Join our community of smart investors

Harriet Green flies Thomas Cook

Shares in Thomas Cook have reacted badly to news that chief executive Harriet Green will leave with immediate effect.
November 26, 2014

Shares in travel operator Thomas Cook (TCG) took a beating after news emerged that chief executive Harriet Green is stepping down with immediate effect. The news shocked investors. Ms Green has only been in the job for two years and has been largely credited for turning around Thomas Cook’s fortunes as it clawed its way out of the recession.

IC TIP: Buy at 109p

Her departure was announced alongside the group's annual results. Last year, revenues fell by £727m to £8.6bn as a result of disposals, a negative foreign exchange impact, reductions in capacity and low demand for holidays in Egypt.

Losses after tax improved by £98m to £115m, and underlying cash profits on a like-for-like basis rose 44 per cent to £323m. But this excluded restructuring costs, impairment charges and a £41m provision for customer claims relating to flight delays. With rampant cost-cutting still high on the agenda, Thomas Cook has culled another £95m from its debt pile, leaving it with £326m of net debt at the period-end.

Analysts at Numis expect pre-tax profits of £232m for the current financial year, giving EPS of 13.1p.