TNT UK sees continuing loss as 2017's cyber attack casts long shadow

TNT UK remained loss making in its most recent trading period once the one-off gain from the sale of its Business Solutions division is stripped out, its latest accounts show.

The accounts for the year to 31 May also provide further guidance suggesting the cost of the cyber attack that crippled its operations in June 2017 to the business was in the millions.

TNT UK said the NotPetya cyber-attack that involved the spread of a virus via a Ukranian tax software product had, along with the sale of its Business Solution division, reduced revenue by 8.4% or approximately £56m on an annual basis.

Although TNT UK did not publish a turnover figure for its divested Business Solutions division, the difference in annual turnover between continuing and discontinued operations in the period was £24m.

The operator, now part of FedEx Corporation, reiterated that it had taken approximately three quarters of a year before ‘substantially’ all of TNT Express's services were restored following the cyber attack.

However, the full impact of the attack, including the recovery of business data, took until the third quarter of the 2018 financial year – autumn 2018 – to fully overcome, the accounts state.

It added that parent FedEx Corporation was unaffected and no data breach or loss occurred as a result of the cyber attack that paralysed its network.

Mototransport.co.uk approached FedEx Corporation for further comment but was instead directed to a recent filing for the group to the US Securities and Exchange Commission. This stated the cost of NotPeyta to the group business was approximately $400m (£358m).

Business Solutions sale

Business Solutions was sold on 1 May 2018 for £88m in cash resulting in a £53.9m profit on disposal.

The sale saw TNT UK record a £34.4m pre-tax profit in the 12 months ended 31 May 2018. However, on the basis of continuing operations the express carrier remained loss making to the tune of almost £29m in the period.

In the 17 month period to 31 May 2017 – instigated to align it with FedEx’s financial calendar following TNT's acquisition in 2016 – it was also loss making.

Turnover in the 2018 reporting period was £664m or £640m on a continuing operations basis. This compared to £1bn in the 17 month period ended 31 May 2017.

FedEx Courier