REG - Pennant Int. Group - 2021 Final Results
25/05/2022 08:31
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RNS Number : 7348M Pennant International Group PLC 25 May 2022
FOR IMMEDIATE RELEASE
25 May 2022
PENNANT INTERNATIONAL GROUP PLC
Preliminary Results for the Year Ended 31 December 2021
Significantly Improved trading performance in 2021;
Positive trading momentum continues into current year
Pennant International Group plc (AIM:PEN)("Pennant", the "Group", the
"Company"), a leading global provider of training technology and integrated
product support solutions, announces its Preliminary Results for the Financial
Year ended 31 December 2021.
Commenting on the Group's performance, John Ponsonby, Chairman, said:
"I am pleased to report that the Group has delivered a significantly improved
performance in 2021 compared with 2020 albeit the extent of the improvement is
impacted by the well documented issues we have experienced on the UK
Maintenance Training Equipment ("MTE") programme.
"Revenue was up in both the Technical Training Division (TTD) and Integrated
Product Support (IPS) Division. This was achieved despite the ongoing impact
of Covid-19 and a challenging first half on which we reported an EBITA loss of
£1.0 million. As anticipated, the second half was stronger, generating an
EBITA profit of £0.2m, resulting in an EBITA loss of £0.8 million for the
year as a whole.
"Particularly pleasing has been the performance of the IPS division, where
significant progress has been made in line with our strategy to increase
visibility of revenues and, in particular, recurring revenues which are now
running at an estimated £5.5 million for 2022.
"For the year to 31 December 2021 as a whole, the Group recorded consolidated
revenues of £16.0 million (2020: £15.1 million) and a consolidated loss
before tax of £2.5 million (2020: loss before tax £3.1 million). The loss
before interest, tax and amortisation (EBITA) was £0.8 million (2020: EBITA
loss of £1.6 million) and EBITDA loss was £0.1 million (2020: EBITDA loss of
£0.9 million)."
Financial Summary
· Group revenues of £16.0 million (2020: £15.1 million);
· Gross profit margin of 27% (2020: 29%);
· Realisation of £0.9 million in costs savings as planned in
2020;
· Loss before tax of £2.5 million (2020: loss before tax of
£3.1 million);
· EBITA loss of £0.8 million (2020: EBITA loss of £1.6
million);
· EBITDA loss of £0.1 million (2020: EBITDA loss of £0.9
million);
· Loss for the year attributable to shareholders of £1.6 million
(2020: loss of £2.6 million);
· Basic loss per share of 4.41p (2020: loss of 7.22p);
· Group net assets at year-end of £11.1 million (2020: £12.5
million);
· Net debt at year-end of £3.5 million (2020: net debt of £1.5
million);
· No final dividend recommended (2020: £NIL);
· Three-year order book at year-end stood at £22 million (2020:
£31 million).
Operational Summary
New contract awards, amendments and operational achievements during the year
are set out below:
· first commercial aerospace customer secured for IPS software
and services in North America with a USD$1.1 million contract value;
· continued on-time and on-budget delivery of the UK Helicopter
programme valued at £3.4 million;
· successful installation and commission of generic training
devices in Qatar, enabling revenue to be recognised;
· completion of build and factory acceptance on products for
second Middle East customer, which were then delivered and installed in the
second half; and
· award of Australian defence services contract worth AUD$1.3
million.
Post period end highlights
· Boeing Defence United Kingdom Limited (BDUK) £8.8 million
contract awarded to Pennant. First milestone has been successfully passed.
· Awarded USD$1.8 million contract for the supply of software
and services to a second new customer in the North American commercial
aerospace market.
· Received an order worth up to £250,000 from UK Defence for
the supply of the Group's sophisticated, proprietary rotary-wing aircraft
systems training software and related maintenance services.
· Accepted an offer, subject to contract, in excess of book
value for the Group's property, Pennant Court which is now surplus to
requirements due to the shift to hybrid working and the strategic focus on
software development activities.
· Contracted three-year order book now stands at more than £32
million, with approximately £13 million is scheduled for recognition in 2022
and £13m in 2023, with the balance in 2024.
On current trading and prospects, Mr Ponsonby concluded:
"Looking forward, we are confident that our Group performance metrics in 2022
will be achieved, and our strategy to continue to build our global footprint
and develop long-term partnerships, will bring further sales. The post period
end realignment of operations into a global delivery model will enable the
full spectrum of Pennant's software, technology and services to be offered and
delivered in all three key regions.
