Interim Results
Johnson,Matthey PLC
29 November 2001
For Release at 7.00 am Thursday 29th November 2001
Interim Results for the half year ended 30th September 2001
A good first half with continued strong growth in Catalysts & Chemicals.
Pharmaceutical Materials established as a separate division
Results
* Operating profit excluding exceptional items up 14% to £94.4 million
* Profit before tax excluding exceptional items up 7% to £92.2 million
* Earnings per share excluding exceptional items up 7% to 29.5 pence
* Interim dividend increased by 7% to 7.5 pence
Business Developments
* Strong performance from Catalysts & Chemicals shows the benefit of
investment in new technology
* New fuel cell components factory under construction at Swindon
* Pharmaceutical Materials now a separate division. Good contribution
from the Meconic and Pharm-Eco acquisitions
* Precious Metals ahead despite weaker platinum and palladium prices
* Colours & Coatings affected by economic slowdown
* Major investment programme in growth businesses continues despite more
uncertain economic outlook
Commenting on the results, Chris Clark, Chief Executive of Johnson Matthey
said:
'The group has performed well in the first half, despite more difficult
economic conditions, reflecting the overall strength of our business.
Although the second half will be impacted by the slowdown in the US and weaker
metal prices we expect both Catalysts & Chemicals and Pharmaceutical Materials
to show continued good growth.'
Enquiries:
Chris Clark, Chief Executive, Johnson Matthey 020 7269 8435
John Sheldrick, Group Finance Director, Johnson Matthey 020 7269 8438
Howard Lee, Gavin Anderson & Co 020 7457 2345
Report to Shareholders
Introduction
Johnson Matthey made good progress in the first half of 2001/02 with profits
comfortably ahead of last year. Most of the growth was generated by Catalysts
& Chemicals and the newly formed Pharmaceutical Materials Division, whose
results are shown separately for the first time. Despite the more uncertain
economic outlook the group is continuing to invest significantly in new
production facilities and in research and development in its growth
businesses.
Review of Results
In the six months to 30th September 2001 Johnson Matthey's profit before tax
and exceptional items rose by 7% to £92.2 million. Earnings per share
excluding exceptionals also rose by 7% to 29.5 pence.
Total sales fell by 7% to £2.6 billion reflecting lower prices for platinum
and palladium, particularly in the second quarter. Sales excluding the value
of precious metals rose by 16% to £559 million, with double digit organic
growth in Catalysts & Chemicals. Pharmaceutical Materials benefited from the
contribution from acquisitions.
Operating profit excluding exceptionals rose by 14% to £94.4 million. The
group had a net interest charge of £2.2 million in the period compared with a
net credit of £3.3 million last year. This change reflects the funding costs
of the major investments and share buy-backs undertaken in the period, and
higher interest paid on gold and silver leases.
The interim dividend has been increased by 7% to 7.5 pence.
Operations
Catalysts & Chemicals Division increased sales by 20% over last year to £746
million. Sales excluding the value of precious metals rose by 16% to £301
million reflecting strong growth in volume. Operating profit rose by 21% to
£45.1 million with both Catalytic Systems and Chemicals well ahead of last
year.
The Catalytic Systems business, which encompasses Johnson Matthey's worldwide
autocatalyst, heavy duty diesel and stationary source emission control
businesses, achieved excellent growth. Global car sales in Johnson Matthey's
first six months were 2 - 3% down on a very strong prior year. Catalyst
volumes grew marginally in the period but profits improved strongly as our new
generation of precision coated products proved cost effective for our
customers.
Chemicals also achieved strong growth in the first half with platinum group
metals refining benefiting from increased intake from primary producers. Our
catalogue based Research Chemicals business, which sells fine chemicals mainly
to research institutes, pharmaceutical and chemical companies, achieved
excellent growth.
During the period the Fuel Cells business continued to work in close
collaboration with its target customers to optimise the products that they
require for both small scale stationary and transportation applications. Fuel
cell systems for niche residential and back-up power applications are coming
onto the market next year containing Johnson Matthey products. Work has
commenced on the new Membrane Electrode Assembly (MEA) manufacturing plant at
Swindon in the UK. In addition a new facility for the reformer business is
nearing completion at West Whiteland in the USA.
Precious Metals Division's sales fell by 17% reflecting a reduction in
secondary gold refining and lower platinum and palladium prices. Despite this
drop the division was able to achieve 7% growth in operating profits to £29.3
million compared with last year, which had included the cost of restructuring
our Canadian business.
