Capita experienced a significant decline in its financial position after announcing that it was preparing for a potential loss of up to £25 million as a result of a cyber attack that took place in March. As a government contractor and provider of services such as the London congestion charge and BBC licence fee collection, Capita reported a loss of nearly £68 million for the first half of 2023. The cyber attack disrupted its IT systems and compromised client data, leading to an estimated cost ranging between £20 million and £25 million.
Hit: The FTSE 250 government contractor posted a loss of almost £68m for the first half of 2023
This financial impact surpasses the previously estimated range of £15 million to £20 million. Consequently, Capita’s shares dropped by 18.3 per cent to 21.94p.
Fortunately, Capita managed to recover the majority of the compromised data. In response to the cyber attack, CEO Jon Lewis expressed the company’s commitment to enhancing its cyber-security systems through increased investment. Lewis has been leading Capita’s extensive restructuring efforts to reposition the company’s image after multiple profit warnings.
Earlier this week, Capita announced that Lewis, who has been CEO since December 2017, will be retiring towards the end of the year. He will be succeeded by Adolfo Hernandez, currently serving as the vice president of telecommunications at Amazon Web Services.
The FTSE 100 index rose by 0.5 per cent, or 35.21 points, to reach 7564.37, while the FTSE 250 index increased by 0.5 per cent, or 100.97 points, to 18934.62.
Gambling stocks saw gains as a result of strong performance by US sports betting company DraftKings, which raised its 2023 revenue forecast to a range of £2.71 billion to £2.77 billion ($3.46 billion to $3.54 billion). This exceeded its previous expectations of £2.46 billion to £2.53 billion ($3.14 billion to $3.24 billion). Flutter, the owner of Betfair and Paddy Power, experienced a 3.6 per cent increase, William Hill owner 888 added 4.2 per cent, and Ladbrokes and Coral owner Entain rose by 1.3 per cent.
Telecom Plus, a utilities provider offering energy, broadband, mobile, and insurance services, stated that the exorbitant prices in the market were stabilizing. Consequently, the company expects profits and customer numbers to grow by at least 10 per cent this year. Telecom Plus witnessed a 3.7 per cent increase in its shares.
Rolls-Royce had a successful week with its shares surpassing 200p for the first time in over three years. This achievement followed the release of strong half-year results, indicating the company’s return to profitability through its ongoing turnaround program. Rolls-Royce’s shares rose by 7.4 per cent.
John Wood Group experienced a 3.9 per cent increase in its shares after Jefferies analysts upgraded their rating on the stock from ‘hold’ to ‘buy’. This decision was based on renewed confidence in the oil engineering firm’s improved balance sheet.
Wizz Air saw a 2.4 per cent increase in its shares after Concorde Securities upgraded the stock from ‘reduce’ to ‘buy’, despite Barclays lowering the target price.
Safety equipment manufacturer Halma finalized its fourth acquisition of the year by purchasing an Australian firm for £23 million. The acquired company, Lazer Safe, specializes in laser technology designed to enhance worker safety while operating sheet metal fabrication machines. Halma’s shares increased by 0.9 per cent.
Morgan Advanced Materials, a ceramics manufacturer for metal smelting factories, registered a decline in profits of 31 per cent (£50 million) during the first six months of the year. The company faced a cyber attack in January, resulting in a profit warning. However, Morgan Advanced Materials maintained its forecast for the year. Shares fell by 4.2 per cent.
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