Datalex expects to report loss for 2018 after change to recognition of 'certain revenue'
Datalex, the Dublin-based travel software firm, has revised its earnings guidance for 2018 and now expects to report a loss of between $1m - $4m (€872,000 - €3.5m).
The revision in guidance is largely due to changes in the timing of its recognition of certain revenue, the company said.
Most of this revenue that is not recognised in 2018 will be recognised in 2019 and 2020.
Shares in the company were down over 60pc in early morning trading on the Irish Stock Exchange.
In a statement Datalex added that revenue, adjusted EBITDA and profit for the half year ended 30 June 2018 may have been "misstated" mainly due to the accelerated recognition of revenue associated with a customer, because negotiations regarding the recovery of this revenue shortfall have not concluded but are ongoing.
"Today’s announcement is extremely disappointing for me personally, for the team at Datalex and for our supportive shareholders," Aidan Brogan, CEO of Datalex, said.
"For my part, I can assure all our stakeholders that we have already identified certain key areas that require improvement and are taking corrective action. The fundamentals of the business remain strong. We are confident this is a once off and we will return to profitability in 2019."
The company, which confirmed it had net cash of $8.8m at year-end, added that it has asked a leading accountancy firm to undertake an independent review of this issue.
It will review its financial tear 2019 guidance and will update the market in early February.
Datalex’s software platforms are used by airlines and travel groups around the world to help boost ancillary revenues. Clients include Lufthansa, Air China and American airline JetBlue.
Shareholders in the group include billionaire financier Dermot Desmond.