Johnson Matthey disappoints investors

As Johnson Matthey reports disappointing first half results Graham Spooner, investment research analyst at The Share Centre, explains what they mean for investors.

"Johnson Matthey has reported disappointing first half results, with pre-tax profits for the period falling by 6%. This is largely due to lower precious metals prices as a result of unrest in South Africa. In the short term, the outlook in the region is difficult to assess, which is a concern for investors as over 40% of the company's profits are generated from the precious metal products division.  

"The outlook for Johnson Matthey remains cloudy and the company has pointed to further uncertainty as several of its other markets have weakened. Investors should expect much of the same from Johnson Matthey in the second half of the year.

"In the present climate, and with around a third of the company's business in Europe, we continue to recommend investors ‘hold' Johnson Matthey. The share price has been treading water for some time and this is likely to continue. Investors will also be disappointed to see the dividend increase was slightly below forecast."

For more information, visit share.co.uk.