Weaker sterling gives Johnson Matthey a £27m profit bump
Johnson Matthey is one of the companies that has welcomed post-Brexit currency volatility – the sustainable tech and chemicals firm today revealed that the weakened pound gave its profit a £27m bump in the six months to 30 September.
The figures
Sales were up five per cent to £1.68bn in the first half, from £1.6bn last year.
Revenue was up four per cent to £1.85bn from £1.77bn.
Underlying profit before tax was up five per cent to £219.6m from £208.3m.
Earnings per share (EPS) dropped 33 per cent to 92.7p from 137.9p, however underlying EPS went up 12 per cent to 96.4p from 86.3p.
The company hiked its interim dividend by five per cent to 20.5p per share from 19.5p.
The group's share price was up by 0.66 per cent in morning trading.
Why it's interesting
The group benefitted from the changes in foreign exchange rates brought on by political volatility in recent months – looking at revenue, while it was up four per cent, at constant rates it would have dropped by three per cent.
During the six month period, there was a significant decrease in the value of sterling against most major currencies, due in large part to the UK's vote to leave the EU. The main impact of this on Johnson Matthey, the company said, comes from the translation of foreign subsidiaries' results into sterling – and the effect this had was to increase underlying operating profit by approximately £27m.
What Johnson Matthey said
"Johnson Matthey had a solid first half, supported by favourable exchange rates, and our health and safety performance improved," said chief executive Robert MacLeod.
"Our guidance for the full year remains unchanged for our continuing businesses on a constant currency basis; that we expect the group's performance to be slightly ahead of last year. In addition, the group will benefit from favourable exchange rates if current rates are maintained.
"Johnson Matthey remains well positioned in growth markets. Through continued investment in R&D, our infrastructure and our people, we will continue to deliver both long term growth for shareholders and sustainable technologies that make the world around us cleaner and healthier."
In short
After a fairly dismal set of full-year results delivered in June, Johnson Matthey is more upbeat as currency volatility helped boost sales.