New Datalex boss has big job ahead

As Datalex chief executive Sean Corkery prepares to retire, incoming boss Jonathan Rockett can look forward to an in tray bursting at the seams as the group faces an increasingly daunting series of challenges.

The Dublin-listed company has taken on more debt advanced by its main shareholder, Dermot Desmond. When the group’s operations were upended by the Covid-19 pandemic, Desmond gave Datalex a lifeline, extending a €10 million facility, repayable at the end of 2024. The trouble is the interest rate on the loans jumped from 10 per cent a year to 15.5 per cent in April and will ultimately rise to 18 per cent from next month.

[  Datalex secures new €5m loan from Dermot Desmond vehicle ]

Datalex said in April it was exploring avenues to pay back the loans. A €20 million share sale was mooted at one point but in June, sources said the group was likely to put that idea on the back burner for the time being amid investor concern about the group’s share price. It was hoped that any interim debt financing to help fund the expansion of Datalex’s customer base and the associated costs would be accepted on less onerous terms than the €10 million emergency facility.

This has not been realised, Datalex said on Friday. The new €5 million loan is on the same terms as the previous one: the interest rate will rise to 18 per cent in October. All of this just a few years after the company sold a block of shares to repay previous loans from the billionaire.

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[ Datalex hires Ding MD Jonathan Rockett as its new chief executive ]

The good news for Rockett, and perhaps Desmond, is that Datalex’s fortunes continue to improve as it bounces back from the pandemic. With the exception of China, where travel remained heavily restricted last year, Datalex said its key markets had “surpassed expectations” over the first half of the year as global air traffic recovered to 90 per cent of 2019 levels. Revenues increased 24 per cent to $12.9 million (€12.1 million) and a decline in adjusted earnings was chalked up to increased costs associated with onboarding new customers like LatAm Airlines.

Still, while the underlying numbers appear to be clear for take-off, the group is facing fresh debt headwinds.