Vertu Motors Faces £5.5 Million Profit Hit from Jaguar Land Rover Cyberattack
Vertu Motors anticipates a £5.5 million reduction in annual profit following a cybersecurity incident at Jaguar Land Rover (JLR). The incident disrupted JLR operations for nearly six weeks, with £2 million of the profit impact realized in September. Vertu, operating 10 JLR dealerships, is exploring insurance claims for third-party systems outages. Despite this setback, the company expects its adjusted annual pretax profit to meet market expectations of £27.2 million, excluding the JLR impact. Vertu's half-year adjusted profit before tax was £20 million, down 10% year-on-year. The news caused a 3.5% decline in Vertu's share price during early trading.
*this image is generated using AI for illustrative purposes only.
Vertu Motors, a prominent automotive retailer, has announced a potential £5.5 million reduction in its annual profit due to a cybersecurity incident at Jaguar Land Rover (JLR). This development has sent ripples through the automotive retail sector, highlighting the far-reaching consequences of digital vulnerabilities in the supply chain.
Impact on Vertu Motors
The luxury carmaker JLR, owned by Tata Motors, experienced a significant disruption lasting nearly six weeks before partially resuming operations. Vertu Motors, which operates 10 JLR dealerships, has been directly affected by this incident:
- Immediate Financial Impact: £2.00 million of the total projected £5.50 million profit hit was realized in September alone.
- Insurance Assessment: The company is currently working with insurance brokers to evaluate the possibility of filing a claim for third-party systems outages.
Financial Outlook
Despite the setback, Vertu Motors remains cautiously optimistic about its overall financial performance:
- Adjusted Profit Forecast: Excluding the JLR impact, the company expects its annual adjusted pretax profit to align with market expectations of £27.20 million.
- Half-Year Performance: For the six months ended August 31, Vertu reported an adjusted profit before tax of £20.00 million, representing a decrease of nearly 10% compared to the previous year.
Market Response
The news has had an immediate impact on Vertu Motors' stock performance:
- Share Price Movement: Vertu shares experienced a 3.50% decline in early trading following the announcement.
Broader Implications
This incident underscores the growing importance of cybersecurity in the automotive industry and its supply chain. It demonstrates how a cyberattack on a manufacturer can have cascading effects on retailers and ultimately impact investor confidence.
As the automotive industry continues to digitalize, companies like Vertu Motors may need to reassess their risk management strategies to account for potential disruptions in their supply chain, particularly those stemming from cybersecurity issues.
The situation remains fluid, and stakeholders will be keenly watching how Vertu Motors navigates these challenges in the coming months.
20
