Capita shares slump as £25m cyber attack cost hits profits

Shares in UK government contractor Capita plunged on Friday after it posted a loss for the half-year, including taking a hit of up to £25m from a cyber attack on its computer systems.

The company made a loss before tax of £67.9m, compared with a profit of £0.1m due to business exits, non-core portfolio goodwill impairment and costs associated with the cyber incident. Capita stock was down 16% in London trade.

On an adjusted basis, Capita’s pre-tax profit increased by £8.4m to £33.1m. Turnover rose 3% to £1.47bn.

The cyber attack was carried out by Russian hacking group "Black Basta", which managed to steal from less than 0.1% of Capita’s servers. The company said today that the impact on its future growth outlook from the incident was “minimal”, and that it had signed government contracts worth more than £1bn since March.

“That data has been recovered and extensive steps have been taken to secure the data. Impacted customers, suppliers and employees have now been contacted and we are supporting those whose data was exfiltrated,” it added.

Capita runs a range of services for government departments, including the National Health Service, as well as local councils and the military.

After the cyber-attack, around 90 organisations reported breaches of personal information held by the company to the UK's data watchdog, the Information Commissioner’s Office.

Capita’s systems are also used to administer pension funds for several large firms, including Royal Mail and Axa, covering millions of policyholders, which led to the Pensions Regulator to write to more than 300 pension funds asking them to check whether data had been stolen by hackers.

Reporting by Frank Prenesti for Sharecast.com