Travel software group Datalex has issued a revenue warning because of the slowdown in the US economy. In a statement with first-quarter results yesterday, chief executive Mr Neil Wilson said the group was now "more cautious" about the out-turn for the remainder of the year and he pushed out the target date for reaching profitability.
"The pipeline of new business continues to be strong but contract timing issues could result in revenues being below market expectations for the remainder of 2001. Against this background, as I have stated, we have already taken steps to reduce our cost base.
"Therefore, our stated goal of reaching EBITDA/operating profitability by Q4 2001 is now a target that will be more realistically achieved in Q1 2002," he said. Mr Wilson said he was "very confident" about the medium-term prospects for the group in a global travel market which continued to grow strongly and where the value of travel purchased online rose from $6 billion (#6.8 billion) in 1999 to $12 billion in 2000 and is expected to reach over $20 billion this year. But he described the current operating environment as "more challenging".
Datalex shares moved 10 cents ahead to #2.60, reflecting largely first-quarter results in line with expectations, despite a difficult economic environment and expected cost savings in the current year. Total revenue jumped to $10.9 million for the three months to end March from $4.7 million, but losses before tax rose to $12.6 million from $10.3 million in the corresponding previous quarter. Net losses were down marginally on fourth-quarter 2000.
While the group net loss increased to $12.5 million from $10.7 million, the net loss per share fell to 19 cents from 38 cents, reflecting an increase in the number of shares in issue. At the end of March, Datalex had an accumulated deficit of $84.7 million, up from $72 million.
Datalex floated on the stock market last October at #6.84 per share. It is now trading off its 2001 low of #2.05 but well off its 2001 high of #6.30.
