Johnson Matthey (LSE:JMAT) reported a substantial increase in cash generation for the year ended 31 March 2026, with free cash flow rising 163% to £168 million. Underlying operating profit also increased by 14%, despite a decline in precious metal-related sales across parts of the business.
The group’s Clean Air division delivered improved profitability, with margins rising to 14.5%, supporting management’s strategy of transforming Johnson Matthey into a leaner and more cash-generative organisation. However, reported operating profit declined year-on-year due to gains recorded from disposals in the prior period, while the PGM Services business was negatively affected by precious metal losses linked to its U.S. refinery operations.
Portfolio Transformation Accelerates
Johnson Matthey is continuing to reshape its business portfolio through a series of major transactions. The company recently agreed to sell its Catalyst Technologies division for £1.325 billion, with plans to return £1 billion of proceeds to shareholders.
At the same time, the group has agreed to acquire U.S.-based Cormetech in a deal valued at $360 million. The acquisition is intended to strengthen Johnson Matthey’s position in stationary emissions control systems, particularly in rapidly expanding markets such as data centres and industrial infrastructure.
Management believes the addition of Cormetech will help establish the company as a global leader in emissions control technologies outside the automotive sector, broadening its long-term growth opportunities.
Outlook Supported by Strategic Refocus
For the 2026/27 financial year, Johnson Matthey expects low-to-mid single-digit growth in underlying operating profit alongside continued progress in free cash flow generation, despite increased capital expenditure associated with the development of a new U.K. PGM refinery.
The company also confirmed that it intends to maintain its dividend while implementing board and committee changes aimed at streamlining governance and supporting long-term shareholder returns in an uncertain macroeconomic environment.
Johnson Matthey’s outlook reflects a mixed financial performance with significant operational improvements and strategic initiatives. While technical indicators and valuation metrics present challenges, positive earnings call sentiment and corporate events provide a more optimistic outlook.
More about Johnson Matthey
Johnson Matthey is a U.K.-based specialty chemicals and advanced materials group focused on emissions control, precious metals services and hydrogen technologies. Its core businesses include Clean Air catalytic solutions and PGM Services, with a growing emphasis on stationary emissions control for sectors such as data centres and industrial customers.
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