Pennant International (LON:PEN) are the second of the companies I was advised to take a peek at and which made it on to my list of potential interest (or part one, anyway). What they do seems quite broad to me, but the best way of understanding is splitting up the company into its three divisions. Firstly, Training Systems - the group's largest division - which contributes well over half of revenues. They 'provide and support' training systems based on 'emulation, simulation and virtual reality'. For a flavour, the best place to look is the contracts they're undertaking; for instance, a £12m contract with AgustaWestland (the helicopter manufacturer) to produce 'maintenance training equipment', a contract with the MoD to provide a 'virtual reality parachute trainer' and a 5-year agreement through BAE with the Australian Army to provide a host of training aids. Data Services, their smallest division, provides 'high quality media, graphics, VR software and documentation'. It sounds to me like there's a significant overlap with Training Services, and there are some inter-segmental revenues, but I suppose Data Services do do other things; it looks like they mainly produce manuals and documentation for new parts. They're also working on parachute flight simulation software for Singapore, though how this contract got put with Data Services and the VR parachute trainer got put with Training Systems is slightly confusing.. Finally, anyway, there's the.. software division! You'll be relieved to hear that this doesn't overlap with the other ones as might be expected, though. As far as I can see, the sole purpose of the Software Division is as a distributor/maintainer/consultant of a piece of software; OmegaPS, which is (unsurprisingly) a little complicated to me. They sell ongoing contracts for provision, upgrade, consultancy and so on, anyway. The usage list is quite impressive.
Well, that's out of the way, anyway. It is quite an important exercise, though; with many small cap, particularly business-to-business companies, what they actually do isn't quite as straightforward as it might be. To people who don't work in the sector, how they make their money isn't immediately obvious - but is still of paramount importance. So, we have an overview - they're basically a software company with a training twist (the training manuals fit in quite nicely here, I suppose) - and they…
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