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Saturday, June 10, 2023

Latitude shares plunge as it reveals hit from cyberattack

Consumer finance business Latitude Group is likely to scrap its first-half dividend and report a loss of up to $105 million as a result of a crippling cyberattack that compromised the personal information of 7.9 million people.

Shares in Latitude dropped 7 per cent on Friday morning to $1.20, after it revealed the financial hit it would take from a March cyberattack, which exposed personal details of customers sourced from retailers such as Harvey Norman, JB Hi-Fi, Coles and Apple.

Latitude says it is unlikely to pay a first-half dividend.Credit: AFR

In a sign of the attack’s broad impact across the company, a lender to consumers, Latitude said it had been forced to stop or severely restrict the opening of new accounts for about five weeks. The company was also unable to contact customers who had not paid their bills during this period because key systems were shut down.

While regular commercial operations have been restored, Latitude said it would make less income and it would also take higher provisions for bad debts, because the shutdown in its collections area had worsened a trend towards rising loss ratios.

The company, which since April has been led by chief executive Bob Belan, also flagged a $46 million after-tax provision, mainly to cover the customer remediation costs, such as the cost to customers of replacing their drivers licences. This provision does not include any possible costs the company could face from class actions, fines, or future upgrades to its systems.


All up, the company forecast a first-half statutory loss of $95 million to $105 million, and it also expected a statutory loss over the full years.

“Due to the forecast statutory after-tax loss, it is unlikely that Latitude will declare a dividend for the six months to 30 June 2023,” the company said.

It said cash net profit after tax – a less volatile measure – would be $5 million to $10 million in the first half.

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