Yahoo Finance BBC licence fee collector Capita slumps to £107m loss after cyber attack
The outsourcing giant that collects the BBC licence fee has slumped to a £107m loss after it was hacked last year in an attack carried out by suspected Russia-linked cyber criminals.
Shares in Capita plunged by as much as 23pc in early trading on Wednesday after it said it swung into the red in 2023 compared to a £61m profit the year before.
Capita blamed the loss on additional costs including £25m to recover from a hack on its pensions business. The costs are at the top end of the range it had estimated.
Dozens of pension schemes that relied on Capita’s administration services were forced to warn millions of savers their data was at risk following a cyber attack by a Russian gang last March.
Capita’s impacted pension clients included the Universities Superannuation Scheme, which includes half a million savers, and retirement funds for M&S, PWC and Diageo. Capita said its investigations showed just 0.1pc of its servers had been impacted in the hack.
Adolfo Hernandez, chief executive of Capita, said on Wednesday it had taken “extensive steps” to recover and secure the stolen data.
He added the company had continued to monitor the dark web after the attack and said it had seen “no evidence” that any of the data believed stolen was in circulation.
Capita hired Mr Hernandez from Amazon last year in the wake of the cyber attack. He is now tasked with turning around the outsourcer’s fortunes.
Capita’s shares are down almost 60pc since the hack and have fallen 90pc since the pandemic. Its major contracts include collecting the BBC licence fee, running a recruitment drive for the Army and operating London’s congestion charge scheme.
Mr Hernandez said Capita needed to deliver a “rapid reduction” in costs in order to save £60m per year from 2024, increasing to a further £100m per year in 2025. Capita said the cost saving incur an upfront charge of around £50m this year.
Revenues slipped 6.6pc in 2023 to £2.8bn.
The company has already cut 900 jobs, which were announced in November, while it has also pulled out of a scheme to offer the “real living wage”.
Union officials called the decision “astonishing”. The Communication Workers Union said: “This callous choice will massively impact on the living standards of those who have guaranteed the company’s profitability in trying times.”
Mr Hernandez said: “Since 2020, the Group has increased the salaries of our lowest earners by 22pc and the 2024 real living wage increase of 10.1pc was not something we could commit to given the need for Capita to remain cost competitive and that this is not a cost we are able to pass on to our clients.”
