Rolls-Royce Shakes Up Management to Boost Growth

By Ian Walker

LONDON--Engine maker Rolls-Royce Holdings PLC on Wednesday announced an overhaul of its senior management as it seeks to drive longer-term growth following a series of profit warnings.

London-based Rolls-Royce, which makes aircraft engines for Boeing Co.and Airbus Group SE widebody jets, said that from Jan. 1 it will operate as five market facing businesses, with the presidents of Civil Aerospace, Defense Aerospace, Marine, Nuclear and Power Systems reporting directly to the chief executive.

The current divisional structure of Aerospace and Land & Sea will end, removing a layer of senior management, the firm said.

"The changes we are announcing today are the first important steps in driving operational excellence and returning Rolls-Royce to its long-term trend of profitable growth. This is a company with world-class engineering capability, strong market positions and exceptional long-term prospects," CEO Warren East said.

As part of these changes Tony Wood, currently president of aerospace, has decided to leave the company and Lawrie Haynes, currently president of Land & Sea, has decided to retire, Rolls-Royce said. Both will remain with the business into 2016 to assist with the transition to the new structure, it said.

Last week one of Britain's best known long-term investors exited his holding in Rolls-Royce citing a lack of confidence in the prospects of the British engine maker. The disclosure prompted the worst selloff in 15 years.

Neil Woodford, a highly regarded British investment fund manager, who has held Rolls-Royce stock for almost a decade, said his CF Woodford Equity Income Fund and the Woodford Patient Capital Trust fund have sold their Rolls-Royce shares.

Mr. Woodford was Rolls-Royce's 12th largest investor with 1.6% of the stock, according to FactSet. It held almost 35 million shares at one point this year. Mr. Woodford said he would consider reinvesting in Rolls-Royce if it turned out the caution in the business was misplaced.

Last month the company warned investors it may cut its dividend.

Shares closed Tuesday at 540 pence and are currently down over 31% in the past 12 months.

Robert Wall contributed to this article.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

December 16, 2015 02:44 ET (07:44 GMT)

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