Johnson Matthey to review government pay, cut spend | Inventory Information
(Reuters) -British autocatalyst maker Johnson Matthey (LON:) mentioned on Monday it will review its government pay and cut its capital expenditure in its hydrogen applied sciences business to spice up its money following strain from its prime investor.
The company, which manufactures catalytic converters and air pollution filters for vehicles, missed analysts’ expectations for first-half income and underlying revenue late final yr, amid a decline in international vehicle manufacturing and a subdued Platinum Group Metals trading business.
Customary Investments, the biggest shareholder in Johnson Matthey with an 11% stake, in December urged the group to provoke a strategic review and overhaul its board.
Johnson Matthey mentioned though the transformation strategy it set out in March 2022 when Liam Condon took over as group CEO was “delivering clear results”, the board acknowledged that “further progress is required at pace”.
The centuries-old company mentioned it’s reviewing the group’s government remuneration schemes to increase the weighting on money technology targets, and fashioned a new investment committee to review money technology.
The “Board fully recognises the need to improve the absolute share price and to deliver increased returns for shareholders,” it mentioned in a assertion.
Johnson Matthey shares, which have misplaced about 27% since Condon took over as CEO, gained 1% in early trade.
New York-based Customary Investments didn’t remark exterior its business hours.
The company expects money conversion ranges to increase from about 20%-30% within the 2025 financial yr to at the very least 50% in 2026 and above 80% in subsequent years.
Johnson Matthey mentioned it won’t allocate additional growth capital expenditure to the hydrogen applied sciences division, spending can be decreased to upkeep ranges of no more than 5 million kilos ($6.2 million) annually from 2026.
Firms across the world have elevated investments in inexperienced hydrogen, a zero-carbon fuel made by utilizing renewable energy from wind and photo voltaic to separate water into hydrogen and oxygen, of their quest for power which doesn’t add to international warming.
The fuel has been recognized as a doubtlessly important method of decarbonising transport, by powering autos with solely water as a by-product.
Customary Investments had urged Johnson Matthey to restrict additional investment in hydrogen applied sciences, together with a potential exit, citing that the division has burnt money and continued to generate working losses.
($1 = 0.8038 kilos)
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