"The current year has started well. In March 2022, we finally secured the
Major Programme for Boeing Defence United Kingdom Limited - a contract worth
£8.8 million over three years. With other contract wins also secured, our
contracted three-year order book now stands at more than £32 million.
"On this basis, the Board views prospects for 2022 with increasing confidence
and looks forward to reporting a significantly improved performance for the
current year."
Enquiries:
Pennant International Group plc www.pennantplc.co.uk (http://www.pennantplc.co.uk)
Philip Walker, CEO +44 (0) 1452 714 914
David Clements, Commercial & Risk Director
WH Ireland Limited www.whirelandplc.com/capital-markets
(http://www.whirelandplc.com/capital-markets)
Mike Coe/ Sarah Mather +44 (0) 207 220 1666
Walbrook PR (Financial PR) pennant@walbrookpr.com
Paul Vann / Tom Cooper +44 (0)20 7933 8780; +44 (0)7768 807631
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.
CHAIRMAN'S STATEMENT
I am pleased to report that the Group has delivered a significantly improved
performance in 2021 compared with 2020 albeit the extent of the improvement is
impacted by the issues we have experienced on the General Dynamics MTE
programme.
Revenue was up in both the Technical Training Division (TTD) and Integrated
Product Support (IPS) Division. This was achieved despite the ongoing impact
of Covid-19 and a challenging first half upon which we reported an EBITA loss
of £1.0 million. As anticipated, the second half was stronger, generating an
EBITA profit of £0.2 million, resulting in an EBITA loss of £0.8 million for
the year as a whole.
Particularly pleasing has been the performance of the IPS division where
significant progress has been made in line with our strategy to increase
visibility of revenues and, in particular, recurring revenues which are now
running at an estimated £5.5 million for 2022.
Our Strategy
The underlying strengths of Pennant - our long-term customer relationships,
our specialist services and our quality-assured reputation - remain the solid
foundations of our proposition and present formidable barriers to entry for
any new market entrants.
Our focus remains firmly on increasing the proportion of the Group's revenues
which derive from the sale of software and services, particularly those of a
recurring nature, while expanding the Group's market coverage and addressing
gaps in the product range through the Group's 'Innovation' programmes.
In addition, the Group continues to seek other strategic opportunities to
partner with or acquire complementary businesses.
Post period end, the Group has realigned operations to enable effective and
efficient global delivery, with the Group organised into key regions (UK, EU
& Middle East, North America, and Australia). This is designed to allow
the 'full spectrum' of Pennant products and services to be offered and
delivered in all three regions.
Key Financials
For the year ended 31 December 2021, the Group recorded consolidated revenues
of £16.0 million (2020: £15.1 million). Turnover was underpinned by the
Group's contracted revenue base, in particular, the continued delivery of the
Group's overseas services contracts and the successful achievement of a number
of operational milestones.
The decisive action taken to realign costs in 2020 has resulted in an
annualised staff costs reduction of £0.9 million.
The Group posted a consolidated loss before tax of £2.5 million (2020: loss
before tax £3.1 million) with an EBITA loss of £0.8 million (2020: EBITA
loss £1.6 million).
Dividend
Taking account of the Group's 2021 financial performance, the trading outlook
and the Group's cash position, the Directors believe that it is both prudent
and in the Company's and shareholders' current best interests to retain cash
for working capital.
The Board will therefore not be recommending the payment of a final dividend
for the year ended 31 December 2021.
Our People
To deliver a successful set of results in 2022, the Group must have a
committed workforce, appropriately incentivised and motivated. Under
extraordinarily difficult circumstances, I would like to publicly thank all of
our employees for their commitment to supporting the Group's intent for 2021
and for the flexibility they have demonstrated in meeting specific contract
outputs.
It is also our people we rely on to deliver our strategy and in order to
deliver a successful set of results in 2022 we must pay particular attention
to their needs going forward and as a Board we remained focused on supporting
them.
Governance
The Board is committed to maintaining robust corporate governance. It has
worked closely with its advisors and in 2021 monitored governance frameworks
to ensure strong, proportionate governance throughout the Group; this is
important given the number of geographies in which we are present. The Board
has established appropriate risk management procedures and keeps key risks to
the Group under regular review.
