Matthey’s leap on £305m divi
CHRISTMAS has come early for Johnson Matthey’s shareholders.
The stock rocketed 237p to 2694p after the world’s biggest maker of metal catalysts for car-emission control devices announced it will be paying out £305m in a special dividend of 150p per share after selling its Gold and Silver Refining business for £380m earlier in the year.
This will be paid on top of an interim dividend which was increased by 5pc to 19.5p per share, despite a fall in first-half profits.
The shares reversed off a cliff in September to a two-year low of 2216p and 38pc below January’s peak of 3590p on persistent selling fuelled by fears the group would suffer in the wake of the Volkswagen emissions scandal.
Johnson Matthey’s emissions control technologies (ECT) division sells catalytic conversions to manufacturers of both diesel and petrol-powered cars. Strong sales of diesel car catalysts in Europe drove the division’s underlying profit up 16pc to £237m during the year to end-March 2015.
Chief executive Robert Macleod said: ‘The ECT division grew strongly in the first half but challenging conditions in several of our other business areas have adversely affected our performance.’ He has therefore started a restructuring review, particularly in its processing technology division, which sells catalysts and technologies to the oil and petrochemical sector. Plans are to cut costs by around £30m annually.
From September 2017, real-world driving emission standards will be introduced which will require cleaner diesel engines. JM says it has advanced control systems which will be useful in meeting new legislation.
CRH, or Cement Roadstone Holdings, climbed 97p to 1875p after reiterating its guidance that 2015 will be a year of growth. Third-quarter trading, as expected, benefited from continued positive momentum in the Americas where economic recovery is driving construction demand.
Better-than-expected interim figures from Royal Mail and its prediction that customers would enjoy a cheaper parcel post in the coming year delivered a gain of 22.5p at 476.7p.
The hat-trick of upbeat statements from constituents helped the Footsie march 50.96 points forward to 6329.93, while the FTSE 250 advanced 55.63 points to 17,144.72. Following its overnight leap of 247 points after FOMC minutes appeared to firmly back a US interest rate hike on December 16, Wall Street continued to rise before a profits warning from health insurer United Health proved a blot on the landscape.
Housebuilders were friendless after Bovis Homes fell 85p to 904p after warning its operating margin in 2015 will be only marginally ahead of last year. Dealers are also fearful that if US interest rates do rise for the first time in over seven years next month, it will not be long before UK rates follow suit. Persimmon fell 25p to 1840p and Taylor Wimpey 0.4p to 185.3p.
Dearer money fears also dragged Virgin Money 21p lower to 353p and One Savings Bank 16.9p down to 388.7p.
Mobile phone giant Vodafone cheapened 2.5p to 221.5p after placing £600m worth of new debt financing; non-dilutive equitylinked bonds due in 2020. Net proceeds will be used to offer bonds for general corporate purposes and for purchase of cash-settled call options.
South African specialist bank and asset manager Investec put on 31p to 542p after reporting a 13pc gain in first-half profits, boosted by an impressive performance by its lending unit.
Dog of the day was newspaper publisher Johnston Press. Its shares were shredded 6.75p or 12pc to an all-time low of 46.25p after reporting publishing revenues were down 10.8pc and print advertising revenues fell 14.7pc in the 17 weeks to end-October. Circulation revenues fell 7.2pc, having dropped 6.5pc in the second quarter. The company continues to shift to online readership after announcing last month that it had closed or merged 11 free titles as part of the portfolio simplification programme.
Dart Group, the Jet2 and Jet2holidays operator, flew 14p higher to 483.75p. Interim profits jumped 66pc to £146.8m on leisure travel revenue growth up 15pc at £951.7m. Broker Canaccord Genuity’s target price is £6.
Beleaguered platinum miner Lonmin eased 0.65p to 9.85p despite hearing that shareholders had approved the 46-for-1 rights issue to raise £267m. The board will now be able to press ahead with its debt restructuring as it attempts to stay alive in the face of declining platinum prices and rising costs.
Aminex improved 0.08p to 1.9p on news it is selling down its stake in Kiliwani North Development Licence in Tanzania and farming down its stake in the Ruvuma PSA for £5.6m. Bowleven, unchanged at 24.5p, is the buyer.