Datalex shares fall despite growth

Datalex shares fall despite growth

By Eamon Quinn

Datalex, the Irish developer of travel retail software, in which Dermot Desmond and its chairman, Paschal Taggart, have significant stakes, pledged to deliver double-digit growth in revenues in each of the next three years.

It highlighted recent wins, including from an airline in the Lufthansa Group, a China customer, and its first in the huge loyalty market, as drivers of sales.

However, the shares, at one stage, fell 3% in Dublin, before cutting their losses to end 1% lower, amid concerns about global trade wars between the US and China, which rattled stock markets.

Datalex, which reports earnings in dollars, posted a 31% rise in net profit to $7.1m (€5.75m) for 2017, as revenues increased 15%, to $63.9m — boosted by existing customers, like JetBlue, and more recent contract wins from Lufthansa’s Swiss International Air Lines and Chinese carriers. Its costs rose 31%, to $56.6m.

“With the commencement of platform revenue at the Lufthansa Group and our new customer deployments, coupled with continued, organic growth across our customer base, we are projecting double-digit growth in platform revenue annually over the next three years,” the company said.

Mr Desmond’s IIU owns 26.8% of the company and Mr Taggart has a 3.2% stake. 

According to its annual report, the pay, bonus, and pension payment to chief executive, Aidan Brogan, climbed to $620,000 last year, from $532,000 in 2016.

The shares have slumped almost 20% in the past year, with the firm valued at €226m. They ended yesterday at €2.90. 

However, Goodbody, which has a price target of €4.50, said it saw “upside” after its 2017 “positive” earnings report, “which included continued organic growth, new travel vertical wins, and margin progression”. 

It said: “We remain comfortable on our future years’ forecasts.” Reiterating its “outperform” recommendation on the shares, Davy said the company had a “strong growth pipeline”.

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