Datalex vies ‘aggressively’ for business as investors back Desmond loans
Travel software group hit by Covid shutdown of sector
Datalex hopes to benefit as digital sales are predicted to lead a recovery in airlines’ passenger bookings. Image: iStock
Datalex, the travel retail software provider for airlines, has been “aggressively” pursuing potential business from carriers seeking to overhaul how they lure passengers post-Covid, its chief executive said on Thursday, as investors backed a rescue loans deal with financier Dermot Desmond.
The company secured 100 per cent approval from voting shareholders at an extraordinary general meeting (egm) to extend the term of €11.3 million of loans secured last year from Mr Desmond’s Tireragh vehicle by 12 months to November 2021. They also gave the nod for Datalex to borrow up to an additional €10 million from Tireragh, repayable on the same date.
Mr Desmond, who owns 29.8 per cent of the company, abstained from the vote.
Chief executive Sean Corkery told shareholders that Datalex, which was rattled in 2019 by accounting scandal, has been affected more recently by a Covid-induced slump in air travel and as major airlines have been reluctant to commit to major purchasing decisions.
“However, in recent months we have participated aggressively in a heartening number of request for proposal processes, whilst also engaging informally with a number of airlines on their immediate product needs as they reshape their strategies,” he said.
“We are confident that our developing pipeline is well-suited to our products and that we will be able to implement rapidly once prospective customers begin to take key decisions.”
Mr Corkery said Datalex is well placed to benefit as digital sales are predicted to lead a recovery in airlines’ passenger bookings, carriers seek to promote pricing offers at scale, and they cut back on building their bespoke IT systems to use software companies’ products.
Datalex reported last month that its loss on an adjusted earnings before interest, tax and depreciation (ebitda) basis narrowed to $1.3 million (€1.1 million) for the first half from a shortfall of $1.5 million for the same period last year, even as revenue fell 42 per cent in the first half to $13.2 million.
The company forecasts that ebitda for the full year will come to between $750,000 and $1.5 million this year.
Datalex plans to raise equity by late next year to fund the repayment of the Tireragh loans and make sure it has additional working capital.
Chairman David Hargaden said that the board of the company has concluded that “now is not the appropriate time to complete an equity fundraising”.
“The group continues to face financial challenges exacerbated by the adverse effect that the Covid-19 pandemic has had and continues to have on the aviation industry generally and which has caused significant dislocation in the equity capital markets,” he told the virtual egm, reiterating a point made in a circular issued before the meeting.