Rolls-Royce investors backed a change at the top of the engines giant today following chief executive John Rishton's decision to stand down.
He will be replaced by Warren East, who transformed chip designer ARM Holdings into a global firm responsible for the technology behind nearly all mobile phones and many other electronic devices.
Mr East left Cambridge-based ARM in 2013 after nearly 12 years at the helm and is already on the board of Rolls following his appointment as a non-executive director in January last year.
The appointment comes after a year in which defence spending cuts and falling commodity prices caused Rolls to report its first fall in revenues for a decade. Underlying profits were 8% lower at £1.62 billion in 2014 and Rolls has warned that the figure is unlikely to improve in 2015.
The difficult trading conditions also prompted the company to announce 2,600 job losses, including a significant number in the UK. It has major bases at Bristol and Derby.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said the change in leadership provided investors with "renewed optimism".
He added: "Mr East brings his previously successful track record at ARM Holdings and should help to ease current shareholder concerns."
Shares were 3% higher today as Rolls highlighted Mr East's "proven strategic and leadership skills".
Chairman Ian Davis said: "He is an engineer by training; he has a deep understanding of technology and of developing long-term partnerships."
Mr Rishton, who was appointed chief executive in 2011 and will step down on July 2, said it was "time for a change in lifestyle".
He added: "We have made good progress transforming Rolls-Royce and have a strong team in place.
"While there is clearly more to do, the company is better placed to face the future. I am sure Warren will lead the business successfully through the next phase and I wish him and everyone at Rolls-Royce well."
Mr Rishton was recently buoyed by the company's biggest-ever order when Dubai-based airline Emirates signed a contract worth 9.2 billion dollars (£6.1 billion) for Trent engines to power 50 Airbus A380 super jumbos that will enter service from 2016.
During his tenure profits have increased by 69%, the order book has grown by 24% and the share price has risen 63%.
Mr East said: "I have a strong desire to return to an executive position with the energy and enthusiasm a role like this demands.
"The markets which Rolls Royce serves and the technology it deploys are fascinating. This is a wonderful opportunity and I am very much looking forward to leading this remarkable company."
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