Johnson Matthey Plc

Johnson Matthey said underlying operating performance increased by 38% in the half, including an 11% increase in Clean Air and a 33% increase in Platinum Group Metals. Clean Air margin improved by 200 basis points to 12.4%, and management reiterated its target of 14% to 15% for the full year and 16% to 18% by 2027-28. The company also said first-half free cash flow moved from a significant outflow last year to a small inflow this year, while net debt rose mainly because of the Catalyst Technologies cash outflow, the dividend, and a stock build tied to the U.S. refinery maintenance shutdown. Looking ahead, management said Catalyst Technologies is still expected to close in the first half of calendar 2026, GBP 1.4 billion will be returned to shareholders at closure, the new PGM refinery should start commissioning by March 2026, and Hydrogen Technologies remains on track for run-rate breakeven by March 2026.

Liam Condon framed the half as evidence that the new, more cash-focused model is working, highlighting stronger profits, better cash generation, and progress toward simplifying the group after the Catalyst Technologies sale. He emphasized that JM is concentrating on its core PGM capabilities, pushing Clean Air margins higher, and building a more streamlined organization with fewer layers and clearer accountability. His tone was confident and constructive, with repeated comments that the business is “very much on track” for stated targets.

Richard Pike focused on execution against the new cash agenda, saying the company is making strong progress across profit and free cash flow, despite modestly lower sales driven mainly by Clean Air volume declines. He pointed to a modest H1 cash inflow, a significant working-capital opportunity in payables, receivables, and inventory, and said capex remains elevated because of the new refinery and related infrastructure, with a target of GBP 120 million still in sight. He also said the refinery ramp-up costs remain in the GBP 20 million to GBP 30 million range and that the dividend is maintained at 22p per share.

Analysts pressed management on refinery ramp-up costs, working capital, PGMS downcycle timing, exceptionals, customer behavior in PGM services, and whether Clean Air demand had been prebuilt ahead of tariffs. Management said refinery startup costs are still in the GBP 20 million to GBP 30 million range, working capital improvements are only “scratching the surface,” and the company is not close to over-tight inventory levels. On PGMS, they said second-half profit will be lower due to lower volumes, higher maintenance, and a tough comparison, but recovery should come as the new refinery comes online; on Clean Air, they said there has been no tariff-related prebuild. They also said CT weakness does not affect the sale, since closing depends on regulatory approvals and the carve-out, both of which are on track.