Datalex, the travel software company hit by an accounting scandal last year, cut first-half losses by one-third to €4 million despite Covid-19's impact on aviation.
The Irish company develops software that airlines use to sell seats on their flights online.
Datalex reported on Thursday that losses fell by 30 per cent in the first six months of this year to $4.8 million (€4.04 million), from $6.9 million during the same period in 2019.
Revenue fell 42 per cent in the first half of 2020 to $13.2 million, from $22.6 million in the same period.
The company’s stock had risen 5 per cent to 54 cent shortly before 4.30pm on Thursday following the news.
Datalex's shares were readmitted to the Irish Stock Exchange in June following their suspension in 2019 after the company failed to file full-year accounts on time.
Auditors EY had refused to sign off on the company’s 2018 financial statements as a result of accounting irregularities.
Businessman Dermot Desmond, Datalex's biggest shareholder, lent Datalex €11 million through a company called Tireragh Ltd to aid it through its difficulties.
Mr Desmond has agreed to provide Datalex with a further €10 million lifeline should the company need it. Tireragh has also agreed to extend the repayment date of its loan by 12 months to November 1st 2021.
The board recognises that current circumstances represent material uncertainties that cast doubt over Datalex’s ability to continue as a going concern, the company’s accounts state.
The board believes Tireragh’s intention to continue supporting the business will allow it to “successfully navigate” current uncertainties, a note adds.
Datalex ultimately intends issuing new shares to raise the cash needed to repay Mr Desmond and provide the business with working capital.
In a statement, Datalex said it reacted immediately to Covid-19’s near shutting down of air travel in the first half by eliminating discretionary spending, freezing recruitment and cutting working hours, among other measures.
Chief executive Sean Corkery said that despite the challenges posed by coronavirus, first-half results were in line with Datalex's expectations.
“The group is positioned well for industry recovery and growth and remains on course to be profitable for full year 2020,” he added.
Datalex expects earnings before interest, tax, depreciation, amortisation and once-off charges, a measure of the cash a company generates, to be between $750,000 and $1.5 million this year.
This depends on it completing a contract renewal with one of its customer airlines that has already sought this from the Irish company.