Contracted Order Book & Pipeline Update
The conversion of the Group's pipeline into new orders continued to be
impacted during the Period but proceeded broadly in line with expectations in
the second half of the year, with a strong final quarter. The Group has
maintained this trading momentum into 2022 with over £10 million of new
orders secured during the first quarter, as highlighted in the Contracts &
Order Book Update announcement released on 23 March 2022. The post period end
contract wins have delivered a strong start to the current year, with the
contracted order book now standing at £32 million.
The overall value of the Group's active pipeline (including the Major
Programme) at year-end was in excess of £60 million.
Outlook
Looking forward, we are confident that our Group performance metrics in 2022
will be achieved, and our strategy to continue building our global footprint
and developing long-term partnerships, will generate further sales. The post
period-end realignment of operations into a global delivery model will enable
the full spectrum of Pennant's products and services to be offered and
delivered in all three key regions.
The current year has started well. In January we finally secured the Major
Programme for Boeing Defence United Kingdom Limited - a contact worth £8.8
million over three years. With other contract wins also secured, our
contracted three-year order book now stands at more than £32 million.
On this basis, the Board views prospects for 2022 with increasing confidence
and looks forward to reporting a significantly improved performance for the
current year.
In addition, the Board believes that the Group's underlying strengths - our
long-term customer relationships with governments and major OEMs, our
specialist services and our quality-assured reputation - will continue to
provide a solid foundation for continued recovery and long-term success.
J Ponsonby
Chairman
CHIEF EXECUTIVE'S REVIEW
Encouraging signs
The year under review has seen significant progress made both financially and
strategically despite the continuing impact of Covid-19 across the Group's
main markets, and the challenges and the well documented impact of the MTE
programme.
The successful integration of the R4i suite of software, coupled with the
structural and operational changes implemented have advanced the Group's
strategic objectives, to diversify and enhance our recurring revenue streams,
thereby reducing our historic reliance on substantial engineered-to-order
contracts, whilst also improving efficiency.
Financial review
The results and the key financial performance indicators are set out below.
Performance
Revenue for the year was delivered in line with expectations, with solid
progress and improved revenues achieved across both divisions.
The Group's contracted order book remained resilient with a good performance
achieved in North America and Australia and, as anticipated, the business
produced a much-improved performance in the second half of 2021.
The post period-end contract wins have ensured momentum has continued into
2022, with the contracted order book now standing at £32 million.
The table below highlights the second half improvement.
£m H1 H2 2021
Revenue 7.4 8.6 16.0
Gross Profit 1.6 2.8 4.4
Gross Profit % 21% 33% 27%
Admin Costs (net of Other Income) (3.2) (3.3) (6.5)
Operating Margin (1.7) (0.5) (2.2)
EBITA (1.0) 0.2 (0.8)
The gross profit margin for the period was 27% (2020: 29%) with the impact of
the MTE programme masking the underlying improvements delivered during the
period which shows an underlying gross margin of 41%.
Staff costs decreased to £8.7 million (2020: £9.6 million), benefitting from
the positive impact of the revised operational structure, generating a net
£0.9 million reduction.
As a result, the operating margin recovered to a loss of £2.2 million (2020:
operating loss £3.0 million) and an EBITA loss of £0.8 million (2020: EBITA
loss £1.6 million).
Underlying performance
Whilst the Group's performance demonstrates signs of improvement, the overall
result was significantly impacted by the MTE programme with its continuing and
well publicised challenges impacting the business.
As outlined in previous announcements, the challenges of the MTE Programme
negatively impacted the financial performance of the TTD and Group result
throughout the year.
The MTE programme is scheduled to complete within 2022, although in order to
accommodate MOD facilities readiness, the delivery and acceptance testing of
the second set of MTE devices are now anticipated to take place in July and
September 2022 respectively. It is anticipated that the contract will have
little or no further financial impact on the current year.
Notwithstanding the impact of this specific programme, the underlying
performance of the Group demonstrates encouraging signs of recovery as
illustrated in the table below.
