Datalex has granted 1.85 million share options to help motivate the two top executives hired last year to lead a turnaround at the travel retail software company following an accounting scandal.
The options allow the managers, chief executive Sean Corkery and chief financial officer Niall O'Sullivan, to buy company shares from December 2023 at 55 cent each, the price at which Datalex's shares were trading last week when the options were awarded, according to stock-exchange filings.
The options will be “in the money” only if the company’s shares rise in the meantime.
The options – equating to 2.2 per cent of Datalex’s current number of shares in circulation – were agreed as part of the recruitment process of both executives last year. Separately, shareholders agreed at an annual general meeting to allow the company award executive stock options valued at up to 100 per cent of annual salary, subject to performance.
Datalex shares were changing hands at as low as 22.2 cent in mid-July, when trading in the stock resumed after a near 15-month extension. Mr Corkery spent almost €150,000 buying about 500,000 shares in the open market when they were near their lows that month. The company’s chairman of one year spent about €49,200 acquiring 164,166 around that time.
Earnings forecast
The company, which saw business hit by the Covid-19 crisis earlier this year as it sought to get over the accounting debacle that emerged in 2019, raised its full-year earnings forecast late last month on the back of new contracts with a number of Chinese customers, cost-cutting and the freeing up of some provisions previously set aside for client bad debts.
Mr Corkery told a shareholder meeting in September that Datalex was well placed to benefit as digital sales lead a recovery in airlines’ passenger bookings, carriers seek to promote pricing offers at scale, and they cut back on building their bespoke IT systems to use software companies’ products.
At the meeting, shareholders backed a deal to extend the term of €11.3 million of loans secured last year from businessman Dermot Desmond’s Tireragh vehicle by 12 months to November 2021. They also gave the nod for Datalex to borrow up to an additional €10 million from Tireragh, repayable on the same date. Mr Desmond owns 29.8 per cent of the company.
Datalex plans to raise equity by late next year to fund the repayment of the Tireragh loans and make sure it has additional working capital.
