Boss Of ARM Holdings plc To Retire In July
The shares of ARM Holdings (LSE: ARM) (NASDAQ: ARMH.US) slipped 18p, or 2%, to 903p during early London trade this morning after the microchip designer revealed its chief executive is to retire later this year.
The FTSE 100 member said Warren East, who joined the company during 1994, would retire on 1 July. He will be replaced by Simon Segars, who is currently the President of ARM.
Mr East said:
"It has been a privilege to lead ARM during such a momentous and exciting time for our industry and I am proud of what the ARM team of employees and partners has achieved together while I have been CEO."
"ARM is a great company with a strong market position and a unique culture. We take a very long-term view about our business, and we believe that now is the right time to bring in new leadership, to execute on the next phase of growth and to plan even further into the future."
Mr Segars said:
"I am honoured to have been appointed to succeed Warren, who has achieved so much in his time leading the business."
"I am keen to lead the Company into the next phase of growth, working even more closely with... the Board, our employees and our customers as well as continuing to develop the ARM partnership."
Mr East was appointed the chief executive of ARM during 2001, when group revenues were £146m and pre-tax profit was £50m. By 2012, the business had expanded around four-fold, with revenues having improved to £577m and pre-tax profit having advanced to £277m.
Mr East's tenure at the top has seen ARM receive royalties on some 40 billion microchips sold by partners that now total more than 300. Such progress helped ensure early ARM shareholders enjoyed a 20-fold return on their investment.
Prior to today, City experts reckoned ARM's earnings may jump from 15p to 19p per share during 2013, which would value the shares at 48 times possible profits. A predicted 5p per share dividend offers a prospective 0.6% income.
Of course, whether the illustrious growth record, Mr East's departure and that racy multiple of 48 all combine to make ARM shares a 'buy' remains your decision.
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