Boss of ARM Holdings to Retire in July
LONDON -- The shares of ARM Holdings have slipped 3.3% to 890 pence as of 8 a.m. EDT after the microchip designer revealed that its chief executive is to retire later this year. The FTSE 100 member said Warren East, who joined the company in 1994, will retire on July 1. He will be replaced by Simon Segars, who is currently the president of ARM.
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.
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.
East was appointed the chief executive of ARM during 2001, when group revenue was 146 million pounds and pre-tax profit was 50 million pounds. By 2012, the business had expanded about fourfold, with revenue having improved to 577 million pounds and pre-tax profit having advanced to 277 million pounds.
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 that early ARM shareholders enjoyed a 20-fold return on their investment.
Prior to today, City experts reckoned that ARM's earnings may jump from 15 pence to 19 pence per share during 2013, which would value the shares at 48 times possible profits. A predicted 5 pence per-share dividend offers a prospective 0.6% income. Of course, whether the illustrious growth record, East's departure, and that racy multiple of 48 all combine to make ARM shares a buy remains your decision.
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