Johnson Matthey Share Discussion Threads

[miata] 27/1/2010 09:57

Johnson Matthey expects results this year to come in slightly better than market estimates as recovery comes through in a number of markets. Group sales excluding precious metals for the third quarter were 9% ahead of the same period last year.

[gateside] 16/1/2010 19:48

Platinum to beat gold, says Goldman Sachs



The bank said gold could face competition for investors' money following the launch of new exchange-traded funds (EFTs) that make it easy to gain exposure to platinum and palladium, another precious metal.

"Gold EFTs may face increased competition for investor demand in 2010 from the introduction of both the platinum and palladium ETFs," Goldman said.

This could put downward pressure on the gold price but could have the opposite effect on platinum and palladium, it added. "While these new physical-backed ETFs present a downside risk to gold ETF demand and gold prices, they represent an upside risk to platinum prices. We continue to recommend a long position in platinum as a 'gold-plus' trade."

The bank described demand for gold EFTs as "rather muted", adding: "The holdings of gold EFTs have been essentially flat over the past six months at around 47m ounces. Should the investor demand for gold not return to the market this year, upside for gold prices would be further limited."

This was not the only possible cause of a fall in the gold price, however – Goldman said a tightening in American monetary policy posed the biggest risk. "An earlier-than-expected tightening of US monetary policy is the dominant downside risk to gold prices this year," it said.

However, the bank did not believe that tightening would actually take place and as a result it forecast a gold price of $1,350 in a year's time. It said: "Goldman Sachs economists continue to expect that the US Federal Reserve will not raise its short-term interest rate target in either 2010 or 2011, and we continue to expect that the resulting low real interest rate environment will continue to support gold prices.

"Consequently, we are maintaining our current gold price forecast of $1,350 on a 12-month horizon."

Gold was steady on Thursday, awaiting direction from currency markets, as the dollar fluctuated on weak US retail sales data and dollar-supportive comments from the European Central Bank. The spot price of gold was $1,139 in early afternoon trading in London.

[pelleeds1980] 26/11/2009 19:12

Not a great yield on this then!

[miata] 25/11/2009 08:28

Weak car production and lower metals prices earlier this year took their toll on platinum refiner Johnson Matthey's first half, though it expects an improvement over the rest of the year.

Interim dividend 11.1p Ex Dividend 2nd December 2009 Pay 2nd February 2010

[miata] 13/11/2009 09:22

Today's Broker Recommendations
13 November, 2009
3i Group Buy
Serco Group Buy
BT Group Buy
G4S Overweight
Johnson Matthey Buy

[miata] 22/10/2009 08:51

Platinum miner Lonmin saw a 20% decline in production of the precious metal in the fourth quarter after having to shut down mines for safety reasons and for maintenance.

[miata] 21/10/2009 12:57

The 1 year chart re platinum above is obviously still the driver, £/$ moves adding short term volatility.

[zeppo] 21/10/2009 10:26

MIATA

Wow! I did not even know that they had a medical division.

I was only aware of platinum and catalytic converters.

z

[miata] 21/10/2009 10:15

Johnson Matthey Medical's San Diego facility has completed a multi-million dollar expansion in order to integrate the operations of the company's former Temecula, CA facility. Both facilities have been providing high-quality, precision machined components to the medical device industry. In order to streamline operations, promote greater manufacturing efficiency and decrease inter-company transfer of materials, JM San Diego has added 7,000 s.f. of manufacturing space to its existing 34,000 s.f. and integrated all machining operations under one roof. Offices formerly occupying the first floor have been relocated to the second floor to further enlarge the manufacturing area. This additional space not only enables the facility to increase production capacity, but also to increase the size and capabilities of its engineering and development center.

[miata] 14/9/2009 15:12

Johnson Matthey stumbled after Morgan Stanley cut its rating for the group to "equal-weight" from "over-weight".

[miata] 09/9/2009 11:21

Automakers account for about 60 percent of platinum and palladium use, according to metals researcher and refiner Johnson Matthey Plc. China's passenger-car sales rose 90 percent last month as tax cuts and state subsidies stoked demand, an industry group said yesterday.

[miata] 24/8/2009 15:35

Impala Platinum Holdings Ltd., the world's second-largest producer of the metal, has averted a strike after unions said they will discuss a 10 percent wage offer.

[gateside] 03/4/2009 08:34

Johnson Matthey may have its problems but General Motors is not high among them. Although the British autocatalyst maker supplies the European division of GM, and Chrysler and Ford in the United States, it does not serve the larger part of GM in America, a task taken up by Engelhard, of New Jersey, and Umicore, its Belgian rival. Given this week's ousting of Rick Wagoner, GM's chief executive, and the Obama Administration's imposition of a 60-day deadline on the company to restructure more aggressively if it is to avoid bankruptcy, Johnson Matthey's limited exposure to the carmaker might come as a relief.

