Summary Results

• Profit before tax, exceptional items and goodwill amortisation up 4% at £204.0 million despite adverse exchange translation
• Earnings per share before exceptional items and goodwill amortisation up 5% at 67.1 pence. Dividend for the full year increased by 5% to 27.7 pence
• Strong cash flow. Net borrowings reduced by £24.9 million to £369.6 million despite £16.1 million net expenditure on share buy back
• Exceptional costs of £51.9 million. The cash generated from disposals and rationalisation of underperforming assets is being used to buy back shares

Divisional Performance

Operating Profit (before exceptional items and goodwill amortisation)

• At constant exchange rates operating profit before exceptional items and goodwill amortisation up 5%. Steady growth in Catalysts and Precious Metal Products, Pharmaceutical Materials slightly down following expiry of carboplatin patent, continued recovery in Colours & Coatings

Business prospects

• Excellent outlook for heavy duty diesel (HDD) catalysts. Increased investment in product development and in new programmes in partnership with leading original equipment manufacturers
• European autocatalyst market continues to grow driven by strong sales of light duty diesel (LDD) vehicles. Johnson Matthey very well positioned in LDD market and investing in new manufacturing capacity for catalysed soot filters
• Asian autocatalyst business performing well. Investment in expanding production capacity in both Japan and China
• Platinum group metal trading conditions remain good. Improved market conditions combined with volume growth has more than offset the impact of revised Anglo Platinum contract terms which began on 1 st January 2004
• In Pharmaceutical Materials our pipeline of new products is strong. New generic drugs will significantly add to revenues from early 2006 onwards
• Plan to release cash from underperforming assets underway. Share buy back programme commenced. A further £25 million to be purchased in the first half of 2005/06

Commenting on the results, Neil Carson, Chief Executive of Johnson Matthey said:

“In 2004/05 we made good progress. Earnings per share before goodwill amortisation and exceptional items were 5% up, despite adverse exchange translation. We have taken action to improve the returns on underperforming assets and are using the cash generated to buy back shares.

The outlook for the next few years is good. We expect to see the rate of growth in earnings increase in the second half of 2005/06 with additional revenues from diesel emission control products and new generic pharmaceuticals coming through in 2006.”

Presentation to Analysts
(Download presentation source - Prelims05.PPT)

Review Year Ended 31st March 2005 (html)

Review of Year Ended 31st March 2005
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Howard Lee
The HeadLand Consultancy
+44 (0)20 7036 0369

Laura Hickman
Gavin Anderson & Co
+44 (0)20 7554 1400