Latitude shares plunge because it reveals hit from cyberattack

Shopper finance enterprise Latitude Group is more likely to scrap its first-half dividend and report a lack of as much as $105 million on account of a crippling cyberattack that compromised the non-public info of seven.9 million folks.

Shares in Latitude dropped 7 per cent on Friday morning to $1.20, after it revealed the monetary hit it could take from a March cyberattack, which uncovered private particulars of shoppers sourced from retailers corresponding to Harvey Norman, JB Hello-Fi, Coles and Apple.

In an indication of the assault’s broad impression throughout the corporate, a lender to shoppers, Latitude stated it had been pressured to cease or severely prohibit the opening of latest accounts for about 5 weeks. The corporate was additionally unable to contact clients who had not paid their payments throughout this era as a result of key methods have been shut down.

Whereas common business operations have been restored, Latitude stated it could make much less revenue and it could additionally take increased provisions for unhealthy money owed, as a result of the shutdown in its collections space had worsened a pattern in the direction of rising loss ratios.

The corporate additionally flagged a $46 million after-tax provision, primarily to cowl the client remediation prices, corresponding to the price to clients of changing their drivers licenses. This provision doesn’t embody any doable prices the corporate may face from class actions, fines, or future upgrades to its methods.

All up, the corporate forecast a first-half statutory lack of $95 million to $105 million, and it additionally anticipated a statutory loss over the complete years.

“Because of the forecast statutory after-tax loss, it’s unlikely that Latitude will declare a dividend for the six months to 30 June 2023,” the corporate stated.

It stated money internet revenue after tax – a much less risky measure – can be $5 million to $10 million within the first half.