Industrial group Johnson Matthey has hinted it could offload its health arm, as the business focuses on ways to “maximise value for our shareholders”.
In an update today the group revealed it is carrying out a “strategic review” of its health business.
Robert MacLeod, chief executive of Johnson Matthey, made clear the review was about maximising value for shareholders.
“We have commenced a strategic review of Health, as we continue to focus resources to maximise value for our shareholders,” he said.
“As the world builds back greener following the pandemic, we have an important role to play in helping society address climate change through our sustainable technologies, and we remain focused on commercialising these and delivering our growth ambitions.”
Johnson Matthey’s health business is worth about £2bn, according to reports.
Hargreaves Lansdown equity analyst Laura Hoy said the potential sale could be used to ramp up its electric vehicle transition.
“The shift toward a more sustainable future hasn’t been lost on JMAT, whose bread and butter is making catalytic converters to strip emissions from traditional car exhausts.
“With the transition to electric vehicles well under way, the devices could eventually become obsolete and that’s prompted the group to embark on a major strategy shift.”
The group’s full year results are due in May, however the business today said it expects the results to come in at the top end of expectations.
Consensus forecasts for underlying operating profit are around £469m for the current year, slightly below last year’s £539m, with Covid-19 disruptions in the first half of the year mainly responsible for the dip in profits.