Shares in Johnson Matthey PLC (LSE:JMAT) plunged by almost 16% after the chemicals company issued a profit warning for the current year and also announced that chief executive Robert MacLeod is stepping down and that it plans to sell its battery materials business.
The chemicals group said the trading outlook for the year to March 2022 is towards the lower end of market expectations due to supply chain shortages affecting the automotive industry and precious metals prices.
In addition, acute labour shortages in the US are having an adverse impact on its health business, which is subject to a strategic review.
First-half results will be in line with market expectations, the group added
The profit warning accompanied a statement that Johnson Matthey is planning to sell its battery materials business, as the group does not believe the potential returns from the operations justify further investment.
The company said it is facing strong competition in the battery materials market and believes its capital intensity is too high compared with other more established large scale, low cost producers.
The group also announced that chief executive Robert MacLeod is retiring after eight years in the role and will be succeeded by Liam Condon, who will take up the position on 1 March 2022.
Condon has been a member of the board of management at Bayer AG (ETR:BAYN, OTC:BAYZF) and president of the German group’s crop science division since 2016. He is also responsible for Bayer’s Latin America and Africa regions.
Commenting on the planned exit from the battery materials business, MacLeod said the 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”.
Shares slumped by 15.93% to 2,323.00p in late morning trade.