Recent accounts published by the parent company of Simplify have revealed the 2021 incident cost the firm £7 million – though they were compensated for lost business by their insurers.
The firm suffered a prolonged systems outage as a result of a cybersecurity breach towards the end of 2021. The cyberattack resulted in the exposure of personal data and even saw MPs call for an “official inquiry” into the saga.
Fast-forward to 2023 and the impact of the attack has now been laid bare. Parent company UKLS Acquisitions Limited confirmed in its accounts that the group saw an exceptional cost of £7.3 million primarily as a result of the cyberattack. The group said it also recognised an “impairment in the carrying value of the goodwill” of £21.2m.
Alongside £15 million of cash investment from Simplify’s shareholders, they confirmed that they were “able to successfully claim from its insurers in respect of lost business resulting from the cyberattack”.
In their strategic report, the directors of Simplify said:
“In November 2021 [Simplify] were the target of a cyberattack. The resultant restoration of systems required the level of new cases taken in to be significantly reduced for a period of approximately 10 weeks, which has dampened the results for the financial year, which otherwise would have been on track to deliver a record number of completions.”
They added that, in the period immediately after the cyberattack, the firm “closely liaised with its regulatory bodies (principally the Council for Licensed Conveyancers) to ensure that the risks to customer data, status, and funds were minimised and to provide all necessary reassurances that continuous service could be provided to existing customers of the Group”.
They added that the Group “fully complied with all relevant obligations required by the ICO to ensure that any data or information loss resulting from the attack was appropriately handled”.
This, they say, led to the ICO “[expressing] satisfaction that all appropriate steps were taken”, and that the ICO therefore does not intend to take any further action or carry out any further investigations into Simplify’s handling of the attack.
Financial performance
The directors said turnover for the Group was £140.3 million (2021: £137.5 million) of which 90% (£126.6 million) was related to legal services and 10% (£13.7 million) was related to property services.
Group adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) for the year was a £1.2 million loss compared with £12 million profit in 2021. The operating loss for the year including exceptional items was £46.4 million (2021: £7.6 million loss).
It’s added that, “in the context of what was a difficult year in residential property markets, the management are satisfied with the performance in the year”.
