Shares in travel software company Datalex plunged over 59% today after it said its revenue and profits for the six months to the end of June may have been misstated.
In a trading update today, Datalex said it now expects to report an adjusted EBITDA loss of between $4-1m for the full year.
This is mainly due to a shortfall in services revenue caused by a failure by the end of the year to recover costs incurred in the delivery of the services revenue component of a significant customer deployment.
It said this had happened because customer talks regarding the recovery of this revenue shortfall have not concluded but are on-going.
As it prepared its full year results, Datalex said its board now considers that its revenue, adjusted EBITDA and profit for its half year may have been misstated.
It said this was mainly due to the "accelerated recognition of revenue associated with the significant customer deployment".
Datalex has asked a leading accountancy firm to undertake an independent review of the issue.
Aidan Brogan, the chief executive of Datalex, said today's announcement was "extremely disappointing" for him personally, for the team and for the company's "supportive shareholders".
"I can assure all our stakeholders that we have already identified certain key areas that require improvement and are taking corrective action," he said.
"The fundamentals of the business remain strong. We are confident this is a once-off and we will return to profitability in 2019," Aidan Brogan added.
Datalex said it will review is full year guidance for 2019 and will update the market early next month.
In a note, Davy's said this morning's trading statement leaves many questions unanswered - principally in relation to revenue recognition and the outlook for 2019-2020.
"While the commercial momentum through 2018 was robust, we are moving our recommendation and forecasts to 'under review' until we get more clarity on these key issues," the stockbrokers added.
Shares in the company closed 59% lower in Dublin trade today at just €1 a share.