CHEMICALS and materials group Johnson Matthey last night predicted a good outlook for the future as it posted a four per cent rise in profits to £204m.

The company, which employs 450 staff at the headquarters of its catalysts business at Billingham, Teesside, cheered the markets with positive comments from chief executive Neil Carson.

The catalysts business grew by six per cent and Mr Carson described the outlook across the business as "good", with additional revenues due from diesel emission control products and pharmaceutical sales.

Matthey, which dates back to 1817, is best known for its distribution of precious metals - in particular platinum - but is also a leading maker of catalysts for the control of vehicle exhaust emissions. It supplies coatings and surface treatment for glass and other applications.

The pharmaceuticals materials operation was down two per cent because of the expiry of a patent, while colours and coatings continued to show signs of recovery, with a 17 per cent improvement in profits.

Matthey warned that the lacklustre state of the US car industry was likely to have some effect on its results for the first half of this year.

But it said Europe and Asia were bigger car producing regions and that its businesses in those regions were continuing to see good demand, which should offset the fall in the US.

Unlike this year, profits for the group as a whole are expected to be higher in the second half of the financial year.

At the bottom line, this year's figures were affected by exceptional items of £51.9m from losses on the previous disposal of its pigments business, as well as the restructuring of under-performing assets. Profits after one-off items fell to £131m. Investors will receive dividends of 27.7p a share.