IRISH TRAVEL software company Datalex has settled a legal dispute with the Flight Centre of Australia which will result in a $2 million adjustment in the Irish company’s 2011 balance sheet.
According to the company’s 2010 accounts, Datalex was due a total of $2.8 million in trade receivables and unbilled revenue from the Flight Centre.
Under the settlement, Datalex is due to recover approximately $2 million against receivables and unrecovered expenditures.
The dispute has its roots in a 2007 contract between the two companies under which Datalex was to provide the Flight Centre with travel distribution platform software.
In 2009, Datalex indicated its intention to begin legal proceedings against the Australian company for non-payment of invoices.
The Flight Centre subsequently terminated the contract and instituted legal proceedings against Datalex in the Supreme Court of Queensland, seeking 16.1 Australian dollars in damages for misleading and deceptive conduct and non-delivery under the contract.
Datalex counter-sued for $9.2 million for breach of contract relating to the Flight Centre’s decision not to roll out the software, in respect of money owed for work performed and transaction fees.
The court ordered that the companies enter mediation proceedings. These took place in Brisbane on Thursday and Friday of last week, resulting in yesterday’s announcement that a settlement had been reached.
Datalex chief executive Cormac Whelan welcomed the settlement, saying the company was happy to resolve the proceedings and that the settlement would allow it to focus on its growth strategy.
Datalex said the two companies had “resolved the proceedings to their mutual satisfaction”. It said the settlement, which will be completed in 2012, will result in Datalex’s 2011 balance sheet showing the approximately $2 million as an exceptional item against receivables and unrecovered expenditures.
The company’s guided operating performance for EBITDA (earnings before interest, tax, depreciation and amortisation) and year-end cash for 2011 will remain unaffected.
Datalex employs 90 people at its Dublin headquarters and a further 240 people in offices in Europe, the USA and Asia-Pacific. The company offers a retail distribution platform to travel companies, including Air China, United Airlines, Delta Airlines and Aer Lingus.
In its annual report for 2010 the company reported a loss of $2.1 million compared with a $4.5 million loss in 2009.
Earnings before interest, tax, depreciation and amortisation grew by more than $3 million to $3.1 million. Total revenue was $26.8 million.
