26th May 2022 10:35
(Alliance News) - Johnson Matthey PLC on Thursday said it is determined to "restore value to our shareholders" after recent changes in direction sent shares tumbling.
However, its financial outlook for the year ahead was at the low end of expectations, leaving investors unimpressed. Johnson Matthey shares were down 4.3% early Thursday at 2,249.40 pence. The stock is down 29% in the past 12 months.
The London-based specialty chemicals firm reported an annual revenue increase but profit came under pressure. Results for the financial year that ended March 31 were in line with expectations, however.
Revenue climbed 3.8% to GBP16.03 billion from GBP15.44 billion. Pretax profit fell 13% to GBP195 million, from GBP224 million.
The company posted "major impairments and restructuring" costs of GBP440 million, up sharply from GBP154 million. It noted GBP325 million of these costs stemmed from the sale of its Battery Materials business.
Johnson Matthey had initially booked GBP314 million in impairments related to the unit, but added GBP11 million "based on fair value less costs to sell".
It said Thursday that it has sold part of the unit to EV Metals Group PLC, a Perth, Australia-based battery chemicals and technology business, for GBP50 million cash. Johnson Matthey also will take a "minority equity stake" in EV Metals Group and get a seat on the board.
Johnson Matthey upped its payout by 10% to 77.0 pence from 70.0p.
The one-time FTSE 100 constituent said it was a "very challenging year".
"We took important and necessary strategic decisions with the business portfolio, with the exit from Battery Materials and divestment of Health. I know many of our stakeholders were very disappointed, but these were essential actions to enable us to focus on attractive, high growth opportunities that have a vital role to play in the acceleration towards net zero. I, the rest of the board and the executive team are determined that we will restore value to our shareholders," Chair Patrick Thomas said.
Looking ahead to financial 2023, Johnson Matthey said it expects its operating performance to be in the lower half of the market consensus range, which it put at GBP491 million to GBP641 million, compared to underlying operating profit of GBP559 million, adjusted for business disposals, in financial 2022.
Johnson Matthey set out a series of strategic objectives on Thursday, hailing its platinum group metals services arm as its "backbone". It also targets GBP150 million of cost savings by financial 2025.
A leaner Johnson Matthey will focus on "four businesses enabling the automotive, chemical and energy industries transition to net zero".
On Wednesday, Johnson Matthey said it had invested EUR20 million to take a 4.3% stake in Enapter, as part of a collaboration on Enapter's technology that produces green hydrogen. Enapter is a German and Italian firm whose anion exchange membrane electrolyser extracts hydrogen from water to be used in power generation.
On Tuesday, FTSE Russell had said Johnson Matthey is indicated to return to the FTSE 100 in the quarterly review next month.
By Tom Waite; [email protected]
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