Datalex staff to question chief executive about firm’s woes
Company calls meeting in attempt to boost morale after shares slide 75% in two months
Datalex chief executive Aidan Brogan: described 2019 as a “year of transition”. File photograph: Cyril Byrne
Datalex chief executive Aidan Brogan is set to come under pressure as the Dublin-listed software provider to the travel industry holds a staff meeting on Thursday in a bid to shore up morale, after its shares slumped more than 75 per cent in the past two months in the wake of a profit warning.
Questions submitted anonymously through an online platform, called Slido, in advance of the meeting, include whether employees should continue to have confidence in the chief executive and his leadership team, The Irish Times has established.
Other questions focus on the group’s job-cutting programme, announced last month and aimed at saving up to $10 million (€8.8 million) annually, Datalex’s cash levels and whether it is now a takeover target. A spokesman for the company, which is 26.4 per cent owned by billionaire Dermot Desmond, declined to comment.
Datalex’s market value has slumped from €190.5 million to less than €48 million since the group warned on January 15th that its 2018 earnings before interest, tax, depreciation and amortisation may come to a loss of almost $4 million.
It signalled that it was struggling to recover higher than expected costs from its largest project, known to be the overhaul of the digital commerce offering of German airline Lufthansa, as it was dogged by budget and timeline overruns. The group also disclosed the same day that it may have misstated revenues and earnings for the first half of 2018, mainly due to how it booked income associated with same project.
Datalex hired accountancy firm PwC Ireland in January to carry out an independent review of the issue. It is understood that a report on the matter may be concluded by the end of the month.
What are the staff concerns?
The group issued an update in the middle of last month, outlining plans to cut jobs and contract roles to save costs, while issuing sales and earnings guidance for 2019 and 2020 that was below market expectations.
Mr Brogan described 2019 as a “year of transition” in the statement and said the board remained “confident” in the future growth of the business. He did not provide an outlook for its cash position, which stood at $8.8 million at the end of December, having fallen by almost half within 12 months.
A number of questions submitted ahead of the meeting centre on the state of the Lufthansa project, while one asks whether the company could potentially attract bid interest from Spanish travel technology giant Amadeus, or the German airline.
Datalex has long been surrounded by takeover speculation. Elsewhere in the sector, Texas-based travel software group Sabre agreed last November to buy smaller rival Farelogix in a $360 million deal.