Jet2 (JET2) £11.28

Loss to date: 12.6%

If the esteem in which investors hold an executive is measured by share price action on their departure news, Jet2’s (JET2:AIM) Philip Meeson could barely hold a higher reputation.

News that Meeson is planning his retirement saw the company’s share price plunge more than 10%, swiping around £250 million off Jet2’s market cap, and slammed Shares’ February 2023 Great Idea into the red.

As executive chairman and architect-in-chief of Jet2’s transformation from delivering flowers into the UK’s biggest package holidays company and third largest airline, Meeson has created enormous value for investors. Morningstar data shows 18.4% annualised total returns (share price gain/loss plus dividends) over the last decade versus a little more than 5% for the FTSE 100.

WHAT HAS HAPPENED SINCE WE SAID TO BUY?

Meeson, a former RAF pilot and aerobatics champion and now aged 75, plans to stay on for a bit, to ensure an orderly handover. It is also worth noting that the airline already has a trusted senior management team with a proven strategy..

Full-year results to 31 March showed a strong recovery in revenue and profits, robust forward bookings and more than £1.1 billion of cash, excluding customer deposits. It has benefited from surging demand for air travel.

WHAT SHOULD INVESTORS DO NOW?

Investors are wondering if Meeson will start to sell down his 18.3% stake in the business. As Jet2’s largest shareholder by a mile, it is natural to expect someone stepping down, and at his age, to want to crystallise some of the gains he’s made over the years.

Shares suspects any disposal will be handled sensibly and that there will be no shortage of buyers to meet demand for Meeson’s shares should they become available. Which leads us to believe that Meeson’s planned departure is a short-term bump for the share price, and one that has simply created a better buying opportunity than existed a week ago.

Still a buy for the long-term.

‹ Previous2023-07-13Next ›