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LONDON, June 1 (Reuters) - Johnson Matthey forecast on Thursday that a greater focus on vehicle pollution would lift long term sales growth of its catalysts as it reported improved annual revenue and profit.
The British company, which this year divided into four sectors -- clean air, efficient natural resources, health and new markets -- said that for the year ended March 31, sales of vehicle catalysts were up 16 percent.
And the global focus on clean air, with many cities clamping down on more polluting cars and trucks, would spur growth for the medium to long term.
Johnson Matthey reported a 12 percent rise in full-year revenue and 18 percent growth in operating profit for the group as a whole and recommended a final dividend of 54.5 pence per share, up 5 percent, which it said reflected "confidence in the group's medium-term prospects."
Doubts about the future of diesel cars have grown as Volkswagen's dieselgate scandal has spread to other carmakers and research has shown the health damage caused.
Some analysts and industries are now predicting a quicker than expected uptake in electric vehicles and Johnson Matthey said it was broadening its business into "new active pharmaceutical ingredients" and high energy battery materials.
Despite the upbeat outlook, shares in Johnson Matthey were down by 2.4 percent at 0715 GMT, underperforming the FTSE-100 Index.
Marc Elliott, an analyst at Investec, said he was disappointed Johnson Matthey had not announced a special dividend or stronger investment in battery materials.
"Despite the negativity surrounding autocatalysts, this business is performing strongly," Elliott said.
Johnson Matthey also said that from this financial year, ending in March 2018, it will no longer issue quarterly trading updates, in line with the views of investment associations. (Reporting by Barbara Lewis and Justin George Varghese; Editing by David Goodman and Alexander Smith)