Jaguar Land Rover Cyber-Attack Delays Production, Hits Schaffer’s Profit Outlook
Schaffer Corporation has pulled its first-half profit forecast for its Automotive Leather division following a major cyber-attack on Jaguar Land Rover that halted production. The incident casts uncertainty over short-term sales and profitability.
- Withdrawal of 1H26 profit guidance for Automotive Leather division
- Jaguar Land Rover cyber-attack halts production, delaying restart beyond October 1
- Sales volumes and short-term profitability impacted
- Cost mitigation measures underway to reduce financial impact
- Interim fully franked dividend maintained at $0.45 per share
A Sudden Disruption in the Supply Chain
Schaffer Corporation Limited, a key player in automotive components manufacturing, has taken the unusual step of withdrawing its profit guidance for the first half of fiscal 2026 for its Automotive Leather division. This decision follows a significant cyber incident at Jaguar Land Rover (JLR), one of Schaffer's major customers, which has forced a complete halt to JLR's production lines.
In early September 2025, JLR disclosed a major cyber-attack that compromised multiple systems across its manufacturing plants. Initially, the industry anticipated a swift recovery with production resuming by late September. However, recent updates indicate that the restart is now delayed until at least October 1, prolonging the uncertainty.
Financial Impact and Strategic Response
Given JLR's importance as a customer, the extended production shutdown directly affects Schaffer's sales volumes and short-term profitability within its Automotive Leather division. The company’s board has therefore deemed it prudent to withdraw the previously issued profit guidance to avoid misleading investors amid this unpredictable environment.
To mitigate the financial impact, Schaffer’s divisional management is adjusting raw material procurement and scaling operating costs to align with the reduced sales activity. These measures aim to preserve the division’s financial health while navigating the disruption.
Maintaining Confidence Amid Uncertainty
Despite the setback, Schaffer reassures shareholders that the overall financial position of both the group and the Automotive Leather division remains robust. Reflecting this confidence, the board has confirmed it will maintain the interim fully franked dividend at $0.45 per share, signaling stability to investors during a turbulent period.
Looking ahead, Schaffer plans to provide a further update at its Annual General Meeting scheduled for November 19, 2025. Market watchers will be keenly observing how the situation evolves, particularly the timing of JLR’s production resumption and the broader implications for Schaffer’s automotive supply chain.
Bottom Line?
Schaffer’s cautious stance highlights the growing risks cyber incidents pose to automotive supply chains and investor forecasts.
Questions in the middle?
- How long will Jaguar Land Rover’s production remain suspended?
- What is the potential scale of financial impact beyond 1H26 for Schaffer?
- Could this cyber incident prompt broader supply chain reviews or diversification?
