Johnson Matthey full year hit by impairment charge; sees new year in line

Pre-tax profits also include the benefit of the £130m profit on the sale of Research Chemicals. Revenue were up 6% at constant exchange rates to £10.7bn. Basic earnings per share were 166.2p.

The board is recommending a 5% increase in the total dividend for the year, reflecting its confidence in the group's long term performance. This comprises a final dividend of 52.0p, making a total of 71.5p.

The company added that If current exchange rates are maintained throughout 2016/17, foreign currency translation will have a positive impact of approximately £15m on underlying operating profit, primarily due to sterling's weakness against the US dollar and the euro.

“The structural drivers for the group's technologies remain robust despite the challenging macroeconomic conditions which are expected to continue in 2016/17. Increased investment in R&D and capex, together with the restructuring actions taken in 2015/16, provide strong foundations for future growth,” the company said.

“In 2016/17 the group will benefit from progress in fine chemicals and new businesses. Emission control technologies' performance for the year as a whole is expected to be slightly ahead and, whilst market conditions in process technologies remain challenging, its performance should improve as a result of the reduced cost base.”

“At current platinum group metal prices, performance in precious metal products is expected to be slightly lower. Overall, at current exchange rates, we expect the group's performance in 2016/17 to be ahead of 2015/16, in line with current market expectations.”

The company said its emissions control technologies unit had another strong year, benefiting from the full implementation of Euro 6b legislation in Europe and light duty vehicle market growth in Asia and North America, although the reduction in demand for Class 8 trucks in our second half impacted heavy duty diesel catalyst sales in North America.

Process technologies had a challenging year with the slowdown in activity in the chemicals sector and the sustained low oil price impacting the division's performance.

In precious metal products, conditions were also been difficult due to the lower average platinum group metal prices which were around 25% down on last year.

“In fine chemicals, there was steady demand in active pharmaceutical ingredient manufacturing and good progress in catalysis and chiral technologies. However, the division's performance was held back as a result of a safety shutdown in the US following a fatal accident in the first half. New businesses made good progress with strong sales growth in battery materials and a positive contribution from atmosphere control technologies,” Johnson Matthey said.