Shares in chemicals company Johnson Matthey rose on the FTSE 100 after the group said it is confident of its future prospects despite reporting a drop in pre-tax profit of five per cent in the year ended 31 March.
The group said that its revenue was largely flat at around £7.8 billion, however pre-tax profit declined by five per cent to £254.1 million.
Despite the drop in profit the group said it would be raising its full year dividend five per cent to 39.00 pence per share.
The group said that it had a strong balance sheet with net borrowing down £61 million to £473.4 million.
Johnson Matthey said that its Environmental Technologies division has seen its sales rise 10 per cent to £1.2 billion, with underlying operating profit down three per cent to £120.9 million.
Sales in the group's Emission Control Technologies increased 12 per cent, while sales of Process Technologies' rose three per cent.
Revenue at the group's Precious Metal Products division increased three per cent to £5.6 billion, thanks to higher platinum prices. Sales at the Fine Chemicals division rose 13 per cent to £55.8 million.
Neil Carson, Chief Executive of Johnson Matthey, said, "2009/10 was a challenging year for Johnson Matthey but overall the group performed well. I am pleased that despite the global economic downturn our underlying profit before tax was only 5% down on our record performance in 2008/09.
"Johnson Matthey is expected to make good progress in the first half of 2010/11 compared with the same period of 2009/10 but the second half of the year is harder to predict. However, we are confident that the group is well positioned to take advantage of a global economic recovery.
"Over the last few turbulent years we have continued to invest in research and development and in expanding production capacity where we see opportunities for growth. This will continue. We have a strong balance sheet, a good business model and are well placed to return to growth. The longer term drivers for the group remain very much in place. Tightening emissions standards, the need for energy security and the drive to reduce the environmental impact of chemical and industrial processes all play to the strengths of Johnson Matthey. Together these give us confidence in the future prospects for the group."
Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers, commented,
"Profits have materialized at the higher end of expectations. Although profits are down on last year, group diversification and exposure to growth arenas such as pollution control continue to provide resilience. Total group sales are flat, debt has been further reduced, whilst management confidence in the group's long term outlook has been expressed by a 5pc increase in the dividend payment.
"In all, these are commendable results. However, management outlook comments summarize the dilemma for investors - strong current trading is counterbalanced by uncertainty for the medium term future. With group fortunes closely tied to that of the automotive industry, the roll back of government buying incentive schemes has begun to cast a shadow - a fact underwriting a currently negative market consensus opinion, following a 20pc plus recovery in the share price over the last year."
By 09:59 shares in Johnson Matthey were up 1.80 per cent on the FTSE 100 to 1,583.00 pence per share.