Good morning!

I'm writing this from the 21st floor of the Hilton Hotel in Warsaw (a superb hotel by the way - highly recommended). Just a flying visit, to see extended family, and check out the branches of DP Poland (LON:DPP) (there's one over the road). This certainly seems like an up & coming city, with shiny new office buildings popping up all over the place. The old town is lovely, and looked authentic, even though I suppose most of it would have been destroyed during the war.

I have to check out fairly soon, so this report will unfortunately be somewhat abbreviated.


Pennant International (LON:PEN)

Share price: 64p (down 18%)
No. shares: 26.5m
Market cap: £17.0m

Contract win - news of a £7m "landmark contract" for this aerospace simulators company. So why has the share price gone down, not up? The company has put out results too:

Interim results to 30 Jun 2015 - the figures look bad. Turnover is down heavily, and the company has swung from a profit last year in H1 to a loss of £0.75m.

Outlook - the Directorspeak is unusual, but sets out the situation clearly;

"Pennant experienced challenging markets in the six months to 30 June 2015. The anticipated second half weighting, highlighted last March is now likely to be significant. Contract awards have been delayed by the weakness of the oil price, election uncertainty in the UK and the complexities of public sector procurement.The outturn for the full year will depend on the timing of anticipated contracts with an aggregate tender value in excess of £15m, which are expected shortly.  The exact timing of the awards will result in an outcome for the year as a whole which could either be in line or significantly below market expectations.  Notwithstanding the outturn for 2015, prospects for 2016 remain very positive and underpin the Directors' decision to increase the interim dividend payment."

It's difficult to know what to make of that! How can we value the company, if even they don't know what the results are going to be like? This just reinforces the inherent lumpiness, and hence unpredictability of this type of company.

Dividends - it's a surprising decision to increase the interim dividend from 0.9p to 1.0p, which the company says is due to their confidence in the prospects for 2016.

Balance…

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