Rolls-Royce Holdings Plc, Europe’s largest maker of aircraft engines, announced the surprise departure of aerospace chief Mark King just four months after handing the 26-year company veteran a larger portfolio.
King, 48, “has decided to resign” and will go in June, replaced by Tony Wood, head of the ship-engine business, Rolls-Royce said in a statement. Lawrie Haynes takes on responsibility for the marine unit while remaining head of nuclear energy.
King joined London-based Rolls in 1986 and became head of the newly combined commercial and military aerospace business only in January after previously heading civil activities. His replacement Wood was hired from landing-gear maker Messier-Dowty in 2001 and has had stints in both aircraft-engine units.
“King’s leaving is a surprise given his recent promotion, but it seems to be for personal reasons,” said Oliver Sleath, a London-based analyst at Credit Suisse. “Those below him running day-to-day operations are remaining so it should not be disruptive to Rolls-Royce.”
Rolls-Royce declined as much as 19 pence, or 1.7 percent, to 1,114 pence in London. The stock has gained 28 percent so far this year, valuing the company at 21 billion pounds ($33 billion).
Rolls-Royce reiterated its guidance today for “good growth” in underlying profit for 2013 after first-quarter trading matched expectations. The company commented ahead of an annual investor meeting at which Ian Davis, senior adviser at private equity firm Apax Partners LLP, succeeds Simon Robertson as chairman.
The management shuffle comes as Rolls continues a review of anti-corruption practices after last year alerting the U.K. Serious Fraud Office to potential wrongdoing in activities in Asia. The company plans to tighten controls over sales agents. Rolls-Royce today named Iain Conn chairman of the ethics committee, taking over from Ian Strachan, who has stood down.
Chief Executive Officer John Rishton has broadened the product portfolio with the acquisition yesterday of closely held Hyper-Therm High Temperature Composites Inc. of California for an undisclosed sum. Rolls also said April 23 it would sell its half of the RTM322 helicopter-engine venture to partner Safran SA for 293 million euros ($385 million) by the year’s end.
Hyper-Therm specializes in materials such as ceramic matrix composites, one-third the density of nickel super alloys and able to withstand higher temperatures, which Rolls plans to use in applications spanning aircraft engines to energy turbines.