Capita drops to loss as outsourcer flags up to £25m in cyber attack costs

Capita has slipped to a loss as it said a cyber attack which rocked the firm earlier this year could cost it up to £25 million.

The outsourcing giant posted a statutory pre-tax loss of £67.9 million for the six months to June 30, dropping from a £0.1 million profit a year earlier.

Capita said the loss was driven by business exits, a goodwill impairment and costs linked to its recent data breach.

The firm said it expects the cyber attack to cost it between £20 million and £25 million, comprising specialist professional fees, recovery and remediation costs and investments to its cyber security.

In May, the business estimated a cost of between £15 million and £20 million.

However, the business cited continued progress on its lengthy turnaround in the update, hailing a rise in adjusted revenues and efforts to cut debt.

Adjusted revenue increased by 6% to £1.4 billion for the half-year, as the business also flagged new contracts signed with the Student Loans Company and the Department for Work and Pensions.

The update comes days after Jon Lewis, chief executive officer of the firm, said he will retire next year.

On Friday, the outgoing boss said: “I am pleased with the good progress we continued to make at Capita during the first half of the year as we accelerate our financial performance.

“Our strategy, focused on two core, growing markets, is working.

“We have delivered increased adjusted revenue growth for the fourth successive reporting period, improving profitability, winning an increasing amount of work with new clients, and remain on track to deliver on our full-year expectations.

“Our strong client relationships, long-term contracts, increasingly competitive and digitised solutions, engaged colleagues and reputation for delivery mean we have a resilient business, well positioned for further growth.”