Datalex, the airline retail software company, has secured a new €5 million credit facility from a vehicle controlled by Dermot Desmond as it continues to explore new fundraising options.
Revenues at the Dublin-listed company increased by 24 per cent in the first six months of the year to $12.9 million compared with the same period last year, Datalex said in half-year results published on Friday.
With the exception of China, Datalex said its key markets had “surpassed expectations” over the period as global air traffic recovered to 90 per cent of 2019 levels.
However, the Clontarf-based group reported an adjusted earnings loss of $3.1 million for the six months to the end of June, up from $2.1 million last year.
Datalex said that an increase in services revenue led to a decline in gross margin and earnings due to rising personnel costs. Total operating costs surged 30 per cent to $18 million in the first half, said outgoing chief executive Sean Corkery, correlating “directly to the increased activity in customer activations, which requires upfront investment”.
Datalex also added a new airline, LatAm Airlines, to its customer base. “Other significant developments included the successful renewal of four key airline partners during the period, including Air China, Air Transat, JetBlue, and Edelweiss,” Mr Corkery said. “Each of these renewals represent essential building blocks towards steady and sustainable growth, as the group continues to successfully move each customer on to a standard commercial model of license fees and variable transaction fees.”
The group also recently secured a new €5 million loan from Dermot Desmond’s Tireragh vehicle, €3 million of which has already been drawn down, bringing to the €13 million the total drawn down in loans from the businessman’s company. All the credit facilities are due for repayment by December 31st, 2024.
The Irish Times reported in June that Datalex ultimately plans to refinance the Desmond loans, as well as an additional debt it takes on in the near term, through an equity raise, most likely through a €20 million share sale.
Datalex said in April that it was exploring “all financing options” to refinance loans under an existing €10 million facility from Mr Desmond’s Tireragh, as the rate attached to the loans increased from 10 per cent to 15 per cent and is on track to ultimately rise to 18 per cent from October.
However, sources indicated that the group was likely to hold off on a share sale in the near term amid unease among existing investors about its depressed share price, seeking to raise further debt finance in the meantime for working capital as it works on activating major new contracts.
Mr Corkery, who will be replaced as chief executive by Jonathan Rockett upon his retirement at the end of the year, said he expected the group’s positive trajectory to continue amid a “steady recovery” in global air traffic.