The average price of platinum fell by 3% to $536 per oz compared with the
first half of last year. Demand for platinum was robust, with increased
purchases by the auto industry and by jewellery manufacturers in China.
Demand for palladium weakened in reaction to earlier high prices and excess
inventory in the auto and electronics sectors. The price fell by 16% to an
average of $563 per oz.
Our platinum fabrication businesses achieved good growth in the period with
continued expansion of products for medical devices. Profits from our Gold
and Silver businesses were down reflecting difficult conditions in gold
refining and the weak gold price.
Colours & Coatings Division increased its sales by 4% to £130 million.
Operating profit fell by 6% to £14.5 million.
Structural Ceramics, which sells mainly to the tile industry, achieved good
growth in sales and profits, particularly in Southern Europe. The Glass
sector also performed well with good sales of decorative and gold products in
Europe. Market conditions for the Tableware business worsened, with UK
customers cutting back on production and both sales and profits declined.
Pharmaceutical Materials Division's sales increased by 157% to £41 million
with most of the rise coming from the acquisition of Meconic at the beginning
of July 2001 and Pharm-Eco Laboratories, acquired in April 2001.
Operating profit rose by 49% to £13.1 million with both acquisitions making a
good start under Johnson Matthey ownership.
Operating profit for the group's existing business, based in New Jersey in the
US, was slightly ahead of last year. Sales included some pre-launch
quantities of two new products. Meconic's results cover the three month period
from the beginning of July. Over that period Meconic achieved good sales
growth with strong demand for opiate products and galantamine. Pharm-Eco has
seen a steady increase in sales since its acquisition and is performing very
much in line with expectations.
Finance
Cash Flow
Johnson Matthey's net cash flow from operations was £114.4 million, an
increase of 48% compared with last year. This strong performance included a
cash inflow from reduced debtors reflecting lower metal prices. Stocks
increased by £46.6 million to support the growth of the business.
Capital expenditure was £61.1 million which was 70% up on last year and
represents 2.7 times depreciation. This high level of expenditure reflects
the group's strategy of investing in its growth businesses and will continue
in the second half of the year.
The group's free cash flow (before acquisitions and share buy-backs) was
slightly negative at £8.1 million, as a result of the high level of capital
expenditure. In the six months to 30th September 2001, the group spent £139.6
million on acquisitions and £39.6 million on share buy-backs (net of shares
issued) giving a net cash outflow of £188.7 million. In addition, the group
took on £46.6 million of debt and issued £18.7 million in loan notes relating
to the acquisitions. As a consequence the group moved from a net cash
position of £139.9 million at 31st March 2001 to a net borrowing of £108.1
million at 30th September 2001.
Johnson Matthey's balance sheet remains very strong, with shareholders' funds
of £798.3 million at 30th September 2001 and gearing (net borrowings/
shareholders' funds and minority interests) of 13%.
Exceptional Items
Overall, exceptional items and goodwill amortisation gave rise to a small net
charge of £0.8 million on a pre-tax basis.
In the early part of the year we reviewed the group's holdings of unhedged
platinum group metals. Following this review we decided to reduce the holding
of palladium and some of the metal was sold giving rise to an exceptional
profit of £7.2 million.
In early September 2001 we sold our loss-making French ceramic print business
(part of Tableware). The sale gave rise to an exceptional book loss of £5.5
million.
Goodwill amortisation in the half year increased to £2.4 million reflecting
the inclusion of goodwill amortisation relating to Meconic and Pharm-Eco.
Interest and Exchange Rates
The group's interest charge increased by £5.5 million, reflecting the funding
cost of the major investments and share buy-backs undertaken in the period.
Interest payable on gold and silver leases increased to £1.8 million in the
half year, as a result of very high lease rates for both metals in the first
quarter and a significant increase in average holdings.
Exchange rates were favourable for Johnson Matthey's results compared with the
same period last year. Approximately 40% of the group's profits are earned in
North America. The average rate for the US dollar for the six months to 30th
September 2001 strengthened to $1.43/£ compared with $1.50/£ for the same
period last year. Overall, favourable exchange translation benefited the
group by £1.4 million.
