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Business News

Rolls-Royce lifts profits and signs up chairman

Rolls-Royce gave its shareholders a double boost by announcing a jump in profits and a new heavyweight chairman to navigate the first allegations of corruption in the company's 106-year history.

The jet-engine maker has appointed Ian Davis, a former head of the McKinsey consultancy and now a non-executive director of BP and Johnson & Johnson, to replace Sir Simon Robertson as chairman. It also announced a 24 per cent leap in profits for 2012 to £1.4bn, as a strong performance in its key civil aerospace business pushed up revenues by 8 per cent to £12.2bn.

Rolls-Royce warned in December, after an internal inquiry, that it may face bribery and corruption charges in China and Indonesia. It passed the details of the inquiry on to the Serious Fraud Office (SFO), which is deciding whether to launch a formal investigation. The company reiterated that the outcome "could include the prosecution of individuals and the company". Mr Davis' first task will be to steer Rolls through the crisis.

"Ian has experience under a raft of different circumstances," said chief executive John Rishton, who highlighted his experience in dealing with "challenging situations" such as the 2010 BP oil spill in the Gulf of Mexico.

The brothers Davis

Rolls-Royce's new chairman is one of four high-flying brothers. Ian Davis, was the first Briton to head the consultants McKinsey while his older brother Sir Crispin Davis was chief executive at the Anglo-Dutch publishing giant Reed Elsevier. Ian's twin brother, Sir Nigel Davis, became a High Court judge in 2001 and is now a Law Lord while James Davis was a senior partner at the "Magic Circle" City law firm Freshfields with clients such as Cinven, Compass and LogicaCMG.