Cyber attack victim firm Loyaltybuild in Clare has €18m loss

Loyaltybuild — the Co Clare firm that was victim to a “very sophisticated cyber attack” plunged into the red in 2014 to record pre-tax losses of €18m. Loyaltybuild Ltd posted a profit of €1m in 2013.

Cyber attack victim firm Loyaltybuild in Clare has €18m loss

The cyber attack in November, 2013 put Loyaltybuild’s Irish business out of action for seven months and cost the company millions of euro in lost revenues.

As a result of the cyber attack, the Data Protection Commissioner slapped a prohibition order on the firm that stopped it from operating in Ireland for a period of time.

The Commissioner confirmed the data breach involved of personal data of 1.5m people, including 376,000 individuals whose full credit card data was compromised.

A large proportion of the losses at the firm are connected with the restructuring of Loyaltybuild’s French entity during 2014 that was purchased in 2013.

The directors’ report says that “during the financial year, the company implemented a plan to restructure its French branch.

"Significant restructuring costs, including redundancy costs, were incurred as a result.”

The accounts show that Loyaltybuild Ltd incurred exceptional costs of €7m relating to a non-cash impairment of €4.2m and restructuring costs of €2.9m.

The acquisition of the French firm in 2013 helped to almost double revenues in 2014 from €12.3m to €23.8m.

The accounts also confirm that departing executives at the Co Clare firm shared a pay-off of €1.3m in 2014.

The head of the Ennis operation Peter Steenstrup, who oversaw the firm’s immediate response to the cyber attack, resigned in April 2014.

A second director, head of European Operations at parent company Affinion, Guillaume Huser, resigned on November 2014.

A spokesman declined to respond to a number of questions around the firm’s accounts, including the compensation payments to directors.

He said Loyaltybuild continues to progress well in the Irish market as in other territories.

The directors’ report says that “the company intends to continue to expand its activities in the coming financial year — both within existing markets and through the development of strategic partnerships in new markets”.

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