Investor News

Datalex plc Announces Interim Results For the six months ended 30 June 2006

Dublin, Ireland/August 25, 2006 – Datalex Plc (ISE: DLE; OTC: DLEXY) today announced interim results for the six months ended 30 June 2006.

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Profitability
The profit for the period amounted to $1.6 million ($1.0 million for H1 2005) giving a profit per ordinary share of $0.02 ($0.02 per share for H1 2005).

Revenue & Costs
Total revenues in the period were $12.4m ($14.4m in H12005). In line with expectations E-Business revenue reduced to $8.9 million ($ 11.5 million in H1 2005). The reduction in E-Business revenue was primarily due to our migration towards the transactional model which forfeits short term license revenue for potentially longer term earnings. TPF consulting revenue increased to $3.5 million ($2.9 million in H1 2005) due to an upturn in this market and tighter integration with the rest of the business.

The gross margin declined to 26.6% in H1 2006 from 39.4% in H1 2005. This was due to the predicted decline in E-business revenue and lower margins earned on the increased TPF consulting revenue coupled with an increased cost of sale. Operating costs reduced to $3.2 million from $4.8 million in H1 2005. This is primarily due to the increased capitalisation of development expenditure of $2.4 million ($1.1 million H1 2005). This additional expenditure reflects the group’s ongoing investment in product development as we focus on accelerating the release of our Product Roadmap.

Commenting on the 2006 first half results, Cormac Whelan, Datalex CEO said:
“We have made considerable investment in the airline functionality of our product suite over the last eighteen months and are expanding our development to productise our ‘leisure’ based solutions. This focuses our efforts on expanding our functionality in the dynamic packaging and hosted price and inventory areas. As airlines and travel companies become more strategic about developing alternative distribution and revenue channels this becomes an important part of their infrastructure.

We continue to be successful in closing transaction revenue contracts but as noted previously these do not add to revenue in the short term. A number of significant customers are expected to ‘go live’ on the transaction based model in Q3 and Q4 2006.”