share the same level as last year.
Numis analyst Kevin Fogarty said in a research note: ‘On our current estimates, the shares now trade on a full year 2024 enterprise value to EDITDA (earnings before interest, tax, depreciation, and amortisation) multiple of 6.2x and a prospective P/E multiple of 10.2x, which are attractive.
‘While the Johnson Matthey value creation process remains dependent on management delivery during the quarters ahead, our updated sum-of-parts analysis to reflect current peer valuation metrics, continues to support our view that the shares continue to look undervalued.’
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