Sir Ralph departs Rolls-Royce with blistering attack on City

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The Independent Online

Sir Ralph Robins yesterday launched a broadside against the short-termist attitudes of the City as he announced plans to retire as chairman of Rolls-Royce after almost half a century with the aeroengine manufacturer.

Sir Ralph, an engineer who joined Rolls as a graduate apprentice in 1955, said he intended to step down in the next 12 months. The search has begun for a non-executive chairman from outside the company to replace him.

He said his greatest disappointment was that the company had never been properly valued by the financial markets. In the 10 years that Sir Ralph has been chairman, Rolls' shares have underperformed the All Share Index by nearly 40 per cent. Rolls suffered the indignity of being ejected from the FTSE 100 index in August, 2000 after issuing its first ever profit warning but regained its place six months later.

"I would much prefer to have seen a higher share price," said Sir Ralph. "The disappointing thing is that people today want very quick returns but this is a long-term business. We are the last engineering company in this country that is global and can take on the world but sadly that is not reflected in the share price."

Sir Ralph, who is 70, has already announced his retirement as a non-executive director of the fund management group Schroders and there is speculation he will also relinquish the chairmanship of Cable & Wireless this year.

He denied that he had been under any pressure from Rolls' shareholders to step down as chairman and rejected suggestions that he may have clung on to the job for too long. Sir Ralph said it would be nice to stay on at Rolls in some capacity after he retires as chairman, but he added: "I would not like to do anything which led me in any way to interfere with my successor."

Lord King and Sir Iain Vallance both took the honorary titles of president emeritus after they stood down from the chairmanships of British Airways and BT respectively while Lord Weinstock remains chairman emeritus of Marconi, the group he founded and which changed its name from GEC.

Sir Ralph maintained that all the acquisitions Rolls had made since he became chairman in October, 1992 had been successful. But he admitted that the £300m takeover of Northern Engineering Industries in 1989 had not been a success. At the time it looked like a sensible investment to widen the base of the group but it is true to say that some of the businesses we bought had too low a market share for us to lift them."

News of his departure came as Rolls surprised the City by reporting better-than-expected results for last year. Pre-tax profits for 2001 rose by 9 per cent to £475m. The figures lifted Rolls' shares, which ended the day 7 per cent higher at 182.25p.

John Rose, the chief executive, said that Rolls' civil engine business had ended the year better than expected. However, he stuck to the forecast made last October in the wake of the 11 September attacks that civil engine deliveries would fall by a third this year to 900. Rolls expects civil engine profits this year to fall by slightly more than half last year's £347m figure. Of the 6,000 job cuts announce last October, two-thirds will be completed by the end of this month.