Johnson Matthey doubtful on markets

The firm – whose products are used in catalytic converters for cars and trucks – said profits for the first half of its financial year would be "significantly ahead" of 2009 at the worst ebb of the recession.

But it added prospects further out were "harder to predict" amid uncertainties over the impact of car scrappage schemes ending, the speed of the recovery in the United States and the continued strength of its growth in China.

The group, which has UK bases at Cambridge, Reading and Edinburgh, saw pre-tax profits fall five per cent to 254.1m in the year to March 31.

But it added: "The longer term drivers for the group remain very much in place with ever-tightening emissions standards around the world."

The firm's second-half trading pulled back some of the ground lost in the first half, with overall sales revenues flat at 7.8bn.

The group's catalyst-making environmental technology arm – which is closely tied to the performance of the automotive industry – was an early casualty of hard-hit Western markets.

Underlying revenues received from the division slipped 11 per cent to 2.06bn for the year as a whole.

Johnson Matthey's precious metal division, which makes platinum family products, saw operating profits fall 22 per cent to 116.7m.