Desmond not the only heavyweight to put cash into Datalex
Tech entrepreneur Cyril McGuire and ex-Grafton director Michael Chadwick turn up at agm
Former Grafton chairman Michael Chadwick asked where responsibility lay for accounting irregularities that emerged at Datalex this year. File photograph: Nick Bradshaw
Tech entrepreneur Cyril McGuire, co-founder of payments specialist Trintech (with his brother John), and Michael Chadwick, creator and one-time director of builders’ merchant Grafton, showed up at the Datalex annual general meeting this week.
Not only that, both questioned the board from the floor. Chadwick asked where responsibility lay for the accounting irregularities that emerged at Datalex this year. McGuire focused on the difficulties that the company has been having with Lufthansa. The two issues are connected. Datalex ran over time and budget on its contract with Lufthansa, this led to the company overstating revenue for part of 2018.
After the meeting, McGuire acknowledged to reporters that he was disappointed by what has happened at Datalex, but was sticking with the business because he believed in it. Desmond has already committed to providing the group with short-term funding while it prepares the ground to get its shares relisted on the Irish Stock Exchange, which will in turn allow it to raise cash.
Selling seats online
Datalex makes software for airlines to sell tickets and other services to passengers. Following a path forged in Europe by Irish carrier Ryanair early this century, airlines increasingly swerve travel agents and sell seats directly to customers online. This will grow as aviation itself grows, particularly in emerging economies where increasing numbers of workers can afford to fly.
It will also grow as “ancillaries”, that is the extra cash you pay for reserving seats or checking in bags, become an increasingly important source of revenue for airlines. This is one of the more rapidly growing elements of the overall aviation business.
Before its troubles, Datalex was well-positioned to cash in on these trends. At this week’s meeting, acting chief executive Sean Corkery said that customers such as Scandinavian airline SAS still held its products in high regard. Corkery too wants to stick around as he believes that the company has a bright future. It looks like several big-ish beasts of Irish business hope he is right.