Aerospace and defence business Cobham (COB) is up 4.4% to 167.3p on news chief executive officer Bob Murphy will be replaced by the current head of FTSE 250 electronics business Laird (LRD), David Lockwood.

Lockwood will take over at the running Play of the Week no later than 1 January 2017. He is highly respected in the industry, hence why the appointment is seen as a major loss for Laird whose share price falls 5.5% in response to Lockwood's departure.

He took over at Laird in August 2012 and has since overseen a 44% increase in the share price and consistent growth in revenue, earnings and the dividend.

Murphy, at the helm of Cobham since June 2012, has been forced to deliver two profit warnings in the past year and launched a £500 million rights issue to repair the balance sheet.

The company's finances became stretched thanks to the ill-timed $1.5 billion acquisition of US rival Aeroflex in 2014.

Although the shake-up at the top could be good news in the long-term there could be earnings downgrades in the interim if Lockwood and David Mellors – due to take over as chief financial officer in November – seek to rebase market expectations.

Investment bank Berenberg, which has a ‘sell’ recommendation on the stock with a 160p price target, says: ‘Given his (Mellor’s) conservative stance towards guidance, we take a view that the management outlook may be lowered as the business evolves under new management.’

Issue Date: 17 Aug 2016