Shares of Cover-More Group Ltd (ASX: CVO) have been slammed today, losing 8.5% to $1.245. They did fall as low as $1.207 earlier in the session, marking a fresh low for the group's share price.
The heavy fall comes after the travel insurance business issued a business update to the market yesterday. Although it announced an extended partnership with Flight Centre Travel Group Ltd (ASX: FLT) to provide travel insurance across nine Flight Centre brands in the United States, that update was offset by the updated sales figures.
Sales in the Australian business grew by 6.9%, which was slightly lower than the 7.1% growth recorded in the first half of financial year 2016. Meanwhile, group revenue for the third quarter rose by 4.7%, compared to 6.6% versus the prior corresponding period in the first half. Further information will be provided to the market at tomorrow's Macquarie investor conference.
The update followed an announcement from the group on Monday that its CEO, Peter Edwards, had advised the board that he would retire from his role in 2016. It was noted that his decision was largely due to travel requirements from his home in Queensland.
While a successor, Mike Emmett, has been named, a change in management can still create new risks for the business. This may have compounded the market's harsh response today.
To make matters even worse, a number of analysts have also cut their guidance on the shares including Morgan Stanley which, according to Dow Jones Newswire, cut its target price by 33% to $1.50.
