Brief: Datalex Concludes From PWC Review That Co's Rev, Adj. EBITDA, Profit For HY Were Misstated

Datalex

27/03/2019 08:09

March 27 (Reuters) - Datalex PLC  DLE.I :
    * REVIEW CONFIRMED GROUP’S RECOGNITION OF SERVICES REVENUE
FOR HY
WAS NOT IN LINE WITH THE GROUP’S ACCOUNTING POLICY AND WAS
MATERIALLY OVERSTATED
    * AS PER FINDINGS FROM PWC REVIEW, BOARD CONCLUDED THAT CO'S
REVENUE, ADJUSTED EBITDA, PROFIT FOR HY ENDED 30 JUNE WERE
MISSTATED
    * REVIEW FOUND GROUP INCORRECTLY RECOGNISED ABOUT $3.5
MILLION OF
SERVICES REVENUE ASSOCIATED WITH DEPLOYMENT IN HY RESULTS
    * PWC REVIEW FOUND THAT THE GROUP FAILED TO APPLY IFRS 15
APPROPRIATELY IN ITS RESULTS FOR THE HALF YEAR ENDED 30 JUNE
2018
    * PWC REVIEW IDENTIFIED ACCOUNTING IRREGULARITIES AS CAUSE
FOR
OVERSTATEMENT OF REVENUE, NOTING MATERIAL WEAKNESSES IN INTERNAL
CONTROL ENVIRONMENT
    * PWC REVIEW CONFIRMS THAT BOARD WAS NOT INFORMED OF REVENUE
RECOGNITION ISSUES UNTIL JANUARY 2019
    * WILL RESTATE ITS RESULTS FOR THE SIX MONTH PERIOD TO 30
JUNE
2018
    * COMMENCED CHANGE PROGRAMME WHICH HAS INCLUDED
IMPLEMENTATION OF
A NUMBER OF URGENT MEASURES TO ENHANCE INTERNAL CONTROLS
    * PWC REVIEW IDENTIFIED C.$2.9 MILLION OF OTHER SERVICES,
PLATFORM
REVENUE INCORRECTLY RECOGNISED IN H1, OF WHICH C.$0.7 MILLION
DETERMINED NOT RECOVERABLE
    * CHANGE PROGRAMME INCLUDED APPOINTMENT OF TWO SENIOR
RESOURCES AS
HEAD OF FINANCE AND HEAD OF COMMERCIAL FINANCE, IN EARLY JANUARY
2019
    * PROCESS TO IDENTIFY AND APPOINT A NEW CFO IS UNDERWAY
    * CHANGE PROGRAMME ALSO INCLUDED ESTABLISHING A NEW
BUDGETING
PROCESS IN RESPECT OF 2019 FINANCIAL YEAR
    * CHANGE PROGRAMME INCLUDED IMPLEMENTING NEW ACCOUNTING
PROCESSES
IN RELATION TO REVENUE RECOGNITION
    * HAS DRAWN UP, AND IS CURRENTLY IMPLEMENTING, PLANS TO
FURTHER
REORGANISE ITS FINANCE FUNCTION
    * A PROCESS HAS COMMENCED TO PROCURE AN OUTSOURCED INTERNAL
AUDIT
SERVICE

Source text for Eikon:  ID:nRSa1429Ua 
Further company coverage:  DLE.I 

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