Why Johnson Matthey Is up 18% This Year


LONDON -- Johnson Matthey (ISE: JMAT.L) has advanced 18% to 2,276 pence so far during 2012, making the share one of this year's best performers in the FTSE 100 (UKX).

The company, a leading specialty-chemicals and precious-metals business, seems to have impressed investors with a series of positive statements.

During February, Johnson Matthey published a third-quarter statement that said the group had continued to make further good progress.

Compared with the same period last year, Q3 sales (excluding precious metals) gained 22% to £649 million and underlying pre-tax profits increased 34% to £104 million.

The group also reported that net debt had been reduced by approximately £175 million during the quarter, due in part to a large inflow of customer-funded metal deposits.

During June, the company released its preliminary results for the year to March 31, 2012.

Revenues advanced 20% to £12 billion while underlying pre-tax profits surged 23% to £426 million. Underlying earnings per share gained 29% to 154 pence while the full-year dividend was lifted 20% to 55 pence per share.

Furthermore, the board also recommended a special dividend of 100 pence per share.

Then in July, the company reported there had been steady progress during its first quarter, and that sales (again, excluding precious metals) were up 6% to £657 million. Johnson Matthey also said its environmental technologies division had continued to perform well, with the subsidiary's sales for the quarter up 12% to £465 million and operating profit well ahead of last year.

Tim Stevenson, Chairman of Johnson Matthey, commented at the time:

Looking ahead, while visibility remains low, demand for the group's products is steady with growth in North America and Asia offsetting softer European markets. If market conditions and precious metal prices remain as they are today, the outlook for the group in the second quarter of 2012/13 is expected to be broadly similar to that of the first quarter.

Johnson Matthey's results for the six months to Sept. 30 will be published next week, which may reveal further encouraging news that could impress investors.

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