Emission laws lift Johnson Matthey

THE compulsory fitting of car- emission control equipment in Europe has helped Johnson Matthey, the precious metals technology group, to lift its interim pre-tax profit by 3.1 per cent.

The company earned pounds 33.2m in the six months to September, compared with pounds 32.2m in the same period last year.

David Davies, chairman, said a new catalytic converter factory near Brussels had been 'operating at full blast' to fill demand from car makers. All cars built in the European Community after 1 January must be fitted with a converter. JM is the world's biggest manufacturer of catalytic converters, and the division that makes them was responsible for all the earnings rise, with operating profit up 22 per cent at pounds 12.9m.

Mr Davies said that the new factory had lifted Johnson Matthey's percentage market share in Europe 'from the low to high thirties'. He expected the European market to grow by a further 50 per cent in the next financial year.

There were no immediate plans to expand production in Belgium, because extra demand could be met from plants outside Europe. For example, Rover has agreed to buy all its converters from JM's Australian factory.

JM's North American business has won a four-year contract from Honda to provide 1 million catalytic converters. However, it has not won a great deal of business from Japanese companies manufacturing in Britain.

The other divisions - materials technology, precious metals and colour and print - all saw their operating profits fall slightly, although Mr Davies said that the reductions in earnings were limited by a cost-cutting programme, which is now drawing to an end. In the past two years the company has cut its workforce by 20 per cent and made provisions totalling pounds 80m.

Earnings per share were up from 11.5p to 12.1p, and the dividend was increased from 3p to 3.2p. Shares rose by 4p to 468p.