Commenting
on current trading at today’s Annual General
Meeting, Michael Miles, Chairman of Johnson Matthey,
said:
“Johnson
Matthey has made an encouraging start to the new
financial year with first quarter earnings before
exceptional items and goodwill amortisation ahead
of last year despite the impact of lower palladium
and rhodium prices and the weaker US dollar.
Last
year's results have been restated for FRS 17, the
new accounting standard for pensions, which Johnson
Matthey has adopted for the current financial year.
The impact of the new standard on the results for
last year is set out in detail in the Annual Report.
Catalysts
Division achieved strong growth in operating profit
in the first quarter with Process Catalysts and
Technologies benefiting from a good contribution
from the former Synetix businesses acquired from
ICI last November. Environmental Catalysts and
Technologies profits were also up with strong demand
in Asia. We have been encouraged by the increased
level of governmental support for fuel cells, driven
mainly by their potential to reduce global warming
and increase energy security. The European Union,
Japanese, US and Chinese governments have recently
made very positive policy initiatives in this area
and the UK is due to publish its vision for fuel
cells later this summer.
Precious
Metals Division’s profits were below last
year reflecting much lower average prices for palladium
and rhodium and the continuation of subdued trading
conditions for those metals. The platinum price
continues to be firm with the SARS outbreak in
China only having a limited impact on overall demand.
Colours & Coatings
Division was ahead of last year despite weaker
demand from European tile makers. Other parts of
the division have started the year well with our
Glass business achieving good growth and Speciality
Coatings continuing to benefit from last year's
rationalisation programme.
Pharmaceutical
Materials Division achieved good growth in the
quarter led by a strong performance at the group's
US business in West Deptford, New Jersey. Good
progress is also being made there towards the manufacture
of morphine and codeine in the US.
Looking
forward to the half year we would expect to see
continued good growth in operating profit for the
group, despite weak demand in some of our end markets
and the impact of the fall of the US dollar. However,
the group's net interest charge for the half year
will also show a significant increase, partly as
a result of higher average borrowings following
the acquisition of Synetix, but also as a consequence
of the change to FRS 17 and the reduction in the
pension fund surplus at 31 March 2003. Overall
we are confident that the group will achieve continued
growth in earnings before exceptional items and
goodwill amortisation in the half year.
The
long-term prospects for Johnson Matthey remain
very encouraging. We are continuing to invest in
R & D and new facilities to take full advantage
of the growth opportunities in Catalysts and Pharmaceutical
Materials."
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