Pennant International Group PLC Trading Update & Notice of Interim Results (0538U)
July 28 2022 - 2:00AM
UK Regulatory
TIDMPEN
RNS Number : 0538U
Pennant International Group PLC
28 July 2022
FOR IMMEDIATE RELEASE 28 July 2022
PENNANT INTERNATIONAL GROUP PLC
Trading Update & Notice of Interim Results
Return to positive EBITA; business mix transformed; significant
gross margin improvement
Pennant International Group plc (AIM:PEN) ("Pennant", the
"Group" or "Company"), a leading global provider of training
technology and integrated product support solutions , issues the
following trading update for the six months ended 30 June 2022 (the
"First Half"). The Company expects to publish its Interim Results
on 21 September 2022.
Financial Summary
A preliminary unaudited assessment of the Group's trading for
the First Half indicates:
-- revenues of GBP6.9 million (H1 2021: GBP7.4 million) of which circa 65% are recurring;
-- 52% of revenues generated from software licensing and associated activities (H1 2021: 35%);
-- gross margin of 41% (H1 2021: 21%);
-- earnings before interest, taxation and amortisation of GBP0.1
million (H1 2021: EBITA loss of GBP1.0 million);
-- net debt at period end of GBP4.1 million (H1 2021: GBP1.9
million), see 'Working Capital' section below; and
-- three-year order book at period end of GBP27 million (H1 2021: GBP26 million).
Revenue Composition
Revenues by region and by workstream during the First Half were
as follows:
Revenue by region GBPm Revenue by workstream GBPm
UK, Europe & Middle
East 2.7 Engineered Solutions 1.4
----- -------------------------- -----
North America 2.4 Generic Products 0.4
----- -------------------------- -----
Australasia 1.8 Technical Services 1.5
----- -------------------------- -----
Total 6.9 Software Product/Licences 0.6
----- -------------------------- -----
Software Maintenance 0.8
-------------------------- -----
Software Services 2.2
-------------------------- -----
Total 6.9
-------------------------- -----
Programme Delivery
An update is provided below on the Group's key
'engineered-to-order' programmes:
GD MTE : the first two devices were delivered to the end user's
site during the First Half. One of the devices has successfully
passed site acceptance testing while the other enters testing early
next month. The second two devices are scheduled to be delivered to
an alternative site in September once the relevant facility has
been commissioned ready for their arrival. The programme is on
schedule to be completed before year-end.
UK Helicopter programme: Under this contract with a UK OEM
(worth c. GBP3.5 million), Pennant is required to convert a real
helicopter airframe into a systems trainer. The finished training
device was delivered to the end user's site during the First Half
and has successfully passed site acceptance. All events and
milestones to date have been passed and paid in full and the
programme is scheduled to complete shortly.
UK Apache upgrade progamme : Pennant has been contracted by
Boeing Defence United Kingdom Limited to upgrade Apache Mk 1
training devices to align with the Mk 2 variant (contract value:
GBP8.8 million). The first engineering event was held and passed
during the First Half, and the associated milestone payment has
been invoiced and paid in full post period end.
Working Capital
The Group's net debt position is expected to materially improve
during the second half, as invoices on the above three programmes,
and other contracts, are raised and settled. The sale of the
Group's under-utilised Pennant Court facility is well-progressed,
with exchange of contracts imminent. The sale value is in excess of
the bank's security value and the transaction is anticipated to be
significantly cash positive, providing additional working capital
and funds for product investment if needed.
Global Economic Situation
Like most businesses, the Group is experiencing certain
pressures from inflation in all key regions. The Group is keeping
its pricing policy and supply chain arrangements under review and
where contracts contain escalation mechanisms to respond to
inflation these are being monitored. To help our staff during this
time, and to ensure key employees can be recruited and retained
during this period of intense wage competition, the Group has
awarded all staff a mid-year pay rise.
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
Enquiries:
Pennant International Group www.pennantplc.co.uk
plc
Philip Walker, CEO
David Clements, Commercial &
Risk Director +44 (0) 1452 714 914
WH Ireland Limited (Nomad and www.whirelandcb.com
Broker)
Mike Coe
Sarah Mather +44 (0) 20 7220 1666
Walbrook PR (Financial PR) paul.vann@walbrookpr.com
Paul Vann +44 (0)20 7933 8780
Tom Cooper Mob: +44 (0)7768 807631
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