(Alliance News) - Johnson Matthey said Thursday that after a detailed review it has concluded that the potential returns from its Battery Materials business would not "be adequate to justify further investment".
"Whilst demand for battery materials is accelerating, so is competition from alternative technologies and other manufacturers. Consequently this is rapidly turning into a high volume, commoditised market," it said.
Johnson Matthey said it has decided to pursue the sale of all or parts of the business with the intention of exiting "swiftly".
"This decision will allow us to accelerate our investment and focus on more attractive growth areas, especially where we have leadership positions such as in hydrogen technologies, circularity and the decarbonisation of the chemicals value chain," said Chief Executive Robert MacLeod.
Johnson Matthey also said MacLeod will retire early next year, with Liam Condon hired to succeed him. MacLeod will step down in February after eight years and will stay on until July to help with the transition.
Condon, who will join as CEO March 1, is currently a member of the board of management of Bayer and president of its Crop Science Division, a role he has held for nine years.
Johnson Matthey said half-year results - to be released on November 24 - will be in line with market expectations, but full-year results will be at lower end of expectations. It cited supply chain shortages for its auto industry customers and labour shortages in the US hurting its Health business.
Johnson Matthey shares were down 11% in early trade Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 7,361.36
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Hang Seng: closed up 1.0% at 25,251.05
Nikkei 225: closed up 0.5% at 29,255.02
DJIA: closed down 240.04 points, 0.7%, at 36,079.94
S&P 500: closed down 0.8% at 4,646.71
Nasdaq Composite: closed down 1.7% at 15,622.70
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EUR: down at USD1.1479 (USD1.1529)
GBP: down at USD1.3407 (USD1.3492)
USD: up at JPY114.01 (JPY113.86)
Gold: down at USD1,855.55 per ounce (USD1,856.96)
Oil (Brent): down at USD82.70 a barrel (USD84.12)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
Canada and France Armistice Day holiday. Toronto and Paris markets open.
1100 GMT Ireland consumer price index
1230 GMT UK NIESR monthly gross domestic product tracker
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UK economic growth lost momentum in the third quarter of 2021, compared to the second quarter when many lockdown restrictions had been lifted, according to the Office for National Statistics on Thursday. On an annual basis, the UK economy grew 6.6% in the third quarter, slowing sharply from 24% in the second quarter. The latest reading missed the market forecast, cited by FXStreet, of 6.8%. UK gross domestic product advanced 0.6% in September, picking up pace from 0.4% in August. The September print beat the market estimate of 0.4%. On a quarterly basis, UK GDP rose by 1.3% in the three months to September - weaker than the 1.5% expected by economists.
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Separately, the ONS said the UK recorded a trade deficit of GBP2.8 billion in September, narrowed from from GBP3.7 billion in August.
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A growth in inquiries from UK house-hunters in October is yet to translate into a pick-up in sales, according to surveyors. Despite an overall net balance of 10% of property professionals reporting an increase in new buyer inquiries, estate agents only have 37 UK properties on their books on average, down from around 42 in March, the Royal Institution of Chartered Surveyors said. A balance of 20% of contributors reported a fall in the number of new properties being listed for sale. Property professionals indicated there had been a dip in the number of sales agreed over the month, with the main issue being a lack of stock, Rics said.
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Producer prices grew in Japan in October compared to the month before and on an annual basis, preliminary data from the Bank of Japan showed. Producer prices were 1.2% higher in October when compared to the prior month, after rising by 0.3% in September from August. Annually, prices grew 8.0% in October, compared to a 6.3% increase in September and 5.5% growth in August.
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Beijing authorities have sealed off a mall and locked down several residential compounds over a Covid flare-up, as the latest outbreak spread to the Chinese capital's central districts. China has largely curbed widespread transmission of the coronavirus through snap lockdowns, mass testing and travel restrictions, but authorities are on high alert after a nationwide spike linked to domestic travel in the past month. Six new cases were found in Beijing's central districts of Chaoyang and Haidian Thursday morning, local media reported, all close contacts of people infected recently in northeastern Jilin province. Raffles City mall in Dongcheng – also a central district in the capital – was sealed off Wednesday evening after a close contact of a person with Covid-19 was found to have visited the mall, the Beijing Youth Daily reported. Its exits were closed, and all staff and customers inside were not allowed to leave until they got tested.
