LONDON: British holiday company Thomas Cook defended its decision to replace Chief Executive Harriet Green on Wednesday after the abrupt departure of the woman credited with reviving the business hammered its shares.
Chief Operating Officer Peter Fankhauser has replaced Green with immediate effect, moving up to the top job after 13 years with the company, the last of them in his current role.
Shares in the world's oldest travel company fell as much as 23 percent on news that the highly regarded Green was leaving plus its warning that growth would slow to "a more moderate pace" in 2015, to reflect a tougher trading environment.
Green joined the company in July 2012 and led a recovery that increased its market value from 148 million pounds ($233.6 million) to just under 2 billion.
Seeking to explain Green's departure, chairman Frank Meysman said the plan had always been to bring in a new CEO once Green had overhauled the firm.
"This was a unanimous decision by the board which included Harriet so it is not a matter of being told, it is a matter of jointly deciding when is the right time," he said.
Meysman conceded that her exit had come faster than either of them had expected. However, Fankhauser had skills more suited to leading the next phase of Thomas Cook's turnaround.
"We feel it is time to move to somebody who has been groomed as a CEO who comes from the industry," he said.
UNFINISHED BUSINESS
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.
Investors were disappointed by the loss of Green who once told a newspaper that she got the top job at Thomas Cook by telling the chairman: "I think you need me."
The stock fell 17 percent to 115 pence at 1600 GMT, wiping out nearly all the gains made in the last month. Shares in rival TUI Travel
Meysman said he didn't think Green had another job lined up, but her statement in the company 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," the 52-year old said in the statement.
Green had no prior travel experience and was formerly chief executive of electronics company Premier Farnell
She shed jobs and closed stores at Thomas Cook to reduce debt and improve profit by as much as 500 million pounds 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.
The company on Wednesday reported a 44 percent jump in earnings before interest and tax to 323 million pounds for the year ended September, broadly in line with forecasts. (1 US dollar = 0.6365 British pound)- Reuters
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