Datalex may not turn a profit this year because of a weak dollar and the impact of the SARS virus on the global travel business, the company said yesterday.

The Howth-based software firm had hoped to achieve profitability in 2003 by increasing sales by 30 per cent year-on-year. But Mr Neil Beck, Datalex chief executive, said sales growth was not meeting expectations and stood at 20 per cent.

Speaking to The Irish Times after the firm's a.g.m. in Dublin yesterday, Mr Beck said the firm was facing some issues it had not anticipated such as the SARS virus and the strong appreciation of the euro.

"We thought we'd already hedged enough for an appreciation of the euro at a rate of one-to-one with the dollar but it is now running at $1.18," he said.

Because Datalex sells a lot of its software in the US but has a large cost base in euros, it is being affected by the dollar slump, says Mr Beck. The SARS virus outbreak in Asia this year has also undermined Datalex's expectation of selling software into that market. Mr Beck said management would continue to review the firm's cost base, including the size of its workforce, in light of the firm's sales growth figures.

Datalex supplies software to the travel and aviation sectors, which have both been severely affected over the past two years by terrorism, war and now SARS.

The Datalex board had considered several options during its restructuring, including delisting from ISEQ and a management buyout. No decisions had been taken on these options and the firm was committed to turning a profit and delivering shareholder value, said Mr Beck.

He said it was still possible that Datalex could turn a profit this year but this depended on sales in the second half of 2003.

Meanwhile, Datalex's founder and biggest shareholder, Mr Neil Wilson, yesterday retired from his executive role at the software company.