Shares in FTSE 100 chemicals group Johnson Matthey (JMAT) gained 1.2% to £32.24 after it revealed a number of ‘significant strategic developments’ in the commercialization of its battery material for electric vehicles.

The firm has partnered with Finnish Minerals Group to support development of a second commercial plant in Finland to develop its enhanced lithium nickel oxide (eLNO) battery, which it hopes will disrupt the electric vehicle battery market.

It also secured a ‘long term sustainable supply’ of the ‘critical raw materials’ for eLNO, having signed a term sheet for the supply of nickel and cobalt from Nornickel and an agreement for the supply of lithium hydroxide from SQM.

Johnson Matthey chief executive Robert MacLeod said the deals were ‘important milestones on our journey towards developing a sustainable battery materials ecosystem and further demonstrate the progress we are making on the commercialisation of our business.’

POTENTIAL £2 BILLION HEALTH BUSINESS SALE

While also looking at areas like hydrogen, the firm is pinning its hopes on eLNO being a significant driver of growth in the long-term as it gradually shifts away from the Clean Air division – catalytic converters for cars – that currently makes up the majority of its revenues.

Johnson Matthey said in an update earlier this month that it was reviewing its portfolio to ‘focus on areas of greatest opportunity to maximise value for our shareholders.’

It also announced it was undertaking a strategic review of its health business amid reports it could sell the division, which could be worth around £2 billion. The division provides a range of products for the pharmaceutical industry as well as medical device components.

Full year results to 31 March 2021 are due on 27 May, and the firm said in its update a fortnight ago that it expected its results to come in at the top end of expectations.

Consensus forecasts for underlying operating profit are around £469 million for the current year, below last year’s £539 million, with pandemic-related disruptions in the first half of the year mainly responsible for the fall in profits.

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Issue Date: 19 Apr 2021