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Capita has slumped to a bigger than expected annual loss, sending shares in one of the UK’s largest outsourcers down by a fifth.
The results were hit by £25mn of costs tied to a series of cyber incidents as well as the expense of exiting various businesses, the group said on Wednesday.
Capita, which provides software and IT services to government and private companies, suffered a data breach in March last year, which compromised details of more than half a million members of the UK’s private sector pension schemes.
“We took extensive steps in the immediate period after the incident to recover and secure the exfiltrated data,” said Capita’s chief executive Adolfo Hernandez, who took over from Jon Lewis in January.
The company reported a pre-tax loss of £106.6mn last year compared with a profit of £61.4mn in 2022. Analysts had expected a loss of £58mn, according to Bloomberg. Revenues dropped to £2.8bn from £3bn in 2022.
Capita last year embarked on a programme of retrenchment but on Wednesday Hernandez expanded that to target £100mn of annual cost cuts by the middle of 2025.
“Despite significant rationalisation over the past few years, our cost base is too high,” said Hernandez. The cuts already made could impact about 900 jobs.
Shares in Capita tumbled as much as 20 per cent on Wednesday morning, having already lost more than 60 per cent over the past year, shrinking its market capitalisation to £275mn.
In a separate data breach in May, files containing details on local council benefit payments were left exposed on an unsecured Amazon data bucket, raising concerns over the company’s storage safety measures.
The company said it upped its investment in improving cyber security and offered clients a year-long subscription to a monitoring service in case any exfiltrated data continues to circulate online.
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