The new global parent behind Dundee battery-maker Axeon says it will snap up more expertise in the sector as it strives to steer a new course in the electric car market.
Chemical and precious metals group Johnson Matthey, which bought the West Gourdie-based firm in October for just over £40 million, said it would seek more acquisitions as it aims to grow the new business.
The statement of intent came as the multinational revealed revenues fell by 11% to £10.7 billion during the year to the end of March. Pre-tax profits fell 13% to £354.9m after exceptional charges for restructuring and impairment of assets.
Johnson Matthey chief executive Neil Carson said his firm had struggled in a challenging year and would face 12 months of transition and headwinds including the loss of contracts and lower prices for precious metals.
But he stressed the group’s positive prospects in the medium and longer term, and highlighted the opportunity presented by new rules designed to reduce pollution caused by vehicles.
“In the medium term, growth is expected to accelerate in 2014/15 and beyond, driven particularly by tighter vehicle emissions legislation and demand for Process Technologies products, especially in China,” Mr Carson said.
“We are confident that our long-term market drivers will enable Johnson Matthey to deliver continued growth, which will be further enhanced by our ongoing investment in R&D and new business development.”
The group said its new battery technologies business formed following the combination of its research and development activity and the newly-acquired Axeon was focused on developing new advanced technologies.
“Whilst the market for these batteries continues to grow strongly in some markets, in others, for example automotive, the performance of today’s battery chemistry continues to be a limiting factor,” it said.
“This provides opportunities for technology development to address the challenges for these markets.
“Johnson Matthey’s capabilities in materials science fit well with Axeon’s understanding of the applications engineering of battery systems, and the integration of Axeon into the group is progressing well.”
Research is focused on improving the chemical compounds used in batteries, to increase their range and commercial viability. It is expected that electric vehicles will becoming much more attractive to drivers when new lithium ion cells enter the market.
“During the year we have expanded our R&D efforts and work is under way to add further laboratory facilities for materials testing and cell prototyping,” Johnson Matthey said.
“We are also pursuing other bolt-on acquisition opportunities to further enhance our position in this market.”
Johnson Matthey said the segment made a small loss in the year, but delivered sales of £31m primarily in the power tools and electric bikes markets.
As The Courier revealed last month, Axeon developed and built the battery pack used in the new McLaren P1 hypercar from its base in Dundee and has worked with a string of other manufacturers on prototype vehicles.
The firm employs around 70 people at its Dundee facility, and a further 450 in manufacturing in the Polish city of Gliwice.
Johnson Matthey will recommend a 4% increase in the shareholder dividend, to 57p per ordinary share, as a reflection of its confidence in its medium-term prospects.