Thomas Cook hit by shock CEO departure | Fin24
 
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Thomas Cook hit by shock CEO departure

Nov 26 2014 13:00

London - British holiday company Thomas Cook said chief executive Harriet Green had been replaced by its chief operating officer, the abrupt departure of a woman credited with reviving the business sending its shares tumbling.

Shares in the world's oldest travel company fell as much as 23% on news of the abrupt departure plus a warning from the company that growth would slow to "a more moderate pace" in 2015, to reflect a tougher trading environment.

Green, who joined Thomas Cook in 2012, will be replaced by company insider Peter Fankhauser with immediate effect.

Numis analyst Wyn Ellis said the market was reacting with justifiable scepticism to the timing of Green's departure.

"After all the hype the transformation of Thomas Cook is far from complete. The timing is unfortunate especially as the trading environment appears to be deteriorating," he said.

The stock, which had risen 19% over the previous month, was down 17% to 113.9 pence at 09:46 GMT. It was languishing at 14p when Green joined the company.

Seeking to explain Green's departure, Thomas Cook's chairperson Frank Meysman said that her remit had been to overhaul the firm and that it was always his plan to bring in a new CEO at some stage in the process.

"It's a matter of balance, everybody has their own qualities," Meysman told reporters.

"We now move to a new phase where the implementation of that strategy is becoming the more important part, and therefore we feel it is time to move to somebody who has been groomed as a CEO who comes from the industry."

Green, formerly chief executive of electronics company Premier Farnell, once told a newspaper that she had landed the top job at Thomas Cook by approaching the chairman and telling him "I think you need me".

Meysman said he didn't think Green had another job lined yet, but her statement in the company's press release implied otherwise.

"I always said that I would move on to another company with fresh challenges once my work was complete. That time is now," she said in the statement.

Green has led the company's revival, bringing debt under control and reporting strong growth in profits.

Job cuts, store closures and a series of disposals to cut debt have underpinned Green's strategy of lowering costs and improving profit by as much as £500m between 2012 and 2015.

That represents a recovery from a dramatic slump in 2011, when the firm was hit by the euro zone debt crisis, high fuel costs and political turmoil in popular holiday destinations such as Greece, Egypt and Tunisia.

Announcing full-year results also on Wednesday, the company reported a 44% jump in earnings before interest and tax (EBIT) to £323m ($507.4m) for the year ended September, broadly in line with forecasts. 

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