Datalex expects unchanged revenues of €45m after review

Troubled travel software company issues statement in advance of agm on Tuesday

A board-commissioned review published in May confirmed that there had been ‘significant accounting irregularities’ at Datalex last year. File photograph: Getty

A board-commissioned review published in May confirmed that there had been ‘significant accounting irregularities’ at Datalex last year. File photograph: Getty

 

Troubled travel software maker Datalex believes earnings for this year could dip or grow by up to $1 million (€900,000).

Datalex said on Monday it expected to report earnings before interest, tax and write-offs – a measure of the cash it generates – of between minus $1 million and plus $1 million for this year. The company expects revenues to remain unchanged at $45 million.

Datalex issued the statement ahead of its annual general meeting, scheduled for noon in the Croke Park Hotel, Dublin, on Tuesday.

The company, rocked by revelations of accounting irregularities, reported in delayed annual accounts this month that it lost $50 million last year.

The software developer’s auditor Ernst & Young reported it to the Registrar of Companies earlier this month for failing to keep adequate accounts.

A board-commissioned review published in May confirmed that there had been “significant accounting irregularities” at Datalex last year and that it reported revenues for the first half of 2018 that had been overstated.

In Monday’s statement, chief financial officer Niall O’Sullivan said: “The comprehensive review of our cost base and numerous corrective actions taken ensures the company is now well placed to return to stable and profitable growth.”

Stock slides 60%

Datalex first warned of suspected accounting irregularities in January, sending its shares tumbling by 60 per cent. Its investors include financier Dermot Desmond’s IIU.

Trading in its shares on the Dublin Stock Exchange was suspended in May because of delays in publishing its annual accounts.

After the auditors reported Datalex to the registrar, the company said that it had put significant effort into tackling the shortcomings in its accounting that an independent review by PricewaterhouseCoopers and its lawyers had identified.