Dublin-headquartered travel software group Datalex returned to the black last year despite reporting a decline in sales.
The company recorded a pretax profit of $1.9 million (€1.6 million) in 2005, compared with a loss of $18,000 in 2004. Revenue declined 7 per cent to $28.4 million.
Datalex attributed the improved performance largely to a reduction in operating costs. These declined to $8.8 million last year, from $11.7 million in the prior year, mainly due to the capitalisation of $2.6 million of development expenditure that has been included in the intangible assets on the balance sheet.
Cormac Whelan, Datalex's chairman, said the revenue decline came as a result of the group's migration towards a transaction-based model, which forfeits short-term licensing revenue for potentially longer-term earnings. Analysts said they expect the shortfall to continue this year and say it may end up impacting revenues in the first half of 2006 as well.
Last year the company, which supplies online booking mechanisms to airlines, hotels and travel agents, made considerable investments extending its products. As a result it won two new contracts with SAS and Virgin Atlantic Airways. Datalex also counts Aer Lingus, American Express, Best Western International, Emirates, KLM and United Airlines among its customers.
Mr Whelan said the company plans to continue investing in its products, with a particular focus on leisure-oriented systems such as car and hotel shopping. "This year is all about execution for Datalex," Alan Daly, an analyst at Davy said in a note to investors. "However, we are encouraged by the progress to date and in particular management's turnaround of the company."