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BROKER RATING CHANGES
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JPMORGAN RAISES SHAFTESBURY TO 'NEUTRAL' ('UNDERWEIGHT') - TARGET 630 (550) PENCE
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JPMORGAN RAISES CAPITAL & COUNTIES TO 'NEUTRAL' ('UNDERWEIGHT') TARGET 180 (165) PENCE
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PEEL HUNT RAISES ASOS TO 'BUY' ('ADD') - TARGET 5,000 PENCE
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COMPANIES - FTSE 100
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Luxury retailer Burberry said it made strong progress in the first half helped by performances from the Americas, mainland China and South Korea. For the 26 weeks to September 25, revenue jumped 38% to GBP1.21 billion from GBP878 million last year. Operating profit surged to GBP207 million from GBP88 million, and pretax profit more than doubled to GBP191 million from GBP73 million. "Regionally, full-price sales almost doubled in the Americas, South Korea grew almost 80%, and Mainland China was up over 40% even as wide-reaching regional lockdowns and extreme weather impacted our performance in August in particular," Burberry said. Burberry declared an interim payout of 11.6p per share having paid none in prior year due to the pandemic. Looking ahead, Burberry maintained medium-term guidance for high single-digit top line growth. "We have made strong progress in the half. Full-price sales are growing at a double-digit percentage, driving margin expansion and strong free cash generation. We are seeing an acceleration in performance in countries less impacted by travel restrictions," said Chair Gerry Murphy.
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B&M European Value Retail said it performed strongly throughout the first half of its financial year as its pandemic popularity continued. For the 26 weeks to September 25, revenue increased by 1.2% to GBP2.27 billion from GBP2.24 billion last year and pretax profit rose 2.4% to GBP241.4 million from GBP235.6 million. B&M declared an interim dividend of 5.0 pence up 16% from 4.3p paid last year. "We have responded decisively to supply chain challenges by leveraging our strong supplier relationships, and we have improved in-store execution. As a consequence, we are fully stocked heading into the Golden Quarter, with stores already showcasing our excellent Christmas ranges," said CEO Simon Arora.
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COMPANIES - GLOBAL
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Zurich Insurance said its Property & Casualty premium rise in the first nine months of 2021 was driven by both retail and commercial insurance growth. In the first nine months of 2021, the Swiss insurance firm's Property & Casualty gross written premiums increased 14% to USD31.15 billion from USD27.26 billion. The growth was attributed to higher premium rates, driven by increases in commercial insurance across all regions. Zurich noted its North American crop insurance business contributed about two percentage points to growth as a result of higher prices for agricultural commodities. Zurich also pointed to elevated catastrophe losses in the period, which include the major flooding in Germany and a series of other weather events in Europe in July, and Hurricane Ida in the US in August.
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Boeing has reached a settlement with the families of 157 people killed when a 737 Max aircraft crashed in Ethiopia in March 2019. The plane manufacturer has accepted responsibility for Ethiopian Airways flight 302 losing control shortly after take-off from Addis Ababa Bole International Airport. The plane crashed into a nearby town. There were no survivors. At the time, it was the second crash to involve a Boeing 737-Max aircraft in six months. After the Ethiopian crash, US authorities grounded the 737 Max until Boeing could fix the plane's faulty software. In its settlement, Boeing admitted that its software was to blame for ET 302's loss of control and destruction, and that the 737 Max was in an "unsafe condition" to fly. Boeing's 737 Max were recertified to start flying again earlier this year.
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Thursday's Shareholder Meetings
Artemis Alpha Trust PLC - GM re share buyback policy
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By Tom Waite; thomaslwaite@alliancenews.com
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