Johnson Matthey raises divi after good first half

Specialist chemicals firm Johnson Matthey reported six month earnings ahead of market estimates and has hiked its dividend.

Pre-tax profits came in at £203m, up 24% on the year before, with total revenues rising 29% to £5.9bn.

Analysts at Charles Stanley had tipped profits to come in at around £185.0m

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This equated to earnings per share of 72.8p, up 29% on the first half of 2010.

The company pushed its interim dividend up 20% to 15p per share.

The firm said its Environmental Technologies Division had made further good progress with sales up 22% and underlying operating profit 19% ahead.

Its Precious Metal Products Division's sales increased by 9% as its services businesses benefited from higher average precious metal prices and its manufacturing businesses saw continued growth in demand.

The Fine Chemicals Division performed well with sales up 16% driven by increasing demand for its active pharmaceutical ingredients, the company added.

Johnson said higher rare earth prices had hit its light duty gasoline autocatalyst business, reducing profits by £15m.

"We expect that the process of concluding rare earth price surcharge agreements with all our customers will be completed during the second half," the firm said.

The main rare earth material the company needs is cerium oxide, which is used to provide oxygen storage capabilities in catalysts for gasoline vehicles.

"We believe that Johnson Matthey is well placed and we currently anticipate that the group's results in the second half will be slightly ahead of those for the first six months of the year," said chief executive Neil Carson.

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