Johnson Matthey’s businesses performed well in the first half of 2008/09 despite the slowdown in US and Western European car markets and the fall in the price of platinum in the second quarter. The group’s balance sheet is strong with gearing (net debt / equity) falling by 1.4% to 51.2% at 30th September 2008.
Revenue rose by 24% to £4.4 billion, partly as a result of high precious metal prices in the first quarter and increased price volatility. Sales excluding the value of precious metals increased by 10% to £924 million, with good growth in all three divisions. Translated at constant exchange rates sales excluding precious metals grew by 6%.
Underlying operating profit (before amortisation of acquired intangibles) rose by 23% to £164.3 million. At constant exchange rates underlying operating profit was 19% up with most of the growth generated by Environmental Technologies Division and Precious Metal Products Division. Amortisation of acquired intangibles increased from £0.7 million in 2007 to £4.6 million in 2008 of which £4.0 million related to Argillon which was acquired in February 2008.
Interest was £7.4 million higher than last year at £19.9 million, mainly as a result of increased average borrowings. Including £0.5 million of share of profits of associates, underlying profit before tax (before amortisation of acquired intangibles) was 20% up at £144.9 million. After amortisation of acquired intangibles, profit before tax increased by 17% to £140.3 million.
Total earnings per share increased by 12% to 46.8 pence. Underlying earnings per share, which excludes amortisation of acquired intangibles and last year’s one-off benefit to deferred tax, rose by 17% to 48.4 pence.
Dividend
The interim dividend has been increased by 5% to 11.1 pence. Our long term policy is to increase dividends in line with earnings growth but for this year’s interim we have taken into account the fact that earnings growth for the full year is expected to be lower than the growth rate for the first half.
