Johnson Matthey’s profits boosted by Brexit

Added 20th July 2016

Johnson Matthey said a weaker pound following the Brexit vote has had a positive effect on operating profits, a trend it expects to continue for the remainder of 2016 and into 2017.

Johnson Matthey’s profits boosted by Brexit

The company’s share price responded positively to the first quarter figures, rising 1.3% to 3188p.

In its first quarter update, Johnson Matthey confirmed that the positive impact from exchange rates had “increased substantially” after the referendum.

The sustainable technologies provider anticipates underlying profits could increase by another £25m to a total of approximately £40m, provided exchange rates remain at current levels.

Johnson Matthey returned a solid set of Q1 results in general, showing a 6% increase in group sales to £822m relative to the previous year. Adjusting for constant currency, group sales were only up by 2%.

The firm’s emission control technologies were in high demand over the period experiencing a 9% uptick in sales, which bolstered the group sales by £521m.

Johnson Matthey’s new businesses division was also a noticeable driver of group revenue growth with sales increasing by 14% to £43m, 11% ahead at constant rates.

Fine chemical sales fell flat over the quarter, dropping 5% by constant rates, the company reported.

A spokesperson for Johnson Matthey commented: “It is too early to predict the exact consequences of the UK's vote to leave the EU. However, the board currently believes that this will not have a long term material impact on Johnson Matthey and we continue to focus on executing our strategy for the group. We will continue to grow the business by investing in R&D, our manufacturing facilities and our employees, whilst improving our health and safety performance and delivering the very best products and service for our customers.”

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