Sunday 15 December 2019

Losses halved at business hit by worst Irish cyber-attack

A total of 37 jobs are to go at Loyaltybuild’s HQ in Ennis
A total of 37 jobs are to go at Loyaltybuild’s HQ in Ennis

Gordon Deegan

An Irish business that was victim of a "very sophisticated cyberattack" is to maintain its presence here - but with a reduced workforce.

That is according to new accounts just filed by Loyaltybuild which show the firm recorded pre-tax losses of €9.1m in 2015.

Last October, Loyaltybuild - which built its business operating customer loyalty programmes for clients - announced the redundancy of 37 staff at its Ennis HQ in Co Clare.

The new accounts show that the estimated cost of the restructuring is €780,000. The directors state that in addition, the firm's relationship with a significant client ended on December 31st last.

The directors state that in order to maintain the company's leadership position in a competitive market, the company must refocus on becoming an agile, leaner and predominantly digital-led business.

The decision to downsize the Irish operation followed three years after the 2013 cyberattack put Loyaltybuild's Irish business out of action for seven months costing the company millions of euro in lost revenues.

No one was ever identified or brought to court for the cyberattack.

The new accounts show that Loyaltybuild managed to halve its pre-tax losses to €9m in 2015 as its revenues increased by 25pc from €23.8m to €29.9m.

A large proportion of the 2014 €18m pre-tax loss concerned the restructuring of the firm's French operation.

The company's accounts cover the activities of Loyaltybuild's European business including its French operation.

The revenues generated in Ireland increased in 2015 from €5.9m to €6.3m with revenues in 'Other European Countries' increasing from €17.9m to €23.4m.

Numbers employed reduced from 132 to 119. Staff costs at the firm in 2015 reduced from €7.7m to €4.72m.

Directors' remuneration in 2015 declined from €803,353 to €394,382.

The loss in 2015 takes account of combined non-cash depreciation and amortisation costs of €875,998.

The company is owned by US group, Affinion and a note attached to the accounts states that Loyaltybuild had net liabilities of €2.67m and net assets of €644,719 at the end of December 2015.

The note states that Affinion will continue to provide financial support as required and has confirmed that the firm will not seek repayment of the amounts due if they were to cause financial difficulty for Loyaltybuild.

In 2008, three Co Clare businessmen who co-owned Loyaltybuild bucked the recession when they sold the firm to the US group for €25m.

It is understood that founder and former ceo Dominic Considine, businessman, aircraft leasing financier, Domhnal Slattery and developer and hotelier, Sean Lyne received half of the proceeds up front.

The balance was to be paid over a number of years, based on the firm meeting targets.

Irish Independent

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