Additional comfort was provided by yesterday's year-end trading statement, which nudged its shares further ahead from November's low.

Trading over the past three months has been in line with expectations, such that earnings per share will be between 85p and 90p – not too far from the 89p achieved in the previous 12 months.

Further, Johnson Matthey has lost none of its facility to generate cash – more than £100 million in the year just ended. This means that, although the majority of its £600 million of borrowings are in US dollars and euros, and so inflated on translation by the weakness of sterling, it has still been able to reduce net debt by about £70 million through its own resources. With two of the company's recent big-ticket investments nearing completion – new autocatalyst factories in Pennsylvania and Macedonia – its capital expenditure, although high by most standards, will start to fall, and its cash generation rise in line.

Its appeal is that for a manufacturer which draws one third of its sales from the automotive industry, it has relatively flexible costs. It has only 9,000 staff – modest for a chemicals company with turnover of more than £7 billion – with the emphasis skewed towards R&D, effectively finding ways to build more efficient catalysts that contain less platinum.

Meanwhile, the company is making steady progress in related industrial niches, such as catalysts used in China to make methane from coal, and continues to be buoyed by ever-tightening emissions legislation, such as those governing heavy diesel trucks in the US, which comes into force next year. The upshot is that, on consensus forecasts, Johnson Matthey is expected to produce about 75p of earnings in its new financial year – no mean feat given weak platinum prices and the car industry's woes. Yet it will not be until June's full-year figures that the company will provide clarity – by which time the fate of Detroit's Big Three should also be clearer.

At £10.70, or 14 times earnings, stand back until then.

[gateside] 04/3/2009 04:52

Platinum Group Metals Recovery

While the bull markets in gold and silver are well known to most investors, the platinum group metals market receives much less attention. It was only last summer that supply driven concerns took the price of platinum to an all time high of $2300 an ounce. With the help of the credit crisis, in the following months the price plunged to 5 year lows of about $760 an ounce. The fundamental supply outlook for platinum remains quite bullish. The demand destruction is not as bearish as the mainstream media would lead you to believe. Top-producing South Africa continues to face problems increasing supply. In addition, the recent plunge in both platinum and palladium has made it difficult for producers to expand production or even make a profit. In recent weeks the platinum group metals have begun to move, rallying 40% in just a few short weeks. In the months ahead we are likely to see this strong move in platinum group metals continue.

Demand

The bulk basis of demand for platinum is in catalytic converters. Auto catalyst demand has slowed due to the current depressionary economic conditions. The auto sales growth rate in China and India has slowed from about 6 percent to about 4 percent. Even the slower growth rate will make astounding differences in the amount of metal demand as it compounds over time. At the same time we are dealing with supply destruction, which will likely more than offset any slowing demand growth.

Platinum supplies exceeded demand in 2006 for the first time in seven years. The surplus of 65,000 ounces has been wiped out by a deficit of 265,000 ounces in 2007. In 2008 we had a deficit of about 400,000 ounces. This supply/demand imbalance is why we saw prices set record highs last summer. This imbalance will likely get worse as we see the supply destruction more than offset by any slowing demand. This is also one reason we will likely see record highs again in the years to come.

It is also becoming more important to consider new sources of demand for these metals in the near-future. Increased electronics use as semiconductors in PCs, cell phones, LCD TV's, and other digital equipment is a source that could increase exponentially as countries such as China and India continue to increase the numbers of their middle-class. Fuel cells and even coinage such as the new Canadian Palladium Maple Leaf are also new sources of demand to start tracking. Lastly, ETFs have proven to be popular investment vehicles for various markets and as stored PGM stocks build up for these ETFs they will inherently reduce supply and increase demand at the same time.

Investors have recently increased buying in physical palladium and platinum. This is mostly due to the fact that the governments around the world are printing huge sums of funds in their efforts to bailout the financial system. As currencies around the world lose value, investors are flocking to the safety of precious metals. This trend will become more prevalent as the current disinflation moves into severe inflationary economic conditions.

[cambium] 03/2/2009 17:06

sorry mistook rns

[dr yung bung] 03/2/2009 16:57

i no see. you must talking other stock. JMAT directors no buy have no hopes

[cambium] 03/2/2009 15:55

a bit of director buying today

[cambium] 29/1/2009 14:15

Well done Gateside, beat me to it, not been a huge fan of JMAT of late sorry

[wjccghcc] 29/1/2009 10:08

Brilliant. Thanks.

[gateside] 28/1/2009 22:57

I have started a new thread with some JMAT & Platinium charts in the header

[dr yung bung] 28/1/2009 12:33

28.1.09 - On that basis we would now expect Johnson Matthey's underlying earnings per share (before amortisation of acquired intangibles) for the year as a whole to be in the range 85p to 90p (compared with 89.5p in 2007/08).

26.11.08- On that basis we would expect underlying earnings per share for the year as a whole to be in the range 90p to 94p (1% - 5% up on 2007/08).