(Alliance News) - Avast PLC has ended the provision of data to Jumpshot, it said on Thursday, after allegations the unit harvests and sells personal data.
Avast shares were 5.3% lower on Thursday morning in London at 431.40 pence each, and are down more than 20% this week.
Prague-headquartered Avast currently has a 65% stake in data analytics business Jumpshot. London-listed business events firm Ascential PLC owns the rest, buying the 35% stake in July last year for USD61 million.
In its own statement on Thursday, Ascential said it has agreed to sell that 35% stake back to Avast. It did not say for how much, but said Avast will pay the original investment in cash plus expenses.
Ascential shares were 1.5% higher in London at 372.60p.
On Wednesday, cybersecurity firm Avast said it was reviewing options for Jumpshot, responding to media reports suggesting the company was selling personal data.
"Avast has terminated the provision of data to its data analytics business Jumpshot with immediate effect. Jumpshot may not use any existing data provided by Avast and no further data will be provided by Avast," said Avast on Thursday.
"The decision to terminate the provision of data to Jumpshot has been made in the best long-term interest of the group and its shareholders. Users put their faith in Avast to keep their data safe online and to give them control over their privacy."
"While Avast believes it has always acted in full accordance with privacy regulations and strived to implement best practices, this action seeks to mitigate any perceived conflict of interest with our core security mission that might exist with our users. Investment resources budgeted for Jumpshot will be reassigned to other areas of the group to support long-term organic growth initiatives," it continued.
Avast stressed this decision will not affect 2019 financial results, with Jumpshot to now be booked as a discontinued operation. Adjusted revenue from Jumpshot in 2019 was USD36 million, compared to group revenue of USD862.8 million.
Looking ahead to 2020, Avast expects "healthy" growth excluding Jumpshot, delivering organic revenue growth of mid-single digits. Organic billings growth will "broadly" match revenue growth though will be second half weighted.
Avast sees the 2020 group adjusted earnings before interest, tax, depreciation, and amortisation margin broadly flat year-on-year. It will take a USD15 million to USD25 million charge related to closing Jumpshot.
The final dividend for 2019 as well as well as dividends for 2020 will continue to be in line with Avast's dividend policy, it said. Avast paid a maiden dividend at the halfway stage in 2019 of 4.4 US cents.
"The core of the Avast business and our fundamental strengths remain unchanged. Trading in 2019 was in line with our expectations. We continue to expect healthy growth during 2020 and remain confident in the long-term prospects for the business," said Chief Executive Ondrej Vlcek.
By George Collard; georgecollard@alliancenews.com
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