* Manny Fontenla-Novoa steps down as CEO with immediate
* Sam Weihagen is interim CEO
* Q3 operating profit down 22 pct to 20.1 mln stg
* Still sees FY underlying operating profit about 320 mln
* Shares rise more than 5 percent
(Adds details, background, analyst comments; updates shares)
By Adveith Nair
LONDON, Aug 3 British travel firm Thomas Cook
said Chief Executive Manny Fontenla-Novoa is to step
down with immediate effect, following a spate of profit warnings
and a steep drop in the company's share price since the start of
Fontenla-Novoa was criticised by analysts and investors
after the group issued a profit warning in July, its third in 12
months, as tough conditions in Britain and unrest in the Middle
East and North Africa (MENA) hit trading.
The value of Thomas Cook shares has dropped by two-thirds
since January, but Fontenla-Novoa, who has been Chief Executive
since 2007, told Reuters only last month his own position was
not under pressure.
Numis analyst Wyn Ellis said the CEO's departure was
expected after the company's latest profit warning.
"It was inevitable that the CEO had to go," the analyst
said. "It is fair to say Thomas Cook has disappointed under his
regime, but it is never good for a company when a CEO leaves
under such circumstances," Ellis added.
Sam Weihagen, deputy to the chief executive, will take on
the role of interim CEO of the 170-year-old firm and the hunt
for a permanent successor was already underway.
Shares in Thomas Cook, Europe's second-biggest travel firm,
rose more than 5 percent to 63.9 pence on Wednesday following
Fontenla-Novoa's departure. Rival TUI Travel's shares
were up 0.33 percent
Separately, Thomas Cook said underlying operating profit for
the third quarter fell 22 percent to 20.1 million pounds ($32.76
million). The company said the impact of unrest in the MENA
region for the quarter was estimated at 25 million pounds and it
expects a similar effect in the fourth quarter.
Peel Hunt analyst Nick Batram said although the company's
trading position was no worse than the most recent profit
warning, today's news "will not encourage many buyers", despite
In July, Thomas Cook said the MENA impact had been heavier
than anticipated, with its French business seeing reduced demand
and lower margins during the peak season for key destinations in
Egypt, Morocco and Tunisia.
On Wednesday, it confirmed full-year profit would be lower
than it previously expected at 320 million pounds. It also
reiterated plans for a strategic review of its UK business and
an asset disposal programme to raise up to 200 million pounds.
Thomas Cook, which has about 750 travel shops in the UK, has
said around two thirds of the full-year profit shortfall was
because of a continued squeeze on disposable incomes in Britain.
British consumer sentiment fell in July towards the two-year
low seen earlier this year, fuelling concerns that consumers
will continue to cut spending and hamper the fragile economic
($1 = 0.614 British Pounds)
(Reporting by Adveith Nair and Rhys Jones; Editing by David
Cowell and Chris Wickham)