Johnson Matthey Poised for Stronger Than Expected Full-Year Performance Amid Business Restructuring

Johnson Matthey PLC (LON: JMAT) has released a trading update indicating a promising outlook for the full year, driven by efficiency improvements and strong performance in specific business segments.

However, the company is undergoing a restructuring, including the sale of its Catalyst Technologies business to Honeywell, which will impact its financial reporting.

The re-classification of Catalyst Technologies as a discontinued operation, aligning with IFRS 5, means that headline financials for the group (sales and underlying operating profit) will exclude this segment.

To provide clarity, Johnson Matthey has furnished a breakdown of sales and underlying operating profit by business for the year ended March 31, 2025.

For the half year ended September 30, 2025, Johnson Matthey anticipates a robust performance in group underlying operating profit, excluding Catalyst Technologies and Value Businesses.

This positive trajectory is attributed to ongoing efficiency enhancements group-wide, coupled with strong trading in the PGM (Platinum Group Metals) Services business.

The company is also demonstrating encouraging progress in cash performance. While group free cash flow is expected to show an outflow for the first half, a significant year-on-year improvement is projected, a notable rebound from the £169 million outflow in the first half of 2024/25.

The company anticipates a material step up in free cash flow for the full year compared to the prior year's £59 million inflow, as working capital improvement measures take hold.

The group outlook for the full year, excluding Catalyst Technologies and Value Businesses, is now projected to be at the higher end of initial guidance, indicating mid-single-digit growth in underlying operating profit.

Performance is expected to be weighted towards the second half of the year. Should precious metal prices and foreign exchange rates remain stable at current levels for the remainder of the 2025/26 financial year, the company anticipates a net £10 million benefit to full-year operating performance, an improvement from the previously guided £5 million net adverse impact in May 2025.

However, the discontinued Catalyst Technologies business is expected to report a material year-on-year decline in underlying operating profit for the first half, impacted by weaker demand for catalysts and the timing of licensing wins in key end markets.

Despite this short-term setback, Johnson Matthey emphasizes the long-term growth potential of Catalyst Technologies, citing additional large-scale project wins and a healthy project pipeline in its sustainable technologies portfolio. The sale of this business is expected to be completed in the first half of calendar year 2026.

Johnson Matthey is set to announce its half-year results for the six months ended September 30, 2025, on November 20, 2025.