Perhaps the board really had been planning this all along but the markets certainly didn't appreciate the announcement that Thomas Cook's (TCG) chief executive Harriet Green would be stepping down after little more than two years in the job. Shares in the world's oldest tour operator plummeted on the news, trading 19.5% lower at 111p following the shock departure accompanied the group's full year results.
The results themselves were – on the whole – pretty good. Admittedly, revenue fell £727 million in the 12 months to the end of September but underlying earnings before interest and tax (EBIT) rose by £98 million on a like-for-like basis to £323 million. Encouragingly, all of Thomas Cook's businesses reported improved profitability. Underlying UK EBIT margin improved by 130 basis points to 3.5%, thus achieving one of the travel agent's full year targets.
Lower revenues would appear to be down to business disposals and forex translation. There is also the fact that Thomas Cook is in the process of moving away from lower quality products in its drive to focus on higher margin packages. Of course the ongoing unrest in the Middle East and uncertainty in Egypt in particular are also factors to be weighed.
Green's departure comes only a week after she told reporters that her tenure at Thomas Cook was likely to last for another three to four years, based on her assessment that the tour operator's turnaround was likely to take around six years in total. Green joined as CEO from Premier Farnell (PFL) in July 2012 and at the time, the share price at the venerable old company was around 14p, while market cap was less than £150 million. She leaves the company with a market price tag of £2 billion, based on a share price of 111p. Green will replaced by chief operating officer Peter Fankhauser.