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- Standard has an 11% stake in catalytic converter maker Johnson Matthey
Johnson Matthey’s largest shareholder has denounced that the chemicals specialist’s response to requests for the replacement of its board of directors is “totally insufficient.”
Industrial investor Standard Investments, which has an 11 per cent stake in Johnson Matthey, has been pressuring the company to appoint new directors.
He claimed this would stop the “significant destruction of value” that has occurred under current management.
On Christmas Eve, Johnson Matthey responded by saying its board possessed a “strong mix of skills and experience” that could support management while offering “the right rigor and challenge.”
It said three of its seven non-executive directors had arrived in the past three years, while a new finance director would join in “the coming months”.
The catalytic converter producer also announced the creation of an investment committee that would “periodically evaluate whether alternative options to the status quo exist to maximize value.”
Leadership: Johnson Matthey’s largest shareholder, Standard Investments, has denounced the chemicals specialist’s response to calls to replace its board as “wholly insufficient”
However, Standard said on Tuesday that this idea was “wholly insufficient” and did not sufficiently address “the many serious issues” raised in its December 16 letter.
“Indeed, this only underlines the continued lack of urgency and inability of the current board to do what is necessary to turn Johnson Matthey around and help him realize his potential,” the firm added.
‘We have retained legal, representation and other advisors as we plan to actively engage with other shareholders. We also look forward to a more substantial response to our most recent letter.’
Standard’s December letter noted that only one new independent director had joined Johnson Matey’s board since November 2021, when it announced its intentions to sell its battery materials business.
It also recommended Johnson Matthey de-risk or sell its hydrogen technologies division, saying it “faced a similar fate” to its battery materials segment.
Johnson Matthey sold the latter division in 2022 for just £50 million due to tough competition and low returns on investment.
Standard also wants the company to carry out a strategic review that could involve a full or partial sale of the entire business.
In its latest half-year results, Johnson Matthey revealed that turnover fell by around £900 million to £5.6 billion, while its underlying pre-tax profits fell 4.3 per cent to £133 million. .
The London-based manufacturer said a “challenging macroeconomic backdrop” had hurt trade, and that a drop in global vehicle production hit its clean air segment.
Meanwhile, a weaker vehicle scrap recycling market hurt the company’s platinum group metals division.
However, Johnson Matthey maintained its full-year outlook and said it expects a stronger result in the second half as the benefits of its “transformation programme” filter through.
Johnson Matthey shares They were down 0.4 per cent at £13.46 early on Tuesday afternoon, meaning they have lost around 18 per cent in the last 12 months.
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