Rolls-Royce says will streamline top management in 'major restructuring'

Investors will learn exactly what East’s plan involves at a presentation later on Tuesday.

East said in a statement: “As a group we are undergoing an unprecedented period of change. Change in our mix of business and how we account for it. Change in our industrial footprint as we invest in a wide-ranging transformation. And change in demand for our products as we double our large engine output and manage reductions in demand in other markets.

“These changes, while more painful than we expected in the near-term, are vital to our long-term success.”

Pressure on Rolls-Royce to identify a path back to growth has been mounting lately, as activist shareholder ValueAct hiked its stake in the company to 10%.

Hedge fund ValueAct wants a seat on the board, as well as a renewed focus on the aero-engine arm, which accounts for half of profits. It is also in favour of divesting its marine engine unit.

Shares in the company, which have slumped 15% since its last profit warning on November 11, were up 0.5p at 570p in early trading.

Chairman Ian Davis said the board is “committed to providing Warren with the support he needs to implement the findings of his review”.

Additional reporting by Reuters