Profits slip at Johnson Matthey

JOHNSON MATTHEY profits fell 11 per cent last year because of restructuring and disposal costs, a recession in the European car market and stagnant precious metal prices, writes Peter Rodgers.

The metals and catalyst group made pounds 65.4m before tax compared with pounds 73.8m in 1993, after a pounds 6.7m loss from selling an Italian business and a pounds 5m restructuring provision for a ceramics joint venture being set up with Cookson Group.

But Matthey announced an 11 per cent dividend increase to 11.4p a share. Gordon Thorburn, executive director, said this reflected strong underlying performance, with a 7 per cent rise in earnings per share before the exceptional items.

David Davies, chairman, wants to set a 20 per cent return on net assets as a minimum, compared with 18 per cent last year, and said the company aimed to grow big enough to join the FT-SE 100. It is number 130 in the FT-SE 250.

Operating profits of the platinum catalyst business rose 4 per cent to pounds 28.2m as strong demand in North America was offset by a depressed European car market. But Mr Thorburn said European car sales were up 5 per cent in recent months and the company was more optimistic.

The shares fell 28p to 558p.