Johnson Matthey shares put on 6 per cent yesterday despite the world's largest maker of catalytic converters posting a 9 per cent fall in profits.
The FTSE 100 company saw pre-tax profits fall to £389m because of weaker revenues from its core precious metals division, which was hit by lower prices and supply constraints linked to strikes in the South African mining industry last year. However, an upturn in its US business lifted profits to the top end of City expectations.
The company said it expected to benefit from tighter emissions legislation in Europe. China and India are expected to adopt similar rules.
Neil Carson, the chief executive, said: "Johnson Matthey had a challenging year, but nevertheless we remain very well positioned to grow our business over the medium and long term."
On the new legislation, Mr Carson added: "We have successfully agreed contracts for the supply of these systems to our customers at a market share that is broadly similar to our current share."
The shares rose 164p to 2,750p.