Portfolio

Johnson Matthey warns annual results will miss forecasts

By Sean Farrell

Date: Monday 30 Mar 2020

Johnson Matthey warns annual results will miss forecasts

(Sharecast News) - Johnson Matthey warned annual results would miss expectations after the coronavirus crisis reduced demand and delayed shipments.

The chemicals and science company said it expected the Covid-19 outreak to reduce its trading performance by about £50m in the year to the end of March. Johnson Matthey said conditions were too uncertain to forecast the impact on its operations in the year that starts on 1 April.

Johnson Matthey said before the Covid-19 crisis took hold it was on course to meet expectations for the year to the end of March. The disruption had reduced demand for its clean air business, which reduces vehicle emissions, and delayed about £20m of shipments at other divisions.

The FTSE 100 company said it had closed most of its clean air factories after a number of vehicle manufacturers shut their plants. In China Johnson Matthey's clean air operations are resuming operations as the country starts to recover from the outbreak.

There has been no large fall in demand at the efficient natural resources division though some customers in catalyst technologies have delayed orders. In China demand is starting to improve. Most catalyst technologies plants are running though Johnson Matthey said it was monitoring the situation.

At other businesses operations remain open but some orders have been delayed because of stricter border controls. The company said it had flexible costs and was reducing inventory, collecting payments and cutting expenses.

Robert MacLeod, Johnson Matthey's chief executive, said: "In 2019/20, we have made good strategic progress and were on track to deliver results in line with market expectations this year, prior to developments with Covid-19. The ongoing pandemic has led to a deterioration in some of our end markets and consequently we now expect to deliver group operating performance below market expectations.

"Looking beyond the current environment, given our leading market positions, strong technology offering, and operational and investment discipline, we remain confident in our medium term strategy."

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