Johnson Matthey reports 16% quarterly profit, names new CEO

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LONDON (Reuters) -- Johnson Matthey, the world's leading manufacturer of catalysts to control car emissions, appointed a new CEO today and said it was positive on its second-half outlook after reporting a 16 percent rise in third-quarter profit thanks to tighter vehicle emissions rules in Europe.

Neil Carson, CEO for a decade, will step down at the UK supplier after annual results in June and Robert MacLeod, who joined the company as finance director in 2009, will succeed him.

"We like what Robert has done as a finance director. He is known for being a straight-talking, focused individual so I have no doubt the business will be run tidily under his stewardship," Liberum Capital analyst Adam Collins, said. Carson will remain on the board until the end of September to ensure a smooth handover.

Improved outlook

Johnson Matthey said its outlook had improved, boosted by a better-than-expected performance at its Emission Control Technology (ECT) division, which focuses on autocatalysts and represents more than half of group sales and almost 40 percent of operating profit. It now expects second-half results to be slightly ahead of the first half's 212.9 million pounds underlying profit before tax, excluding the impact of the end of a long-standing platinum buying contract and other arrangements with Anglo American Platinum.

"Our guidance is ticking up a little bit in the second half because the ECT division is a bit stronger that we thought but that's partially offset by weakness in precious metals," finance director MacLeod said.

Analysts had expected the second half to be broadly in line with the first half. Underlying profit before tax for the third-quarter to Jan. 30 stood at 96 million pounds ($159 million), up 16 percent from 82.7 million pounds in 2012/13 and slightly ahead of analysts' forecasts.

The company benefited from higher demand for products to meet the new Euro 6 vehicle emission legislation that came into force on Jan. 1 in Europe. "The figures were slightly better than the market expected but there was an expectation that these would be solid results. If there are changes they will be modestly upwards," Collins said.

Sales, excluding precious metals, were 12 percent higher at 708 million pounds. Sales of the Precious Metal Products division, which makes up about 16 percent of group sales, fell slightly to 95 million pounds from 97 million as a result of weak precious metal prices.

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