Chemical giant Johnson Matthey will need to deliver some good news in its half-year results after calling it quits on its battery materials business
Chemical giant Johnson Matthey (JM) will need to deliver some good news in its half-year results on Wednesday after calling it quits on its battery materials business.
This month it said it was too far behind competitors for the division to stay viable, and the costs associated were likely to hit profits hard.
Investors were disappointed, and the stock has since plunged 21 per cent to its lowest in 13 months.
After the firm had predicted a first half in line with expectations and a full-year at ‘the lower end’ of market forecasts, investors are unlikely to find much solace in the latest figures. The results will be the last for chief executive Robert MacLeod, who retires in February after nearly eight years in charge.
He will be succeeded by Liam Condon, a board member at German chemicals firm Bayer.
In a trading update on November 11, JM referred to ‘hydrogen technologies’ and the ‘decarbonisation of chemicals’ as potential growth areas, so clarity on how it may invest in these sectors, and the cost, is likely to attract scrutiny.
Whether these new ventures will be enough to replace falling sales of petrol and diesel cars remains unclear, as JM makes most of its money by selling catalytic converters to clean the fumes spewed out by combustion engines.
Shareholders will also be curious about how JM has been coping with the supply chain crisis hitting the motor vehicle industry, with shortages of computer chips and other components forcing many car makers to cut production.