London-listed chemicals firm Johnson Matthey (JM) said on Monday it would cut its capital expenditure in hydrogen technologies as part of new strategic actions to boost its cash and efficiency.

The decision comes after its largest shareholder, Standard Industries, called on the company to de-risk and/or exit hydrogen technologies back in December. At the time, Standard, which owns an 11% share in the firm, said capital was poorly allocated to “unproven” growth businesses.

Now, JM says it will not allocate further growth capital expenditure to the hydrogen technologies unit, with spending to be reduced to “maintenance levels” of no more than £5 million ($6.2 m) each year from 2026. The unit is on track to break even by the end of the financial year 2025-2026, Kallanish notes from a company statement.

“The sharp acceleration and then deceleration of the hydrogen sector has posed an industry-wide challenge,” the company says. “In 2024, the board adapted its strategy for this business to reflect the market slowdown, and has undertaken significant actions to reduce cash costs, while maintaining its technology advantage to capture the opportunity in the longer term.”

Last May, JM scaled back its investments in hydrogen from 30% of the company’s three-year capex guidance to 10%. The board is currently also pursuing options to “further de-risk” the hydrogen unit.

Meanwhile, the company has formed a new investment committee to “reinforce both cash generation and disciplined and measured deployment of capital.” It is also reviewing the group’s executive remuneration schemes.

“Pressure (& historical involvement) from Standard Investments, a large shareholder, remains, in our view, a key support to the investment case, either by improved operational performance and cash delivery or potential take-out,” writes Jefferies analysts in a note.

JM produces hydrogen catalysts, electrolysers, fuel cells, and carbon capture and storage equipment. Its shares were up 1.67% at the time of writing.