Taxation
This year the group has adopted FRS 19, a new accounting standard requiring
companies to fully provide for deferred tax. Last year's results have been
restated accordingly. The effect of the new standard is to increase the
group's average tax rate by about 1%, and to increase the deferred tax
liability included in the balance sheet by £43.6 million.
Compared with last year's restated figure, the group's total tax charge has
increased by £4.0 million to £29.4 million largely in line with the increase
in profit before tax.
The average tax rate, excluding exceptionals, has remained unchanged at 29.5%.
Business Developments
Last June we announced our plans to increase investment in our growth
businesses. This programme has made excellent progress and we are already
seeing benefits coming through.
In addition, we said we would pursue a number of acquisition opportunities for
Catalysts & Chemicals and Pharmaceutical Materials. The two acquisitions
completed for Pharmaceutical Materials have significantly strengthened the
business and we have separated it out as a stand alone division. We are
continuing to look for bolt-on acquisitions particularly for our Chemicals
business.
We also indicated that, despite these future investment plans, we had some
spare balance sheet capacity and would use some of that to buy back shares.
To date we have purchased 4.9 million shares for a cash cost of £45.4 million
(of which £6.2 million falls into the second half of the year).
As a result of these actions the group has both strengthened its operational
base and increased the financial efficiency of its balance sheet.
In Catalysts & Chemicals Division our autocatalyst business continues to
benefit from the spread of vehicle emissions standards around the world. On
26th June 2001 we opened our new manufacturing facility in Shanghai to serve
growing demand in China. This plant has initial capacity to produce 1.1
million autocatalysts and motorcycle catalysts per year. It is the ninth plant
in our global network of such facilities.
Johnson Matthey's new autocatalyst manufacturing technology is delivering new
generations of more sophisticated catalysts that can provide more cost
effective solutions to increasingly challenging vehicle emissions standards.
This new technique has been very well received by our customers and will
result in new business. We are continuing to install it in all our
manufacturing plants around the world which further improves our competitive
position.
The Chemicals business is making good progress in its programme of investment
to upgrade and expand its platinum group metals (pgm) refining capacity on
both sides of the Atlantic. This is enabling the business to take on higher
volumes of primary pgm materials and to recycle and refine more spent
catalysts.
Fuel cells continue to be a major focus of investment for future growth.
Investment in our new Membrane Electrode Assembly manufacturing facility at
Swindon is being undertaken on a modular basis in order to keep pace with
growth in customer demand for this key component. Our business is making good
progress with both its technical and commercial programmes. The first
commercial products for small scale stationary and portable power applications
will start to be available next year and we are well positioned to serve this
market as it develops.
The creation of the new Pharmaceutical Materials Division is an important
strategic step for the group. For many years we have operated a
pharmaceutical materials business from our facility in West Deptford, New
Jersey. That business has been focused on the manufacture of active
pharmaceutical ingredients for platinum anti-cancer drugs and a range of
controlled substances. The business has grown substantially over the last
five years and we are nearing completion of a major extension, which will
increase capacity by 40%.
The acquisition of Pharm-Eco Laboratories, which provides contract research,
process development and small scale synthesis services to the pharmaceutical
industry, has proved to be an excellent fit. It has enabled the group to
offer manufacturing services to customers from pre-clinical trials all the way
through to full scale manufacture of proprietary and generic drugs. The
subsequent acquisition of Meconic, which is a major UK manufacturer of
controlled substances, has given us a European base for the division and
provides major opportunities for cross-selling and sharing research and
development. We see excellent opportunities for organic growth from this new
division.
Outlook
The group has performed well in the first half, despite more difficult
economic conditions, reflecting the overall strength of our business.
Although the second half will be impacted by the slowdown in the US and weaker
metal prices we expect both Catalysts & Chemicals and Pharmaceutical Materials
to show continued good growth.
