The Times - UK (2021-11-25)

46 2GM Thursday November 25 2021 | the times

Business

a clearout of other non-core businesses,

including the sale of its windscreen-

making division and the planned dis-

posal of its medical devices unit.

The company is slashing planned

capital expenditure for the full year

from the previous plan of “up to

£600 million” to £450 million after the

change of heart on batteries.

MacLeod said he had high hopes of

being able to sell all or parts of the bat-

teries division. He hoped the more than

400 staff would be transferred to the

new buyer or be redeployed to other

parts of Johnson Matthey.

The catalytic converters division,

while heading for extinction with the

internal combustion engine, is a key

part of plans, with the company insist-

ing it would generate £4 billion of cash

over the next ten years.

Braca, a former Tate & Lyle execu-

Need to know

Johnson Matthey boss quits

after missing out on top job

Patrick Hosking, Alex Ralph

The chief executive of Johnson Matt-

hey’s biggest division has resigned after

missing out on the top job. The news

comes just days after the metallurgy

company shocked shareholders by

abandoning ambitious plans to make

electric car batteries.

Joan Braca, head of the catalytic con-

verters division, which accounts for

more than half of group profits, is leav-

ing next month, the company said, as

for the first time it put a price on the bat-

teries U-turn, a write-off of the project’s

entire £314 million value in the books.

Braca had been seen as a potential

successor to chief executive Robert Mac-

Leod, who announced his departure at

the time of the batteries decision. Her

hopes were dashed as the company

named Liam Condon, head of crop

science at Bayer, the German chemicals

group, where Patrick Thomas, the chair-

man, also once worked.

The write-off sent Johnson Matthey

to a pre-tax loss of £9 million for the six

months to September, down from a

profit last time of £26 million. The com-

pany said that the batteries project cost

another £26 million in October and

would continue to burn through cash,

though at a lower speed, until sold.

Share traders wiped more than £1 bil-

lion — or 19 per cent — off the value of

the group this month after it aban-

doned the batteries venture, saying the

industry was becoming commoditised

and its division was too capital-inten-

sive to compete with rivals.

Johnson Matthey yesterday set out

plans for a £200 million share buyback

and lifted the interim dividend by 10 per

cent to 22p as it sought to please dis-

appointed investors. It also announced

tive, has run the division and been on

the main executive committee since

October 2019. MacLeod said of her res-

ignation: “It was her decision, for per-

sonal reasons.” A search for her succes-

sor would begin but this would be a de-

cision for Condon, who takes over in

March. He will also complete a strategic

review of the group with the outcome

pencilled in for May. Thomas told ana-

lysts there would be “no sacred cows.”

However, the company already ap-

pears to have chosen some of its future

priorities, announcing more of a focus

on areas including platinum recycling,

lower-carbon aviation fuel, hydrogen

fuel cells and so-called blue hydrogen

— hydrogen made from natural gas.

On an underlying basis, operating

profit more than doubled to £293 mil-

lion in the half year, ahead of pre-pan-

demic levels driven by higher precious

metals prices and strong demand. Rev-

enue rose 23 per cent to £8.6 billion.

The glass business is being sold to

Fenzi of Italy for £178 million. Talks are

ongoing over the medical business.

MacLeod, 57, said it was a “resilient

trading performance in what has been a

challenging environment, given the

supply chain volatility, which has af-

fected a number of our end markets”.

The shares ended the day down by

47p or 2.2 per cent at £21.35.

Analysts at Investec said that “ques-

tions remain” on how the company “in-

tends to deploy resources to pursue the

opportunities it sees for growth”, in-

cluding in hydrogen technology and

decarbonisation of chemicals.

Johnson Matthey is one of Britain’s

oldest industrial companies and

emerged from the gold and precious

metals markets of the 19th century.

Tempus, page 54

M

ulberry

said

demand

for its

luxury

products is back at pre-

pandemic levels with

sales in the UK and

Asia powering a surge

in revenue as it

prepares to benefit

from the holiday

shopping season

(Hamzah Khalique-

Loonat writes).

The leather goods

retailer, which cut

25 per cent of its staff

last year because of

weak demand, said

sales improved in

October and

November but any

restrictions in the

festive period could hit

its upbeat outlook.

Group revenue in the

six months to

September 25 rose to

£65.7 million, up 34 per

cent, helping Mulberry

Mulberry bags a

profit boost as

sales soar again

to a profit before tax of

£10.2 million compared

with a £2.4 million loss

last year.

The shares gained

68p or 22.5 per cent to

close at 370p. Since

January, the stock has

risen 62.3 per cent.

