Published May 02, 2013
LONDON – Britain's Rolls-Royce on Thursday announced the shock departure of Mark King, the highly regarded boss of its key aerospace business.
Rolls, the world's second-largest maker of aircraft engines behind U.S. group General Electric , on Thursday said King, the president of its aerospace unit had decided to resign from the company at the end of June and would be replaced by Tony Wood, the president of Rolls' marine unit on May 13.
King joined Rolls in 1986 and was appointed president of its civil aerospace business in August 2007 and then president of aerospace in January 2013 when Rolls' civil and defense businesses were brought together to create one aerospace division.
Jefferies analyst Sandy Morris said King was "a highly regarded member of the management team ... reflected in the perceptions of investors and analysts alike" and that his departure was "not going to pass unremarked".
Morris said he assumed King was leaving Rolls "for personal reasons".
Aerospace accounted for 8.8 billion pounds of the group's 12.2 billion pounds of revenues in 2012.
Late last year Rolls said it could face prosecution after Britain's Serious Fraud Office ordered it to conduct an internal inquiry into possible bribery and corruption by intermediaries in China, Indonesia and other overseas markets.
The FTSE-100 firm has hired lawyer David Gold to lead a review of its compliance procedures after the allegations emerged. Gold started his review in February.
Rolls, a major British exporter which dates back to 1884, said it was on track to report good growth in underlying profit in 2013 after a strong first quarter from its civil aerospace unit. Last month it won a $1.6 billion order from IAG for Trent XWB engines to power 18 of its new Airbus A350 long-haul jets.
The company is expected to report an average 2013 pretax profit of 1.74 billion pounds, according to a Thomson Reuters I/B/E/S poll of 18 analysts.
The group also expects to deliver modest growth in annual underlying revenues with cash flow around breakeven.
Shares in Rolls-Royce, which have risen 30 percent so far this year, closed at 1,133 pence on Wednesday, valuing the firm at around 21.2 billion pounds.
(Reporting by Rhys Jones; editing by Neil Maidment and Paul Sandle)