I am pleased to report that
2001/02 was another year of solid growth for Johnson Matthey in the
face of challenging market conditions and uncertainty in the world’s
leading economies.
Earnings per share before exceptional
items and goodwill amortisation grew by 6%. We are recommending a final
dividend of 17.1 pence, which will take the dividend for the year to 24.6
pence, also 6% up.
In
line with the board’s strategy, we have continued to invest heavily
in new production technology particularly in our Catalytic Systems business,
which enabled us to gain market share. We also stepped up our investment
in research and development, particularly in fuel cells. The additions
of Pharm-Eco Laboratories, Inc. and Meconic plc have enabled us to separate
out Pharmaceutical Materials as a stand alone division which has enjoyed
an excellent first year. The purchase of Avocado Research Chemicals Limited
has added to our rapidly growing Chemicals Catalogue operation, which
is part of our Chemicals business.
Our
world leading Precious Metals Division performed very well achieving profits
close to last year despite a significant drop in precious metal prices.
Colours & Coatings faced some of the biggest challenges with a sharp
fall in demand from the Tableware sector. Decisive action has been taken
to reduce costs with the closure of a major site.
The
board’s strategy of investing in research and development and new
manufacturing processes has underpinned the company’s success in
recent years. However, Johnson Matthey’s most important investment
is in developing our people to enable us to meet the challenges of the
future. We focus on this key objective at all levels of the company. Our
Training and Development of People Policy is set out on page 24 of this
annual report. Johnson Matthey has a most professional and dedicated workforce.
On behalf of the board I would like to thank all of them for their contribution
during the year.
The
company has a strong group of independent directors and is most fortunate
to have the benefit of their knowledge and experience. Pat Retief retired
from the board at the end of September 2001. During the eight years that
Pat served as a non-executive director of Johnson Matthey his experience
of international business and particularly the platinum group metals industry
has been of great value to the board. Harry Fitzgibbons has decided to
retire from the board at the conclusion of this year’s Annual General
Meeting. Harry has been a non-executive director since 1990 and during
that time his business acumen and extensive knowledge of emerging technologies
have been extremely helpful to the company. I would personally like to
thank Pat and Harry most sincerely for their invaluable input. Ian Strachan
joined the board as a non-executive director in January 2002. He has a
strong international background in a wide range of industrial sectors.
In
April the company announced that Graham Titcombe is to retire on 24th
September 2002 after 42 years service, including 12 years as a main board
director. During that time he has managed all of the group’s major
businesses. Graham’s extensive experience of the company and its
operations, along with his encyclopaedic knowledge of the precious metals
industry and particularly the platinum group metals have been of immense
value to Johnson Matthey. He has also been a much respected ambassador
for the industry through his commitment to a wide range of international
bodies such as the International Platinum Association, the World Fuel
Cell Council, Eurometaux and the South African Business Council. On behalf
of the whole board I would like to thank Graham for the very important
role that he has played in the development and success of Johnson Matthey
and wish him all the best for a well deserved, long and happy retirement.
In
preparation for Graham’s retirement, with effect from 1st August
2002, Neil Carson will take over board level responsibility for Precious
Metals Division in addition to his current responsibility for Catalysts
& Chemicals Division, and David Morgan will assume board responsibility
for Colours & Coatings Division and the company’s central research
activities.
In
May, our Chief Executive, Chris Clark, received the Society of Chemical
Industry (SCI) 2002 Centenary Medal. This prestigious award was established
in 1981 to commemorate SCI’s first 100 years and is presented annually
to acknowledge figures of distinction in science based industry or commerce.
Chris is the 20th recipient of the SCI Centenary Medal and joins a distinguished
roll of winners including Sir Richard Sykes of Imperial College, Jürgen
Strube of BASF and Sir John Harvey-Jones.
Ultimately,
the success of Johnson Matthey depends on our ability to deliver shareholder
value. The last few years have seen good progress towards achieving this.
Looking to the future, our talented staff and our continued emphasis on
their professional development as well as our commitment to investment
will enable us to continue to deliver growth and value to our shareholders.