Thierry Andretta,

the chief executive,

said the company’s

goal is “to continue to

lead the luxury

industry” and he was

“very proud of what

our team has

achieved”, attributing

the turnaround to

sticking to its long-

term strategy of

developing its shop and

online services.

“After having spent a

good period of time

being online, you want

to enjoy returning to

life and a good

customer experience.

With a luxury product,

the sensory experience

Darktrace and Matthey set to drop out of FTSE 100

Just a month after

Darktrace was

promoted to London’s

premier index, the

cybersecurity specialist

is in contention to be

demoted to the FTSE

250 (Jessica Newman

writes).

Shares in the former

tech star have been on

a downward trajectory

since mid-September as

concerns were raised

over the quality of its

products and the size of

its target market as well

as some of its biggest

shareholders offloading

large stakes.

Darktrace could be

demoted from the FTSE

100 after FTSE Russell,

the index provider and

subsidiary of the

London Stock Exchange

Group, reviews

constituents of the

indices next week.

Joining Darktrace

could be Johnson

Matthey, the chemicals

group that plans to exit

its electric battery

business. The U-turn,

revealed earlier this

month, caused shares

to drop nearly 20 per

cent, wiping £1 billion

off its stock market

value to £4.3 billion.

Dechra

Pharmaceuticals, the

veterinary drugs

company and

Electrocomponents, the

distribution group, are

now in the running to

replace the pair in the

FTSE 100.

Petershill Partners,

Goldman Sachs’s private

equity investment

vehicle, which made its

London debut at the

end of September and

Provident Financial, the

sub-prime lender, could

be set to enter the FTSE

250, while AO World

and The Restaurant

Group are at risk of

being demoted from

the mid-cap index.

The formal quarterly

review will take place

using data after the

market closes on

Tuesday; the changes

will be announced the

following day.

The changes are both

reputationally

important, with

promotion to the FTSE

100 giving companies

an enhanced status, and

also impact share

prices, as many funds

track the indices.

Any company falling

to 111th position or

below is automatically

deleted from the FTSE

100, and any company

rising to 90th or above

is automatically added.

1

China will be cut out of future

involvement in developing new

nuclear power stations, Boris

Johnson confirmed yesterday,

saying that a potential adversary

could have no role in Britain’s

“critical national infrastructure”.

Under a deal signed in 2016, the

Chinese state nuclear firm CGN

agreed to invest £6 billion for a

33.5 per cent stake in the Hinkley

Point C plant in Somerset. Page 11

2

Shoppers may struggle to buy

their favourite wines and

spirits this Christmas because

of the shortage of lorry drivers and

freight disruption, the Wine and

Spirit Trade Association says.

Nearly 50 businesses wrote to the

transport secretary urging him to

take “urgent action” to avoid some

drinks “disappearing from

supermarket shelves”. Page 14

3

The members of LV= are

expected to foot a £43 million

bill for the mutual insurer’s

£530 million takeover by an US

private equity firm. LV= has

refused to give details of the fees it

is paying to the City firms working

on its sale to Bain Capital. But an

estimate of the costs is included in

a report drawn up by Milliman, a

consulting firm. Page 45

4

JP Morgan is racing to shore

up its relationship with

Beijing after the boss of

America’s biggest bank joked that

the Wall Street giant would outlast

China’s Communist party. Jamie

Dimon made the quip at a forum

in Boston on Tuesday. Page 45

5

Short-term visas will not solve

labour shortages in the food

industry, the boss of Lidl said,

adding that the retailer was

working “harder than ever before”

to keep shelves stocked. Christian

Härtnagel, UK chief executive,

said that there were labour

shortages “in every corner you

look at the moment”. Page 45

6

The chief executive of

Johnson Matthey’s biggest

division has resigned after

missing out on the top job. Joan

Braca, head of the catalytic

converters division, is leaving next

month, the company said.

7

Mulberry said demand for its

luxury products is back at pre-

pandemic levels with sales in

the UK and Asia powering a surge

in revenue as it prepares to benefit

from the holiday shopping season.

8

New applications for

unemployment benefits

dropped to their lowest since

1969 in the US last week. There

were 199,000 initial jobless claims

in the week to November 20,

according to data released by the

Department of Labor. Page 48

9

Listed companies are issuing

“boilerplate” statements that

fail to offer investors any

insight into company governance,

the Financial Reporting Council

said. Some statements “are seldom

substantiated by actions or

examples” and were useless to

investors. Page 51

10

Stéphane Richard, the

chief executive of Orange,

the French telecoms

group, risks dismissal after being

convicted in connection with a

fraudulent €403 million state

payout to a tycoon. Page 53