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Is there such a thing as a niche conglomerate? Speciality chemical maker Johnson Matthey thinks so. Boss Robert MacLeod hoped to squeeze more profitability from its four divisions via a recent restructuring. More is certainly needed.

In fairness, Mr MacLeod does aim to lift earnings growth and profitability. Its vehicle emissions catalyst unit, part of the Clean Air division, delivers most of the profits, with other chemicals including specialist drugs filling the balance. It trades very cheaply on a 15 times price multiple of forward earnings versus close European peers such as Clariant and Umicore.

During September’s strategy day Mr MacLeod made some bold pronouncements. Return on invested capital would rise 3 percentage points to 20 per cent, led by mid to high single digits earnings per share increases, though without a clear target date. Johnson Matthey also announced plans to build a factory to make specialist battery materials. While the shares jumped initially, they have since lost momentum. Tuesday’s half-year earnings report did not deviate from previous company profit guidance, yet the shares fell another 3 per cent.

Jumping into new battery technologies will turn heads, but will also result in a couple of years of negative or low free cash flow, on Liberum’s estimates. A new plant will cost £200m alone. Add to that other investments, plus more research and development for its Health division to find some new pharmaceutical ingredients to support its mature opiate pain relief business. Given the smallish scale of this unit, that will surely take years. Returns on capital here are half the group average.

Johnson Matthey’s niche has widened into a rut. Earnings may well pick up, supported by short-term cost cuts. Yet expecting these to rise quickly out of the shade and provide extra cash flow for dividends looks hopeful. Johnson Matthey could do worse than moving away from healthcare in order to lift its returns on capital.

Lex recommends the FT’s Due Diligence newsletter, a curated briefing on the world of mergers and acquisitions. Sign up at ft.com/newsletters.

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