Thomas Cook’s recovery has moved up another gear as it announced a rise in full-year operating profit.

Earnings before income and taxes (Ebit) jumped 315% to £54 million while revenue fell 7.8% to £8.6 billion, which Cook said was down to a number of business disposals.

The results were accompanied by the shock announcement that chief executive Harriet Green has left the business with immediate effect and will be replaced by Peter Fankhauser.

Although Cook managed to improve its annual operating result from £13 million to £54 million, it still posted a loss before tax of £114 million, mainly due to finance costs totalling £180 million.

After deducting net interest and tax charges, the loss for the year amounted to £115 million, an improvement of £98 million on 2013.

Cook said that all businesses within the group had delivered improved profitability, and that it was encouraged by summer 2015 business, with bookings in the UK up 8% and prices up 1%.

However, it warned of a tougher trading environment in the year ahead, meaning its outlook was positive but measured.

Shares fall

Despite the narrowing of losses, shares dropped sharply as the City reacted to the departure of Green and the company’s cautious outlook for 2015.

Almost £400 million was wiped off the firm’s stock market value and some investors took flight pushing the share price down 18% to 113p.

“The cautious outlook statement and Green’s departure after all of the hype is likely to put the shares under pressure this morning,” analysts at Numis warned in a note.