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JMAT aims for higher cash conversion levels by 2026

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Steps follow pressure from top investor Standard

Investments

(Adds details on review in paragraphs 4, 10 and 11, share move

in paragraph 7, sector context in paragraph 12)

Jan 27 (Reuters) - British autocatalyst maker Johnson

Matthey ( JMPLF ) said on Monday it would review its executive

pay and cut its capital expenditure in its hydrogen technologies

business to boost its cash following pressure from its top

investor.

The company, which manufactures catalytic converters and

pollution filters for cars, missed analysts' expectations for

first-half revenue and underlying profit late last year, amid a

decline in global vehicle production and a subdued Platinum

Group Metals ( PLG ) trading business.

Standard Investments, the largest shareholder in Johnson

Matthey ( JMPLF ) with an 11% stake, in December urged the group to

initiate a strategic review and overhaul its board.

Johnson Matthey ( JMPLF ) said although the transformation strategy it

set out in March 2022 when Liam Condon took over as group CEO

was "delivering clear results", the board acknowledged that

"further progress is required at pace".

The centuries-old company said it is reviewing the group's

executive remuneration schemes to increase the weighting on cash

generation targets, and formed a new investment committee to

review cash generation.

The "Board fully recognises the need to improve the absolute

share price and to deliver increased returns for shareholders,"

it said in a statement.

Johnson Matthey ( JMPLF ) shares, which have lost about 27% since

Condon took over as CEO, gained 1% in early trade.

New York-based Standard Investments did not comment outside

its business hours.

The company expects cash conversion levels to increase from

about 20%-30% in the 2025 financial year to at least 50% in 2026

and above 80% in subsequent years.

Johnson Matthey ( JMPLF ) said it will not allocate further growth

capital expenditure to the hydrogen technologies division,

spending will be reduced to maintenance levels of no more than 5

million pounds ($6.2 million) each year from 2026.

Companies around the world have increased investments in

green hydrogen, a zero-carbon fuel made by using renewable power

from wind and solar to split water into hydrogen and oxygen, in

their quest for energy which does not add to global warming.

The fuel has been identified as a potentially important way

of decarbonising transport, by powering vehicles with only water

as a by-product.

Standard Investments had urged Johnson Matthey ( JMPLF ) to limit

further investment in hydrogen technologies, including a

potential exit, citing that the division has burnt cash and

continued to generate operating losses.

($1 = 0.8038 pounds)