British platinum distributor and processor Johnson Matthey beat forecasts with a 16 percent rise in annual profit on Thursday, driven by environmental legislation to cut emissions and high metal prices, and said it expects to achieve good growth in 2008/09.
Underlying pretax profit increased to 265.4 million pounds ($517.4 million) in the year to end ended March, compared with 229.3 million pounds the year before and an average forecast of 258.7 million pounds in a company poll of 11 analysts.
The world's biggest distributor of platinum, which uses the metal to make ingredients for drugs and jewellery parts as well as vehicle catalysts, said its future prospects are very encouraging and it expects to perform strongly again in 2008/09, despite concerns about the state of the world economy and the slowdown in the United States.
Although Johnson Matthey is not immune to the effects of a recession, prospects for all our businesses are good, particularly for the Environmental Technologies division, Johnson Matthey said in a statement.
Cazenove said results at the top end of the forecast range revealed a combination of good progress in demand for autocatalysts as environmental legislation locks in, the benefits of higher platinum prices and a solid performance from the pharmaceutical area.
Going forward, there remains a high level of optimism, the broker said. This arises from the company's ability to benefit from the global trend to reduce emissions in the atmosphere, both in the traditional auto-related area and also in newer areas such as working with chemical, industrial and oil industries in the process technology area.
At 0916 GMT, shares were down 1.7 percent at 616 pence, valuing the company at 4.26 billion pounds.
Johnson Matthey increased revenue by 22 percent to 7.5 billion pounds and upped the dividend by 9 percent to 36.6 pence a share. (Reporting by Marc Roca, Editing by Mark Potter)
(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.