E-travel software company Datalex has recorded a 60 per cent jump in profits to $1.6 million (€1.25 million) in the six months to June 30th, 2006, compared to the same period in 2005, despite falling sales.
The Dublin-headquartered company attributed this increase mainly to a foreign exchange gain of $1 million. Operating costs fell from $4.8 million to $3.2 million.
The company is shifting from a licence and services business to a transaction-based model and it said this had impacted on sales in the first half of the year.
Chief executive Cormac Whelan said yesterday that the transition "forfeits short-term licence revenue for potentially longer-term earnings". Total revenue fell by 13 per cent year-on-year, and within this, Datalex's e-business revenue base, which includes the company's booking engines, declined by 21 per cent.
Mr Whelan said the company has "made considerable investment in the airline functionality of our product suite over the last 18 months and is expanding our development to productise our 'leisure' based solutions". He said Datalex expects customers to "go live" in the second half of the year with the company's new engineered reservation system.
Davy analyst Alan Daly said the second half of the 2006 was "all about execution" for Datalex.
"Four major implementations of the Datalex travel distribution platform (TDP) for United Airlines, SAS, Virgin Atlantic and South African Airways are due to come on stream; we believe that these projects going live will be a strong catalyst for the stock," he wrote in a note to investors.
