Shares fall as business 'genius' Kate Swann bows out of SSP

There is no greater compliment that can be paid to a chief executive than for the share price of the company they lead to sink on news of their departure.

That is the back-handed tribute that has been paid to Kate Swann, chief executive of SSP, the global food and drink provider in airports, railway stations and motorway services around the world.

Shares (Berlin: DI6.BE - news) of the company fell by more than 7% on Wednesday morning on news that Ms Swann will step down at the end of May next year after what will by then have been five-and-a-half years in the job.

The reaction reflects not only that the news has come as a shock to investors - Ms Swann is aged just 53, a comparatively youthful age for an outgoing chief executive - but also confirms the esteem in which she is held by them, having successfully run two leading British companies during the last 15 years.

She (Munich: SOQ.MU - news) joined SSP, whose brands include Upper Crust and Ritazza, in September 2013 after almost a decade at the helm of WH Smith (LSE: SMWH.L - news) and has achieved conspicuous success at both.

That was highlighted by the latest results from SSP: full year pre-tax profits rose by 26.3%, to £182.9m, on sales up 7.8% at £2.6bn.

Within that, like-for-like sales - the measure that strips out the impact of outlet openings, closures and refurbishments - were up by 2.8%, no mean feat in a mature sector like airport and railway catering even when taking account of the greater number of people travelling by air during the last year.

Shareholders are also getting an unexpectedly generous £150m special dividend.

What is all the more remarkable about the fact that SSP has become a City darling - shares have risen from their flotation price of 210p in July 2014 to Tuesday night's closing price of 684.8p - is that the company was previously owned by private equity.

There is a common view among investors, perhaps unfairly in some cases but completely fairly in others, that private equity firms tend to leave little on the table for the next owner of a business they sell.

Ms Swann - who, having kept a scrupulously low media profile, is largely unknown outside the City or the business pages - has debunked that idea.

As Greg Johnson, analyst at the company's house broker Shore Capital, put it: "The group was floated at quite [a high price] expecting good and consistent financial delivery.

"Whilst such an out-turn was wished for, boy, has Kate Swann and her team consistently and diligently delivered.

"SSP is a superb operator and defined by an attention to detail, which makes Kate Swann one of the greatest, but as yet still only partially recognised, business geniuses of the present commercial era, and we do not make that claim lightly."

Ms Swann's success at SSP proves that what she achieved at WH Smith was no fluke.

Arriving in November 2003, shortly after the retailer had issued a profits warning, she found a business struggling in a fiercely competitive retail environment, losing sales in its core high street businesses to the supermarkets and to burgeoning online rivals.

It was saddled with a loss-making US hotels and airports business, owned a book publishing business, Hodder Headline, that had little in common with the rest of the company, as well as a newspaper and magazine wholesaling business that, while profitable, looked to have little potential for growth.

She swiftly got the business out of the US in a sale that was described by one analyst at the time as "a near miracle" and, by the summer of 2004, had also offloaded Hodder Headline.

Smiths News was demerged and greater emphasis put on expanding Smith's shops in airports and stations.

At the same time, the ranges in the high street stores were changed, with low-margin lines discontinued and more profitable ones, such as stationery, emphasised.

By 2012, the last full year before her departure, she had generated total shareholder return of 306% - more than Marks & Spencer (Frankfurt: 534418 - news) , Tesco (Frankfurt: 852647 - news) , Morrisons and Sainsbury (Amsterdam: SJ6.AS - news) 's achieved combined during the same period.

Moreover, after Ms Swann left, WH Smith continued to grow as the culture she instilled flourished.

Her successor, Stephen Clarke, recently announced the company's return to the United States .

Investors in SSP will be hoping that her successor, Simon Smith, proves just as reliable.

Even (Taiwan OTC: 6436.TWO - news) before she became CEO of WH Smith, Ms Swann had been tipped by many in the retail sector as a name to watch, having become managing director of the do-it-yourself chain Homebase - then owned by Sainsbury's - at the age of just 34.

Having graduated with a business degree from Bradford University, where she is now chancellor, Ms Swann began her career as a graduate trainee with Tesco, but swiftly moved to marketing roles in the consumer goods sector with both Homepride Foods and Coca-Cola, before going back to the high street with the electrical retailers Dixons and Curry's.

She then jumped ship to Argos, where she was also managing director, before being hired by WH Smith.

Ms Swann said on Wednesday: "I am stepping down at a time when the business is clearly in great shape, with a strong senior management team and enormous future growth potential."

What she does next - the only clue she gave today was a quip about learning to be a tattoo artist - will be fascinating to watch.

Having earned £16.2m while in charge of SSP, and leaving with £35m worth of shares, she never needs to work again.

But the chances are that, when a big retail job next comes up, the head-hunters will inevitably come knocking on her door.