Datalex, the Howth-based software group, reported a pre-tax loss of $20.6 million (€19.03 million) for the year ended 2002 yesterday, compared to a loss of $92.8 million in 2001. The group also forecast a positive cash flow during the second half of 2003 following extensive cost-cutting over the past two years.

Mr Neil Beck, Datalex chief executive, said he was forecasting revenues of more than $30 million for 2003 on a lower cost base.

The company expected to attain cash break-even in late 2003, he added.

He also said that he did not expect any potential war in the Middle East to hit the Howth-based firm's sales forecasts for 2003. Customers are now more focused on the value proposition of Datalex's software, he added.

The company's results, which were ahead of analysts' forecasts, show Datalex was able to cut its loss per share to 31 cents, down from $1.40 in the previous year.

Datalex generated turnover of $25.6 million in the 12 months to the end of 2002, a fall from $29 million revenues made in 2001. Day-to-day expenditure fell to $11 million in 2002, down from $25.8 million in 2001.

Mr Beck said better management of costs had enabled the firm to come in ahead of forecasts. He said the second half of 2002 had produced a loss per share of just 11 cents compared to a loss per share of 20 cents in the first half.

The results show operating expenses in 2002 more than halved to $25.1 million, compared to $55 million in the previous 12-month period. Restructuring charges amounted to $3.1 million in 2002.

Datalex's results were boosted by an exceptional $1 million gain from a payment received from a previous development partner following the termination of a jointly funded development project.

Mr Beck said he was delighted that financier Mr Dermot Desmond had recently increased his stake in the company to 13 per cent. This event had increased the liquidity of the shares, he said.