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E-commerce airline player hit turbulence this year after a grave accounting error was discovered.
The CEO of Irish travel e-commerce platform Datalex, Aidan Brogan, is understood to have resigned with immediate effect, just days after the company’s chair also stepped down.
Deputy chair Sean Corkery will step in as acting CEO until a new permanent CEO is found.
Brogan, who has been with the company since 1994, was named CEO in 2012.
Out of the blue
Around €112m was wiped off Datalex’s market capitalisation in January when the company issued a shock profit warning after revealing it may have overstated revenues in relation to a major customer.
It is understood that Datalex, one of the Irish tech scene’s few publicly listed companies, overestimated the costs it could charge for a contract signed with a major European airline, believed to be Germany’s Lufthansa.
The company reported a substantial decline in EBITDA (earnings before interest, taxes, depreciation and amortisation) to minus $4m from the $16.2m profit that had been expected. $2.9m of other services and platform revenue was incorrectly recognised during the first half of 2018 and about $700,000 of this is unrecoverable.
A PwC investigation found that Datalex had failed to apply the International Financial Reporting Standard (IFRS) 15 accounting rule to its results for the first half of 2018.
Last week Paschal Taggart announced he was stepping down as chair of the company while shareholders voted to accept a loan of €6m from businessman Dermot Desmond at an extraordinary general meeting.
Datalex has temporarily suspended trading of its shares from 1 May as it failed to meet a regulatory deadline to publish its accounts as scheduled on 30 April. Trading will remain suspended until accounts have been published.
In a brief statement the company said it would update the market “in due course”.
Datalex’s digital commerce platform is used by global airlines including Aer Lingus, JetBlue, Lufthansa, Philippine Airlines, Swiss International Air Lines and Virgin Australia, and enables a travel marketplace of more than 1bn shoppers across the globe.
Updated, 9.29am, 3 May 2019: This article was updated to clarify that Datalex expected a loss of up to $4m, not a profit, and to correctly identify these EBITDA figures in dollars, not euro.
