Matthey lifted by drive by to lower emissions

Improved sales of eco-friendly devices to cut car emissions helped catalysts specialist Johnson Matthey post a boost in profits today.

Johnson reported increased demand from leading car companies both in Europe and Asia for soot filters to remove particles from diesel exhaust emissions.

The company notched up half-year revenues of £3.2bn (€4.7bn), compared with £2.3bn (€47.8bn) in 2005, which helped pre-tax profits improve by 8% to £115.1m (€170.3m) during the six months to September 30.

Laws requiring the introduction of catalytic converters do not come into force until 2010, but the firm benefited from new heavy duty diesel (HDD) emission standards which helped sales to truck and bus operators.

The UK company’s new factory at Royston, Hertfordshire, which manufactures filters, as well as supply manufacturers with products to meet HDD standards, is already close to capacity.

Johnson said profits from the catalysts division rose 9% to £70.8m (€104.8m) in the year, as the high oil price fuelled demand for the systems as drivers turned to diesel cars.

Elsewhere, strong demand for platinum helped the company’s precious metals division post a 22% rise in profits to £37.2m (€55m), while there was a 5% rise for its pharmaceuticals materials arm to £17m (€22.2m).

Chief executive Neil Carson said: “The outlook for the second half is for continued top-line growth, driven by additional sales of emission-control products for trucks and buses following the introduction of HDD standards in Europe in October and North America in January.”

Paul Singer, equity analysts at Barclays Wealth, said: “The catalyst division continues to perform well, reflecting continued growth in diesel car sales offsetting the effects of a slow US auto production market.

“The outlook statement remains positive, although with caveats about sustained dollar weaknesses. The group expects good growth in the coming year, with the second half slightly stronger than the first.”