Consolidated Profit and Loss Account
for the six months ended 30th September 2001
Six months to Year to
30.9.01 30.9.01 30.9.01 30.9.00 31.3.01
Before
exceptional Exceptional
items and items and
goodwill goodwill Total Total
amortisation amortisation Total restated restated
NOTE £million £million £million £million £million
Turnover 2
Continuing 2,621.8 - 2,621.8 2,849.8 5,899.5
operations
Acquisitions 24.0 - 24.0 - -
Total 2,645.8 - 2,645.8 2,849.8 5,899.5
continuing
operations
Discontinued 1.2 - 1.2 2.1 4.2
operations
Group 2,647.0 - 2,647.0 2,851.9 5,903.7
turnover
Operating profit 4
Continuing 90.7 - 90.7 82.6 174.9
operations
Acquisitions 4.1 - 4.1 - -
Continuing 94.8 - 94.8 82.6 174.9
operations
before goodwill
amortisation
Goodwill - (2.4) (2.4) (0.1) (0.3)
amortisation
Continuing 94.8 (2.4) 92.4 82.5 174.6
operations
before
exceptional
items
Exceptional 5 - 7.2 7.2 - (0.6)
items
Total 94.8 4.8 99.6 82.5 174.0
continuing
operations
Discontinued (0.5) - (0.5) 0.2 0.1
operations
Group 94.3 4.8 99.1 82.7 174.1
operating
profit
Share of 0.1 - 0.1 0.1 0.2
profit in
associates -
continuing
Share of - - - (0.2) (0.2)
profit in
associates -
discontinued
Total 94.4 4.8 99.2 82.6 174.1
operating
profit
Profit on sale / 6 - (5.6) (5.6) - 1.1
closure of discontinued
operations
Profit on ordinary 94.4 (0.8) 93.6 82.6 175.2
activities before
interest
Net interest (2.2) - (2.2) 3.3 5.3
Profit on ordinary 92.2 (0.8) 91.4 85.9 180.5
activities before
taxation
Taxation 7 (27.2) (2.2) (29.4) (25.4) (54.2)
Profit after taxation 65.0 (3.0) 62.0 60.5 126.3
Equity minority (0.1) - (0.1) (0.4) (0.6)
interests
Profit attributable to 64.9 (3.0) 61.9 60.1 125.7
shareholders
Dividends 8 (16.2) - (16.2) (15.4) (51.3)
Retained profit 48.7 (3.0) 45.7 44.7 74.4
restated restated
pence pence pence pence
Earnings per ordinary
share (EPS)
Basic 9 28.2 27.4 57.3
Diluted 9 27.8 27.1 56.5
EPS excluding
exceptional items and
goodwill
amortisation
Basic 9 29.5 27.5 57.2
Diluted 9 29.2 27.2 56.5
Dividend per ordinary 8 7.5 7.5 7.0 23.3
share
Consolidated Balance Sheet
as at 30th September 2001
30.9.01 30.9.00 31.3.01
restated restated
£ million £ million £ million
Fixed assets
Goodwill 160.6 5.5 8.6
Tangible fixed assets 454.5 336.4 386.8
Investments 3.5 0.9 1.0
618.6 342.8 396.4
Current assets
Stocks 357.2 212.9 278.8
Debtors: due within one year 404.4 395.4 415.7
Debtors: due after more than one 106.1 100.5 103.9
year
Short term investments 17.4 16.0 15.9
Cash at bank and in hand 66.1 270.2 237.4
951.2 995.0 1,051.7
Creditors: Amounts falling due
within one year
Borrowings (80.5) (33.9) (19.8)
and finance
leases
Precious (111.7) (57.7) (91.8)
metal leases
Other (376.2) (307.7) (367.8)
creditors
Net current assets 382.8 595.7 572.3
Total assets less current 1,001.4 938.5 968.7
liabilities
Creditors: Amounts falling due
after more than one year
Borrowings (93.7) (75.2) (77.7)
and finance
leases
Other (0.4) (0.3) (1.0)
creditors
Provisions for liabilities and (104.5) (86.0) (78.0)
charges
Net assets 802.8 777.0 812.0
Capital and reserves
Called up share capital 218.4 222.1 222.5
Share premium account 126.4 121.5 123.2
Capital redemption reserve 4.9 - -
Associates' reserves - (0.4) -
Profit and loss account 448.6 428.8 461.7
Shareholders' funds 798.3 772.0 807.4
Equity minority interests 4.5 5.0 4.6
802.8 777.0 812.0
Consolidated Cash Flow Statement
for the six months ended 30th September 2001
Six months to Year to
30.9.01 30.9.00 31.3.01
£ million £ million £ million
Reconciliation of operating profit to
net cash inflow from operating
activities
Operating profit 99.1 82.7 174.1
Depreciation and amortisation charges 25.4 19.8 41.1
Profit on sale of tangible fixed (2.5) (2.0) (0.7)
assets and investments
(Increase) / decrease in owned stocks (46.6) 44.0 15.0
Decrease / (increase) in debtors 12.9 (59.1) (82.0)
Increase / (decrease) in creditors 26.1 (8.3) 9.0
