CITY ANALYSTS have warned that Thomson Travel Group will have to wait two years before it can raise cash for vital investments if it gives acting chief executive Roger Burnell the job on a full-time basis.
Burnell is thought to be on a shortlist of three for the top job at Thomson and has promised capacity cuts and a drive for profits next year.
But in an exclusive interview with Travel Weekly, ABNAMRO director Andrew Monk and Merrill Lynch first vice-president Bruce Jones said Burnell would have to prove himself in the City before investors back him. Thomson has already had to pull out of the race for German giant DER, valued at £300m, and without cash for expansion would fall further behind in the race to become a major European operator.
“I think Burnell is very capable but I think one of the problems with Thomson is that it has got a culture that is not suitable for today’s environment and for taking the group further forward,” said Monk. “To get something going with Thomson you need to put a new culture in and the problem with Burnell is he has been at the company an awful long time and has grown up with that culture.
“Ideally they need someone else. If this company wants to grow significantly, finding City finance would be tricky without someone at the helm who the City has a really high regard for.
“To expand with Burnell could be difficult.”
Jones added:”If you appoint him, he’s got to prove he can do what he says before he gets backing.
“For around 18 months to two years, they will have problems raising money in the City if they appoint Burnell.”
However, Monk said an alternative which could appease the City would be a double appointment with a strong executive chairman.
“If they showed as a pair they were getting their act together quickly, then you could probably bring it down to six months before the City would back them,” said Monk.
Thomson will appoint a chief executive by Christmas.