Reynolds Makes Changes in Management to Boost Growth
Reynolds American Inc.(RAI) has been making several changes at the executive level of late, to solidify its management team and augment international growth.
After naming a new president and chief commercial officer for its subsidiary R.J. Reynolds Tobacco Company (RJR Tobacco) in September, Reynolds is now set to announce certain promotions within its management.
Last week, Reynolds has announced that Gilchrist, the current executive vice president of Reynolds, will be promoted to the position of executive vice president and chief financial officer (CFO). He will be functional in his new position from Mar 1, 2015.
Gilchrist, aged 42, has held several responsible positions in the company. He was appointed the executive vice president of Reynolds in Sep 2014. Prior to that, he served as the president and chief commercial officer of Reynolds’ subsidiary R.J. Reynolds Tobacco; executive vice president and CFO of R.J. Reynolds; and chief information officer of RAI Services Company.
Gilchrist will succeed Thomas R Adams, who started his career in 1997 and joined Reynolds as the senior vice president and controller before becoming the chief financial officer in 2008.
In September, Reynolds named Debra A. Crew (currently the president and general manager of PepsiCo Inc.’s (PEP) North America Nutrition division) as the new president and chief commercial officer of R.J. Reynolds Tobacco Company effective Oct 1, 2014. (Read: Reynolds Shuffles Top Management to Fuel Growth).
We expect the recent shuffling in management to help the company withstand the ongoing headwinds in the tobacco industry which has lowered volumes of the tobacco companies over the past few quarters.
Concurrent with the press release, Reynolds declared its quarterly dividend of 67 cents per share ($2.68 annualized) payable on Jan 2, 2015 to shareholders of record on Dec 15, 2014.
On a separate note, Reynolds has been exploring options to acquire its rival Lorillard Inc. (LO) since Mar 2014. In July, Reynolds confirmed talks regarding the merger. The proposed merger is under surveillance of anti-trust authorities and is expected to close in the first half of fiscal 2015. (Read: Reynolds Confirms Talks Regarding Lorillard Acquisition).
Reynolds currently carries a Zacks Rank #2 (Buy). Another stock in the tobacco sector worth considering is Altria Group Inc. (MO) carrying a Zacks Rank #2.
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