Datalex, the Dublin-listed retail software provider to airlines, said on Thursday it expects to return to positive earnings this year as more carriers move onto its new platform of products spanning the booking of air fares and seats to cars and hotels.
The group’s loss before interest, tax, depreciation and amortisation widened 7 per cent last year to $3.1 million (€2.76 million), the company said in a statement. The result was in line with expectations. However, it said that it is targeting profitability at this line in 2025, which would be the first positive result in five years.
Revenues dipped 5 per cent last year to $27.5 million. However, within this, platform revenue jumped 24 per cent to $16.1 million as services revenue slid 27 per cent to $10 million, driven by Virgin Australia scrapping a plan to overhaul its retail offering in 2023 and Scandinavian airline SAS not proceeding with a Datalex product as it filed for bankruptcy protection the same year.
Datalex has shifted in the past five years from a company that built bespoke, and expensive, systems for airlines to essentially selling off-the-shelf software products designed to help carriers get the most out of customers.
The company raised €25 million last autumn in a multipronged share sale, with most of the money being used to repay expensive loans to its main shareholder, Dermot Desmond, who had been a consistent provider of finance since the company was rocked in 2019 by an accounting scandal and, subsequently, the Covid-19 pandemic.
Mr Desmond’s IIU Nominees unit increased his stake in the company to 49.3 per cent from 40.3 per cent as a result of the equity raise. Datalex owed another Desmond vehicle, Tireragh, more than €19 million, including built-up and unpaid interest and fees before transaction.
Datalex hired Jonathan Rockett, the former managing director of mobile top-up platform Ding, as its chief executive in late 2023.
“We achieved several positive developments in 2024, including the launch of our offer and order [management] solution, Stellex, and the successful activation and migration of four airlines to this new platform,” said Mr Rockett.
“Whilst it was disappointing to see revenue decline, after excluding non-recurring revenue, the underlying performance and momentum in platform revenue is promising. The financial performance in 2024 does not reflect the progress made, and I am confident that the actions we have taken will deliver stronger financial performance in 2025.”
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Shares in Datalex rose 8.6 per cent to 38 euro cents in early trading in Dublin.
Datalex reiterated that it plans to raise further capital in 2025. The stock is currently trading at a discount to the 45c-level at which it raised equity last September.
“The quantum and timing of this capital raise will depend on the pace of investment in the company’s anchor solution and new product offerings, and the funding required to support the implementation of new business opportunities,” the company said, which ended 2024 with $6.4 million of cash on its balance sheet.
Goodbody Stockbrokers analyst Dudley Shanley said that 2024 “was all about laying the foundations for growth” at Datalex.
“Given the improved balance sheet position any additional capital will be used to drive the business forward rather than to deal with legacy debt issues,” he said. “The timing and the amount of the capital raise will depend on the pace of investment into the product portfolio and the requirement for working capital to support new revenue opportunities.”
