BUSINESS LIVE: Capita cyber incident cost £25 million

While the Bank of England struggles with rising costs, inflation plagues Turkey.

Inflation reached nearly 50 percent in July as an overheated economy put pressure on consumers, according to the Turkish Statistical Institute.

Sophie Lund-Yates, Principal Equity Analyst at Hargreaves Lansdown:

‘Technology spending, especially in the US, has slowed, resulting in a dent in the performance of the group’s substantial integrated creative agencies.

This outcome is unwelcome, but not entirely surprising given that companies are in a wait and see attitude when it comes to splashing cash and handing over margin at a time when demand is very difficult to profile.

While demand for WPP’s suite of services hasn’t completely faded, it has faded this half and investors will want to see a clear path to return to full color. Deploying AI correctly and quickly could be a way to drive large amounts of growth, but change of this magnitude always involves risks.”

WPP, the world’s largest advertising group, has revised its full-year growth forecast down from 3 to 5 percent from 1.5 to 3 percent after lower spending from tech customers caused sales in North America to fall in the second quarter. quarter.

Mark Read, General Manager:

Our performance in the first half was resilient with growth accelerating in the second quarter in all regions except the US, which was impacted in the second quarter by lower technology customer spending and some delays in technology-related projects. This was particularly felt at our integrated creative agencies.

China returned to growth in the second quarter, albeit more slowly than expected. In the short term, we expect the activity pattern of the first half to continue in the second half of the year.’

Shares in online shopping giant Amazon rose last night after it became the latest tech giant to crush Wall Street’s forecasts.

The world’s largest online retailer posted revenues of £106 billion for the three months to June, 11 per cent more than in 2022 and more than the £103 billion forecast by analysts.

It posted a quarterly profit of £5.3bn, following a loss of £1.6bn in the same period of 2022 as the dominance of online shopping staved off the declines caused by a slump in consumer confidence amid pressure on the economy. cost of living.

Capita expects net extraordinary costs of £20m to £25m related to the cyber incident that rocked the UK outsourcing firm in March.

However, the group maintains its full-year earnings outlook.

“I am pleased with the good progress we made at Capita in the first half of the year as we accelerated our financial performance.

‘Our strategy, which focuses on two core markets, is working. We delivered higher adjusted sales growth for the fourth consecutive reporting period, improved profitability, won more business with new customers and remain on track to deliver on our full year expectations.

“We have seen an improvement in our Net Promoter score for employees in addition to lower turnover; and I want to thank all of our people for their continued hard work, commitment and professionalism.

“Our strong customer relationships, long-term contracts, increasingly competitive and digitized solutions, engaged colleagues and reputation for delivery mean we have a resilient business, well positioned for further growth.”