Johnson Matthey sees profits up but warns on platinum prices

Johnson Matthey, the chemicals company, saw sales (excluding precious metal sales) rise by 22% between October and December last year.

The firm's third quarter saw revenues up to £649m, producing profits of £104.3m, a rise of 34% on the previous year.

Net debt has reduced by £175m to £442m, although this was partly driven by a decrease in the amount of working capital needed as platinum prices dropped.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Johnson Matthey is split into three divisions. The Environmental Technologies division saw sales up 20% over the same period of 2010, at £461m, as Asian and North American demand for vehicle catalysts surged.

In the Precious Metals unit sales during the quarter were up just 1% over 2010 as a good performance from the services arm helped offset the weakening price of platinum.

The Fine Chemicals division saw sales up 15% to £62m, helped by sales of a new ingredient for the treatment of drug addiction.

The firm says it expects the picture in the UK and Europe to remain "challenging" but North America to put in a strong performance up to the end of the financial year in March.

Johnson Matthey's board expects the current good performance "to continue for the rest of the financial year" and for the second half to be slightly ahead of the first half.

There is a warning, however, that Precious Metals could be adversely affected by the low price of platinum continuing.

Over the last 12 months Johnson Matthey shares have climbed 6%.

BS