and provisions
Net cash inflow from operating 114.4 77.1 156.5
activities
Cash Flow Statement
Net cash inflow from operating 114.4 77.1 156.5
activities
Dividends received from associates - - 0.1
Returns on investments and servicing (1.8) 3.6 5.8
of finance
Taxation (17.6) (15.2) (38.2)
Capital expenditure and financial (67.2) (39.6) (94.7)
investment
Acquisitions (139.6) (1.8) (6.2)
Disposals (1.4) (0.2) 0.6
Equity dividends paid (35.9) (31.1) (46.5)
Net cash flow before use of liquid (149.1) (7.2) (22.6)
resources and financing
Management of liquid resources 12.9 (35.7) 157.8
Financing
Issue and (39.6) 5.8 7.9
purchase of share
capital
Increase / 24.6 (7.2) (10.9)
(decrease) in
borrowings and
finance leases
due within one
year
(Decrease) / (4.5) 0.1 (1.2)
increase in
borrowings due
after one year
Net cash outflow from financing (19.5) (1.3) (4.2)
(Decrease) / increase in cash in the (155.7) (44.2) 131.0
period
Reconciliation of net cash flow to
movement in net debt
(Decrease) / increase in cash in the (155.7) (44.2) 131.0
period
Cash (inflow) / outflow from movement (20.1) 7.1 12.1
in borrowings and finance leases
Cash (inflow) / outflow from movement (12.9) 35.7 (157.8)
in liquid resources
Change in net funds / debt resulting (188.7) (1.4) (14.7)
from cash flows
Borrowings acquired with subsidiaries (46.6) - (1.3)
Loan notes issued to acquire (18.7) - -
subsidiary
Translation difference 6.0 (3.4) (9.9)
Movement in net funds / debt in (248.0) (4.8) (25.9)
period
Net funds at beginning of period 139.9 165.8 165.8
Net (debt) / funds at end of period (108.1) 161.0 139.9
Total Recognised Gains and Losses
for the six months ended 30th September 2001
Six months to Year to
30.9.01 30.9.00 31.3.01
restated restated
£ million £ million £ million
Profit attributable to 61.9 60.1 125.7
shareholders
Currency translation differences
on foreign currency net
investments and related loans (10.1) 3.5 9.5
Taxation on translation (3.2) (7.3) (9.7)
differences on foreign currency
loans
Total recognised gains and losses 48.6 56.3 125.5
relating to the period
Prior year adjustment (43.6)
Total gains and losses recognised 5.0
since last annual report
Movement in Shareholders' Funds
for the six months ended 30th September 2001
Six months to Year to
30.9.01 30.9.00 31.3.01
restated restated
£ million £ million £ million
Profit attributable to 61.9 60.1 125.7
shareholders
Dividends (16.2) (15.4) (51.3)
Retained profit 45.7 44.7 74.4
Other recognised gains and losses (13.3) (3.8) (0.2)
relating to the period
New share capital subscribed 3.9 5.8 7.9
Purchase of own shares (45.4) - -
Net movement in shareholders' (9.1) 46.7 82.1
funds
Opening shareholders' funds
(originally £851.0 million before
prior year adjustment of £43.6 million) 807.4 725.3 725.3
Closing shareholders' funds 798.3 772.0 807.4
Notes on the Accounts
for the six months ended 30th September 2001
1 Basis of preparation
The interim accounts were approved by the Board of Directors on 27th November
2001, and are unaudited but have been reviewed by the auditors. They do not
constitute statutory accounts, but have been prepared on the basis of the
accounting policies set out in the annual report for the year ended
31st March 2001, with the exception of the implementation of Financial
Reporting Standard (FRS) 19 - 'Deferred Tax' as described in note 7. Also, the
group sold its French print business during the period and Metawave Video
Systems Ltd, an associate, closed during the year ended 31st March 2001 and
so their results are reported as discontinued operations. Information in
respect of the year ended 31st March 2001 is derived from the company's
statutory accounts for that year which have been delivered to the Registrar of
Companies. The auditors' report on those accounts was unqualified and did not
contain any statement under 237(2) and 237(3) of the Companies Act 1985.
