Shares in Thomas Cook plummeted more than 20 per cent in London trading after Harriet Green, the chief executive behind the revival of the ailing travel agent’s fortunes, abruptly quit.
Green joined in July 2012, months after the 173-year-old company came close to collapsing under its debts and a dramatic downturn in trading in November 2011.
Her drastic surgery saw thousands of jobs axed and stores closed, but today she handed over the reins to chief operating officer Peter Fankhauser with “immediate effect”.
Green, an incredibly driven executive said to survive on four hours’ sleep a night, said her work “was complete”.
But only a week ago she told a Management Today conference: “You can’t do a transformation on this sort of scale in a year or two years. I usually say it’s about six years. We go to the City next week with our second year of results and to show if and how the company has become fitter and better and we’re absolutely not done.”
Chairman Frank Meysman said the decision was “unanimous” but Green has no other job to go to and the sudden announcement stunned the City.
Despite a 44 per cent rise in annual profits, the shares tanked 26 per cent, before settling 19 per cent, or 25.7p, down at 112.2p.
“Equity markets can be ruthlessly cynical, and why Thomas Cook thought the instant departure of Harriet Green would be taken at face value is perplexing. Needless to say, a lack of clarification has seen conclusions being jumped to,” said IG Group market analyst Alastair McCaig.
It is understood the decision was ratified only yesterday. Green was being offered to journalists for interview in January as recently as Monday.
Meysman painted the departure as the handover from a turnaround specialist to a travel expert in Fankhauser, an industry veteran of more than 20 years.
“We have a different balance of requirements going forward,” he said. Green, who earned £2.86 million last year, is still negotiating a pay-off and has a six-month notice period.
But the real payday will come from her share options, as the stock has risen almost tenfold from the 14p when she joined in June 2012, despite today’s slump.
“She will earn a substantial amount of money,” Meysman added. Underlying profit before interest and tax, stripping out the impact of a stronger pound and disposals, rose to £323 million in the year to September 30, but will grow at a “more moderate” pace in the years ahead.
For next summer UK bookings are up 8 per cent and prices 1 per cent are higher.Reuse content