Rolls-Royce shares rev 4 per cent as chief executive John Rishton retires

Shares in the company rose more than 4 per cent to 1,048p after the announcement

The deal to supply 220 engines for 50 A380 planes will secure jobs at four big Rolls-Royce factories (PA)

Rolls-Royce’s chief executive, John Rishton, has quit the British engineering giant, saying it was “time for a change in lifestyle”.

Mr Rishton, who has been criticised by some investors over company strategy, is to be replaced by Warren East, the former chief executive of Arm Holdings. Mr East, who joins in July on a £4.5m package, has been a non-executive director at Rolls since January.

“After 14 year in executive roles, I feel it’s time for a change,” Mr Rishton said, referring also to his time as British Airways finance director from 2001-05. “I know people will speculate but it’s my decision.”

Shares in the company rose more than 4 per cent to 1,048p after the announcement, indicating that the City welcomed the change.

Mr Rishton succeeded Sir John Rose in 2011 but has endured a mixed spell in charge.

Although shares in Rolls-Royce have risen 20 per cent this year, his reign has coincided with a string of profit warnings and jobs cuts – 2,600 of which were announced last November to round off what analysts described as an “annus horribilis”.

Rolls is also being investigated by the Serious Fraud Office over allegations of corruption in Indonesia and China and was dragged into a bribery scandal involving Brazil’s state oil producer Petrobras in February, when it was accused of using back-handers to win a $100m (£65m) contract.

Roger Johnston, an analyst at Edison, said: “The group has undergone significant change during that period but it has not been plain sailing, with the heavy investment in the Trent XWB [aero engine] and the pause in revenue growth providing headwinds. We are therefore not surprised by the move.”

Rolls’ chairman, Ian Davis, said that he was “disappointed John is retiring”.

Mr East has been credited with overseeing Arm’s development into one of Britain’s leading tech firms, with clients including Apple and Samsung.

He 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.”

It has not been all doom and gloom for Rolls-Royce. Last week, the company announced a £6.1bn deal to supply 220 engines for 50 Emirates airline A380 planes.

The Dubai-based Emirates will receive the first planes fitted with the new engines in 2016; up to now the airline has used General Electric and Pratt & Whitney engines on its 90-strong fleet of double-decker airliners.