The activity analyses of total turnover (note 2), total turnover excluding
the value of precious metals (note 3) and total operating profit (note 4) have
been restated to show Pharmaceutical Materials as a new segment. This was
previously included within Catalysts & Chemicals but is now shown separately
as a result of its increased size due to acquisitions (note 11).
2 Total turnover
Six months to Year to
30.9.01 30.9.00 31.3.01
restated restated
Activity analysis £ million £ million £ million
Catalysts & Chemicals 746.3 622.1 1,467.6
Precious Metals 1,729.1 2,087.3 4,145.7
Colours & Coatings 129.8 124.6 251.0
Pharmaceutical Materials 40.6 15.8 35.2
2,645.8 2,849.8 5,899.5
Discontinued operations 1.2 2.1 4.2
2,647.0 2,851.9 5,903.7
Six months to Year to
30.9.01 30.9.00 31.3.01
restated restated
Geographical analysis by origin £ million £ million £ million
Europe 1,825.1 2,068.4 4,111.8
North America 709.6 744.8 1,585.2
Asia 487.7 557.6 1,094.4
Rest of the World 154.6 122.7 307.7
3,177.0 3,493.5 7,099.1
Discontinued operations 2.0 2.4 5.0
3,179.0 3,495.9 7,104.1
Less inter-segment sales (532.0) (644.0) (1,200.4)
2,647.0 2,851.9 5,903.7
Notes on the Accounts
for the six months ended 30th September 2001
3 Total turnover excluding the value of precious metals
Six months to Year to
30.9.01 30.9.00 31.3.01
restated restated
Activity analysis £ million £ million £ million
Catalysts & Chemicals 300.7 260.3 535.3
Precious Metals 90.3 85.0 161.9
Colours & Coatings 128.2 121.8 245.6
Pharmaceutical Materials 38.4 13.6 29.9
557.6 480.7 972.7
Discontinued operations 1.2 2.1 4.2
558.8 482.8 976.9
4 Total operating profit
Six months to Year to
30.9.01 30.9.00 31.3.01
restated restated
Activity analysis £ million £ million £ million
Catalysts & Chemicals 45.1 37.4 80.9
Precious Metals 29.3 27.3 57.4
Colours & Coatings 14.5 15.5 32.1
Pharmaceutical Materials 13.1 8.8 18.0
Corporate (7.1) (6.3) (13.3)
94.9 82.7 175.1
Discontinued operations (0.5) - (0.1)
Goodwill amortisation (2.4) (0.1) (0.3)
Exceptional items included in 7.2 - (0.6)
total operating profit
99.2 82.6 174.1
Six months to Year to
30.9.01 30.9.00 31.3.01
restated restated
Geographical analysis £ million £ million £ million
Europe 41.1 30.4 66.9
North America 37.8 40.1 81.4
Asia 6.9 6.2 13.8
Rest of the World 9.1 6.0 13.0
94.9 82.7 175.1
Discontinued operations (0.5) - (0.1)
Goodwill amortisation (2.4) (0.1) (0.3)
Exceptional items included in 7.2 - (0.6)
total operating profit
99.2 82.6 174.1
Notes on the Accounts
for the six months ended 30th September 2001
5 Exceptional items included in total operating profit
The exceptional item included in total operating profit is £7.2 million
profit on sale of unhedged palladium.
6 Profit on sale / closure of discontinued operations
Six months to Year to
30.9.01 30.9.00 31.3.01
£ million £ million £ million
Sale of French print business (5.5) - -
(note 12)
Sale of Electronic Materials - - 3.4
Sale of Organic Pigments - - (1.2)
Closure of Metawave Video (0.1) - (1.1)
Systems Ltd
(5.6) - 1.1
7 Taxation
Under the provisions of FRS 19 - 'Deferred Tax', which the group adopted on
1st April 2001, the group has restated its deferred tax balances to recognise
deferred tax on all non-permanent timing differences that have originated but
not reversed by the balance sheet date as a change in accounting policy.
Consequently the group has restated its comparatives for the six months to
30th September 2000 and the year to 31st March 2001. The effect is to increase
the deferred tax charge in the six months to 30th September 2000 by £0.9 million
and in the year to 31st March 2001 by £1.9 million. The taxation charge on
translation differences on foreign currency loans in the statement of recoginsed
gains and losses has increased by £7.3 million in the six months to 30th
September 2000 and by £11.1 million in the year to 31st March 2001. The deferred
tax balance included in provisions for liabilities and charges at 30th September
2000 has increased by £38.4 million and at 31st March 2001 by £43.6 million.
