Travel software company Datalex Plc has posted a pre-tax loss of US$900,000 for the first six months of 2007, compared to a profit of US$1.6 million a year ago.

Published: 23 Aug 2007

Travel software company Datalex Plc has posted a pre-tax loss of US$900,000 for the first six months of 2007, compared to a profit of US$1.6 million a year ago.

The net loss arose from increased operating cost pressures in the selling and marketing, and administration area, part of which arose from a weak US dollar. The costs also included a once-off restructuring charge of $1.2m. Other gains reduced by $0.9m from the same period last year as a result of foreign exchange fluctuations.

The first half revenue increased to $15.7 million from $12.4 million last year.

According to the company, e-business revenue increased to $12.8 million ($8.9 million in 1H 2006), primarily due to the transactional model beginning to generate ongoing revenue and an increase in professional services revenue associated with new and existing customer engagements. Transaction revenues – at $3.7 million - accounted for 29 percent of e-business revenue (1H 2006 $0.7 million, eight percent of e-business revenue).

The gross margin increased to 33 percent in the first half from 27 percent for the same period 2006. This was primarily due to higher margins being earned on the increased transactional revenue.

“The results show the first tangible benefits of the Datalex transition to a transaction pricing model and of its commitment to investment in its Travel Distribution Platform (TDP). It is particularly pleasing to see further evidence of the success of the strategy we adopted in the last two years,” said CEO Cormac Whelan.

“The first half results continues to demonstrate Datalex’s ongoing commitment to invest in the development of our product suite. The investment totalled at $11.9m at 30 June 2007 ($9.8m at 31 December 2006). Our product suite has already delivered high quality functionality to the airline industry including calendar shopping, availability cache, and delivery of ancillary airline revenues through our business rules engine (seat allocation, baggage charges, car hire, insurance, discount models and yield management services),” he said.

The scope of the product suite has now expanded and has opened opportunities for Datalex in the broader leisure market (travel agencies and tour operators), with Flight Centre and STA Travel, contracting to use its TDP software as their global solution in both their point of sales (shops and call centers) and online channels.

“The combination of our business model and our product leave us with a strong pipeline of potential new customers,” added Whelan.

“Airlines and travel companies are becoming more strategic about developing alternative distribution and revenue channels. For our customers, Datalex software is a primary enabler in driving new products and services to consumers in both the online and the offline channels. In short, Datalex increasingly is a key part of our customers’ infrastructure,” added Whelan.

The company shared that a number of large customers will ‘go live’ on the transaction-based model in third and fourth quarters of 2007.