Datalex sees earnings growth in 2020 despite Covid-19 crisis
Travel software group expects earnings of up to €1.3m under new management team
Shares in travel software company Datalex were suspended from trading in May last year after it missed a deadline to file 2018 results. Image: iStock
Datalex, the travel retail software provider to airlines, said on Wednesday it expects its earnings to rise to as much as $1.5 million (€1.3 million) this year as its new management team moved to stabilise the business amid the Covid-19 crisis.
The company revealed last week that it posted $500,000 earnings before interest, tax, depreciation and amortisation (ebitda) last year, with the figure laden down by $8.3 million of exceptional items.
These included costs for redundancies, investigations stemming from a Datalex accounting scandal that emerged last year, and a $2.9 million provision against money it says is owed by Lufthansa, with which it is involved in a legal dispute. Datalex now expects its ebitda to come between $750,000 and $1.5 million this year, it said.
“I am pleased with this positive guidance. Contributory factors include strong customer relationships and contracts, as well as actions taken during the past number of months to achieve the necessary stabilisation and rightsizing of the business,” said Sean Corkery, who took over as chief executive last year.
“Whilst we acknowledge the impact of Covid-19, and aviation’s industry-wide uncertainty, Datalex occupies a key space, with transformative software and products which can help airlines recover quickly. We are confident Datalex products can support our customer base as they manage the Covid crisis while rebuilding our revenues and profitability.”
Datalex disclosed last week that its main shareholder, Dermot Desmond, has eased terms on $12.4 million of emergency loans he granted to the company last year and has committed to providing a further lifeline, if needed.
Datalex, whose shares were suspended from trading in May last year after it missed a deadline to file 2018 results, is in “advanced discussions” with the Central Bank and Euronext Dublin, the Irish stock exchange, regarding the resumption of trading.
It plans to raise equity to repay the loans from Mr Desmond, through his Tireragh vehicle, and fund working capital needs in 2021 and beyond.