U.K. Defense Supplier Cobham Names New CEO

LONDON—British defense equipment supplier Cobham PLC on Wednesday said it was parting ways with Chief Executive Bob Murphy, after a string of earnings missteps, and named David Lockwood, the current head of U.K. technology company Laird PLC, to replace him.

The company that makes air-to-air refueling systems for Boeing Co. and Airbus Group SE military tanker planes said Mr. Murphy was leaving his post of CEO and director to pursue other opportunities. He will leave by year-end.

Mr. Murphy joined Cobham four years ago after 13 years at BAE Systems PLC, the U.K.'s largest defense company by sales. Mr. Murphy moved to strengthen the company's nondefense activities, including the acquisition of Aeroflex Holding Corp. in 2014 for $920 million. The shift came just as a prolonged decline in military spending had started to turn around and weakness emerged in commercial markets.

Cobham has suffered under a series of profit warnings and failed to return to growth amid weakness in some of its key markets. This month the company cut its dividend payment as it swung to a pretax loss in the first half.

The company in April announced a rights issue that angered investors and caused shares to plummet.

Shares in Cobham, which had fallen more than 33% this year, rose more than 6% in London on Wednesday.

Cobham also suffered with problems on several key programs, including the Boeing Co. KC-46A airborne refueling plane for the U.S. Air Force. The program has run over cost and behind schedule, though it received a boost this month when the Pentagon approved the design for production.

The company in June also named David Mellors as its new chief financial officer. Mr. Mellors, who joins from British defense company QinetiQ, is due to start Jan. 1.

Mr. Lockwood, 54, will join the company as CEO and director by Jan. 1, 2017, Cobham added, though he could take the role earlier. He previously worked at BAE Systems PLC and French defense and aerospace supplier Thales SA. Mr. Lockwood's annual salary will be £ 690,000 ($900,000), Cobham said.

Mr. Lockwood isn't expected to radically change Cobham's strategy to build a more diversified business. The move predates Mr. Murphy becoming chief executive. It had been endorsed by Chairman John Devaney, who on Wednesday called defense and communications technology "the heart of Cobham."

Separately, Laird said Mr. Lockwood's resignation as chief executive was effective from Sept. 5 and that current finance head Tony Quinlan would succeed Mr. Lockwood. Richard Harris, currently group financial controller, will be the company's interim finance head until a permanent successor has been found, Laird added.

Write to Robert Wall at [e-mail] and Tapan Panchal at [e-mail]

(END) Dow Jones Newswires

August 17, 2016 04:15 ET (08:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.