Six months to Year to
30.9.01 30.9.00 31.3.01
restated restated
£ million £ million £ million
United Kingdom 11.4 11.1 22.7
Overseas 15.7 14.3 31.3
Associates 0.1 - 0.1
27.2 25.4 54.1
Tax on profit on sale of 2.2 - -
unhedged palladium
Tax on other exceptionals - - 0.1
29.4 25.4 54.2
8 Dividends
An interim dividend of 7.5 pence per ordinary share will be paid on 6th
February 2002 to shareholders on the register at the close of business on 7th
December 2001.
Notes on the Accounts
for the six months ended 30th September 2001
9 Earnings per ordinary share
The calculation of earnings per ordinary share is based on a weighted average
of 219,340,776 shares in issue (six months to 30th September 2000 - 219,121,620
shares, year to 31st March 2001 - 219,467,375). The calculation of diluted
earnings per ordinary share is based on the weighted average number of shares
in issue adjusted by the dilutive outstanding share options and long term
incentive plan.
Excluding exceptional items, the tax thereon and goodwill amortisation, basic
earnings per ordinary share were 29.5 pence (six months to 30th September 2000
restated - 27.5 pence, year to 31st March 2001 restated - 57.2 pence), and
diluted earnings per ordinary share were 29.2 pence (six months to 30th
September 2000 restated - 27.2 pence, year to 31st March 2001 restated - 56.5
pence).
10 Purchase of own shares
During the period the group has purchased an aggregate of 4,871,000 of its
own ordinary shares of £1 each for an aggregate consideration of £45.4 million
through the market. Of this consideration £6.2 million was outstanding at 30th
September 2001.
11 Acquisitions
Meconic plc
On 21st June 2001 the group announced that it had agreed terms for a
recommended cash offer for Meconic plc, the quoted UK parent company of
Macfarlan Smith, a manufacturer of active pharmaceutical ingredients and fine
chemicals. On 9th July the group announced that it had acquired over 50% of the
company and hence the offer became unconditional. As at 30th September 2001
the group owned 99.9% of Meconic plc.
The results of Meconic plc since its acquisition on 9th July 2001 have been
included in the results of Pharmaceutical Materials, and were turnover of £19.5
million and operating profit of £3.6 million. It has been accounted for by
acquisition accounting as a 100% owned subsidiary. The purchase consideration
was £147.6 million, including £0.2 million accrued, of which £18.7 million
was paid as loan notes. Costs incurred were £6.5 million, including £2.0
million accrued. The estimated fair value of the net assets acquired was £20.1
million, resulting in goodwill of £134.0 million. Borrowings acquired were £20.6
million.
Pharm-Eco Laboratories, Inc.
On 20th April 2001 the group acquired Pharm-Eco Laboratories, Inc. located in
Boston in the US for £6.0 million, and costs incurred were £1.5 million,
including £1.0 million accrued. The company provides contract research, process
development and small scale synthesis services to the pharmaceutical industry,
and its post acquisition results have been included in Pharmaceutical Materials.
Its turnover and operating profit since acquisition were £4.5 million and £0.5
million respectively. The estimated fair value of the net liabilities acquired
was £14.0 million, including £26.0 million of other borrowings, resulting in
goodwill of £21.5 million. This has been accounted for by acquisition
accounting.
12 Sale of French print business
On 6th September 2001 the group sold its French print business, Matthey
Beyrand et Cie S.A. The assets disposed of were £4.0 million, including cash of
£1.1 million. Costs incurred were £1.5 million. The loss on disposal was £5.5
million.
Financial Calendar
2001
5th December
Ex dividend date
7th December
Interim ordinary dividend record date
2002
6th February
Payment of interim dividend on ordinary shares
6th June
Announcement of results for the year ending 31st March 2002
16th July
111th Annual General Meeting
Johnson Matthey Public Limited Company
Registered Office: 2-4 Cockspur Street, Trafalgar Square, London SW1Y 5BQ
Telephone: 020 7269 8400
Internet address: www.matthey.com
E-mail: jmpr@matthey.com
Registered in England - Number 33774
Registrars
Lloyds TSB Registrars, The Causeway, Worthing, West Sussex BN99 6DA
Telephone: 01903 502541
Monday, 20th May 2024
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