MARKET REPORT: Johnson Matthey recovers after demand restructuring

Shares in chemicals group Johnson Matthey rallied after its biggest investor branded its bosses “complacent and incapable” and called for a restructuring.

Standard Investments, which owns 11 per cent of the FTSE 250 company, urged the board to launch a strategic review to consider “a sale of part or all of the company”.

In an open letter, the New York-based investor also called for the appointment of non-executive directors to the board.

“Over the past two years, we have engaged directly with the board and management regarding the many challenges facing the company,” a Standard Investments spokesperson said.

‘Despite our patient and constructive approach, the board and management remain complacent and unable to correct a misguided strategy that has led to sustained poor performance. This has created a huge credibility gap between investors and the broader market.”

Shares in the maker of automotive catalytic converters rose 3.3 per cent, or 45p, to 1,397p. But they are still down 16 percent this year and more than 60 percent from their peak in 2018.

“Immediate action must be taken to prevent further degradation of shareholder value,” the Standard Investments spokesperson said.

Russ Mould, investment director at AJ Bell, said: “The market appears to welcome Standard Investments’ intervention and that may indicate the potential for success in its efforts to secure new voices on the board and radically shake up the business.”

The FTSE 100 fell 0.46 per cent, or 38.28 points, to 8,262.05 and the FTSE 250 lost 0.36 per cent, or 76.12 points, to 20,813.03.

Shares in British Airways owner IAG continued to gain height, rising another 1.1 per cent, or 3.2 pence, to 296.4 pence.

That took year-to-date gains to 91 percent and left the stock at the highest level since Covid-19 grounded planes around the world in March 2020.

NatWest also continued its impressive run, rising 0.2 per cent, or 0.7p, to 406.2p.

Bunzl, which supplies everyday products such as toilet paper, disposable cups and helmets, gained 1.1 per cent, or 38 pence, to 3,558 pence after RBC upgraded its shares.

Drugmaker GSK received a boost when its drug Jemperli for the treatment of rectal cancer reached a regulatory milestone in the United States. The stock fell 0.8 per cent, or 10p, to 1,319.5p.

FTSE 100 pharmaceuticals giant AstraZeneca added 0.5 per cent, or 56p, to 10,524p after it appointed René Haas, chief executive of chipmaker Arm, to its board as a non-executive director.

Back in the second tier, biotech company Puretech Health jumped 4.4 per cent, or 7.2p, to 170p after successful trials of its lung disease drug.

But Computacenter fell 3.1 per cent, or 70 pence, to 2,168 pence after announcing that chief financial officer Christian Jehle would resign with immediate effect.

Camera and film company Videndum fell 19.9 per cent, or 51p, to 205p after warning that “the recovery of our markets remains slower than expected”. Last year’s Hollywood strikes took a toll on the company.