Johnson Matthey has something to celebrate

CORPORATE results will take a back seat this week following the extended bank and markets holiday as there are only a handful of companies reporting, led by Johnson Matthey and Hornby.

An ongoing shift towards “greener” technologies is likely to help boost profits at chemicals giant Johnson Matthey in its full-year results tomorrow.

The Hertfordshire-based group – which employs 9,000 people and has operations in Edinburgh, Reading and Swindon – specialises in catalysts, precious metals, fine chemicals and process technology.

The company is forecast to report a 20 per cent rise in underlying pre-tax profits to £411.4 million, despite a slide in silver and platinum prices across the year.

Strong performances in its environmental technologies and fine chemicals divisions have driven performance, according to analysts, while its metals division offset lower prices with robust levels of recycling activity.

Martin Evans, an analyst at JP Morgan Cazenove, said: “We expect robust results, and an encouraging outlook, which should also reflect the positive trend shown elsewhere by a number of chemical companies in 2012.”

Johnson Matthey has been a strong performer in the FTSE 100 Index, with shares around 7 per cent higher than they were a year ago against a wider market that is down around 11 per cent over the same period.

Profits at toy firm Hornby will be under pressure on Friday as the consumer spending squeeze hits demand for train sets and Scalextric racing cars.

The group, which also owns the Airfix and Corgi brands, is forecast to report a slight 2 per cent rise in underlying pre-tax profits for the year to 31 March, to £4.5m, echoing a profits warning in January.

After its second disappointing Christmas in a row, Hornby has vowed to fight back by broadening the price range of its products and expects to benefit from Olympics ranges, such as models of London taxis and buses.

Other new products this year include Scalextric Star Wars products, and a range of collectable Corgi die cast vehicles, to be aimed at lower price points.

The group also has a strong international arm, which should offset the tough conditions in the UK.

Margate-based Hornby recently overhauled its supply chain following difficulties in China and has seen a major lift in sales in continental Europe, including Germany.

Despite these factors, shares are around 35 per cent lower than they were a year ago.

On Friday, Newcastle-based housebuilder Bellway is expected to reveal resilient sales in its third quarter trading update, which is traditionally the busiest time of the year.

The UK’s fourth-biggest housebuilder previously said the third quarter of the year, the three months to the end of April, had started well – but this was before the wet weather set in.

The market was lifted by purchases made before the end of a two-year stamp duty holiday for first-time buyers purchasing homes worth between £125,000 and £250,000.

The City will be looking for signs that the UK government’s recently-launched “NewBuy” scheme – to help those buying a new-build home with just a 5 per cent or 10 per cent deposit rather than the typical 20 per cent – has started to have an affect on the ailing housing market.