MARKET REPORT: Investors head for exit after Capita’s £25m cyber-attack

Capita took a mighty tumble after it said it was bracing itself for a financial hit of up to £25million following a cyber-attack that began in March.

The FTSE 250 government contractor, which runs the London congestion charge and collects the BBC licence fee, posted a loss of almost £68million for the first half of 2023.

It estimated that the cyber-attack, which disrupted its IT systems and accessed client data, would cost between £20million to £25million.

Hit: The FTSE 250 government contractor posted a loss of almost £68m for the first half of 2023

That would be higher than the £15million to £20million it had previously forecast. Capita shares tumbled 18.3 per cent, or 4.9p, to 21.94p.

A small amount of data was taken but has now been recovered, Capita said.

Chief executive Jon Lewis added that the company had also been ploughing more funding into its cyber-security systems since the attack. 

He has spent several years trying to revive the firm’s fortunes with an extensive restructuring in an effort to shed the company’s image amid a string of profit warnings. 

Earlier this week, Capita said Lewis, who has been boss since December 2017, would retire towards the end of the year.

He will be replaced by Adolfo Hernandez, the vice president of telecommunications at Amazon Web Services.

The FTSE 100 rose 0.5 per cent, or 35.21 points, to 7564.37 and the FTSE 250 added 0.5 per cent, or 100.97 points, to 18934.62.

Gambling stocks made gains following a strong performance from US sports betting firm Draft-Kings, which raised its 2023 revenue forecast to a range of £2.71billion to £2.77billion ($3.46billion to $3.54billion).

That was ahead of its previous expectations of £2.46billion to £2.53billion ($3.14billion to $3.24billion). Flutter, which owns Betfair and Paddy Power, gained 3.6 per cent, or 520p, to 15160p, William Hill owner 888 added 4.2 per cent, or 4.6p, to 113.8p and Ladbrokes and Coral owner Entain rose 1.3 per cent, or 18p, to 1399p.

Utilities provider Telecom Plus, which offers energy, broadband, mobile and insurance services under a single package to ensure households make savings on their bills, said sky-high prices were stabilising. As a result, it said profits and customers should increase by at least 10 per cent this year. Shares rose 3.7 per cent, or 60p, to 1676p.

Rolls-Royce ended the week on a high after its shares rose beyond 200p for the first time in more than three years.

It followed Thursday’s strong set of half-year results, which showed the jet engine maker swung back into profit as its ongoing turnaround programme gathered pace. Shares increased 7.4 per cent, or 14.3p, to 206.5p.

John Wood Group added 3.9 per cent, or 6.2p, to 164p after brokers at Jefferies raised its rating on the stock to ‘buy’ from ‘hold’ amid renewed confidence over the oil engineering firm’s improved balance sheet.

Wizz Air flew 2.4 per cent, or 55p, to 2369p after Concorde Securities upgraded the stock from ‘reduce’ to ‘buy’. Such gains came even though Barclays cut its target price to 2150p from 2600p.

Safety equipment maker Halma sealed its fourth takeover this year after snapping up an Australian firm for £23m.

Lazer Safe’s laser technology is designed to keep workers safe while they use machines that fabricate sheet metal. Shares added 0.9 per cent, or 19p, to 2152p.

Morgan Advanced Materials, which makes ceramics for metal smelting factories, traded lower after profits plunged 31 per cent to £50million in the six months to the end of June. It suffered a cyber-attack in early January and issued a profit warning several weeks later.

The incident cost the group more than £11million, but the firm reiterated its forecasts for this year. Shares fell 4.2 per cent, or 11.5p, to 260p.