Interim Management Statement  

for the three months ended 30 September 2009

Dublin, Ireland/19 November, 2009 - Datalex Plc (ISE: DLE; OTC: DLEXY) today released its Interim Management statement for the three months ended 30 September 2009.

Overview

The difficult conditions experienced by the travel industry in the first half of 2009 show no signs of abating, with consumer demand still depressed and oil prices hovering around the $80 mark. In this environment, airlines are continuing to cut costs and defer capital investment until clear evidence emerges that the market outlook is improving. This scenario presents a challenging operational environment for Datalex, but we have responded to this challenge by streamlining our business and growing our transaction revenue by 33% in the year to end September 2009, and by 22% in the period under review. 

Revenue

Total revenue in Q3 2009 was $5.4m, down 19% on the same period in 2008, and down 14% 2009 year to date compared to the previous year. This decline was driven by the reductions in customer spending on professional services, which impacted on both our e-business professional services and TPF consulting activities. These operational spending constraints, and the lengthening of the new business cycle, are both direct consequences of the current travel industry dynamics and the broader economic environment. 

It is likely that these customer budget constraints will persist well into 2010. As outlined below, we have responded to these challenges in 2009 by taking considerable steps to tune our resource model and cost base to reflect the current market reality. The actions we have taken this year will not only enable Datalex to manage effectively through the current challenging conditions, but also position the business well to take advantage of the upturn when it comes.  

On the positive side, transaction revenue continues to grow, with Q3 2009 showing a 22% increase on Q3 2008, and a 33% increase year to date to $10.4m, against the same period in 2008. Q3 also saw our latest customer begin using the TDP platform, when Copa Airlines of Panama went live on 17 August last. 

Despite the continuing market and economic challenges, and the increasing length of the new business cycle, we are currently pursuing a number of significant opportunities, and expect to conclude two new contracts before the end of 2009, for delivery in 2010.  

Cost base

Total costs were down 10% on the same period last year. When the increase in amortisation costs are stripped out, total costs in the first nine months of 2009 are down over 13% on the same period in 2008. As outlined in our interim results announcement in August, these cost savings are being achieved as a result of steps taken in early Q2 of this year to tune the resource model to reflect the constrained demand for professional services and the slow down in new business wins in 2009. 

Throughout H2 we have continued to reduce the operating cost base, and the annualised effect of all of the measures taken in 2009 will deliver in excess of $7m cost savings in 2010. 

Cash reserves

Cash reserves at 30 September 2009 were $8.5m, down from $10.6m at 30 September 2008, and from $11.1m at 30 June 2009. The two main drivers behind this decline are our product development investment, and our working capital investment in a number of current projects. 

Flight Centre

As detailed in our notice to shareholders of 6 November last, we are currently in dispute with one of our customers, Flight Centre of Australia, in relation to the deployment of our software at their travel agency business. We are vigorously pursuing our claim for all monies owed, together with substantial damages for breach of contract. It is unlikely that this matter will be resolved before year end. 

Year end outlook

The effect on our forecast H2 revenue of the continuing challenging market conditions, together with impact of the termination of the Flight Centre business relationship and the non-deployment of our software as planned, leads us to a revised outlook for the full year 2009 where we now expect a loss in the region of $3.0m and EBITDA of $1.5m, compared to a market consensus loss of $1m - $1.5m / EBITDA of $3.5m - $4m, and forecast cash reserves of approx. $11m, compared to a market consensus of $15m - $16m.

About Datalex 

Datalex is a leading provider of travel distribution software and solutions which enable global travel industry suppliers and distributors deliver increased content and choice to their customers across multiple sales channels, while enabling significant reductions in distribution costs. Datalex's customers represent the elite of the travel industry and include United Airlines, Scandinavian Airline Systems, Frontier Airlines, Aer Lingus, STA Travel and Copa Airlines.   

Founded in 1985, the company is headquartered in Dublin, Ireland, and maintains offices across Europe, the USA and Asia-Pacific. Datalex is a publicly held company traded on the Irish Stock Exchange (symbol: DLE, and also OTC: DLEXY). For more information, please visit the company's web site at www.datalex.com

This press release contains certain forward-looking statements. Actual results may differ materially from those projected or implied in such forward-looking statements. Such forward-looking information involves risks and uncertainties that could significantly affect expected results

This announcement has been issued through the Companies Announcement Service of

The Irish Stock Exchange.