£m Excl MTE MTE 2021
Revenue 14.2 1.8 16.0
Cost of sales (8.4) (3.2) (11.6)
Gross Profit / (Loss) 5.8 (1.4) 4.4
Gross Profit % 41% (78%) 27%
Admin Costs (net of Other Income)* (6.5) - (6.5)
Operating Margin (0.7) (1.4) (2.2)
EBITA 0.6 (1.4) (0.8)
* Admin costs associated with the delivery of the MTE programme are excluded
from the above analysis
Year-end order book
At 31 December 2021, the Group's three year contracted order book stood at
£22 million (2020: £31 million), of which £10 million of revenue (2020:
£14 million) is scheduled for recognition in 2022 based on anticipated
completion of generic products, execution of software & services projects
and progress made on engineered-to-order contracts.
Following additional contract wins after the year-end, including the BDUK
award, the current three year contracted order book now stands at £32
million, of which approximately £13 million is scheduled for recognition in
2022 and £13 million in 2023.
Of the total order book, 42% (2020: 46%) is denominated in sterling, 36%
(2020: 39%) is denominated in Canadian dollars and 22% (2020: 15%) is
denominated in Australian dollars. Any movement of sterling to the Canadian or
Australian dollars would potentially impact the IPS business.
Taxation
The Group's tax position shows a tax credit of £0.9 million (2020: tax credit
of £0.5 million). The Group has unrelieved UK tax losses carried forward of
£6.7 million (2020: £4.5 million), all of which has been recognised in the
deferred tax balance as at 31 December 2021.
Research & development
Research and development tax credits claimed in the UK during the year
amounted to £1.4 million (2020: £1.6 million), with further claims on
current projects expected to be made during 2022. These claims relate to the
development of innovative new software products, many of which now form part
of Pennant's enhanced product portfolio and are being successfully sold
internationally.
In line with the Group's core strategic objectives, investment in innovation
has been targeted to expand the Group's market coverage, addressing gaps in
the product range and improving the overall customer proposition. During the
period, the Group invested circa £1.0 million in the development of new and
enhanced solutions and the following new products were successfully completed
or were under development:
· GenS software (OmegaPS successor product) release 1;
· Engine Systems Start Trainer - modular software training
solution;
· New Signal Sighting software system developed for Network Rail;
and
· Upgraded Loadmaster virtual software training system developed
for US market.
Pennant anticipates that it will continue to invest in new technology-led
solutions during 2022 albeit, given the stage of development of its pipeline,
investment will be at a lower level than in 2021. The Group has an active
pipeline of potential product innovations and improvements that are undergoing
a detailed assessment process with a view to obtaining Board funding approval
if a business case can be established.
Cashflow
Cash used in operations amounted to £0.1 million (2020: cash generated in
operations of £3.1 million). This reflects the stage of completion on major
programmes with contract milestones to be achieved in 2022 ahead of invoicing
and cash payments being received.
The Group had net borrowings at the year-end of £3.5 million (2020: net
borrowings of £1.5 million) excluding lease liabilities.
Divisional performance
Divisional financial performance is set out below and further information
about the business of each division is provided in the 'About Pennant' section
of the Annual Report.
Integrated Product Support (IPS)
The Group's IPS division has traditionally focused on the development of the
OmegaPS LSAR software product and the provision of consultancy, training and
support services in relation thereto.
The successful integration of the R4i software suite alongside the existing
OmegaPS suite of products has significantly enhanced the Group's operational
footprint in Australia and the United States to deliver software and
consultancy programmes, providing much greater traction in and between two of
the Group's principal target markets.
The table below summarises the improvements in revenue and contribution.
2021 2020
£m £m
Revenue
- Products & Licenses 1.1 0.5
- Maintenance 1.4 1.3
- Services 3.1 3.5
Total 5.6 5.3
Divisional Contribution 0.9 0.5
Allocation of Group costs (0.7) (0.6)
Profit / (Loss) for the period 0.2 (0.1)
Of the revenues above, maintenance and services revenues are essentially
recurring revenues with product and licenses representing new sales that will
subsequently lead to additional recurring revenues.
In both 2021 and 2020, recurring revenues accounted for the majority of
revenues (80%). Services revenues in 2021 were impacted by the timing of a
contract renewal in Canada (resolved in December 2021) which resulted in
reduced billing in the final quarter of the year and a drop in annual
revenues. Recurring revenues were primarily generated from consultancy
services (55%) and long-term software maintenance agreements (25%),
predominantly in North America and Australia.
The significant increase in Product & Licenses was driven by R4i software
sales, with the associated recurring maintenance revenues (circa 20% per
annum) to follow.
During the year Pennant secured its first commercial aerospace customer for
S1000D software and services in North America.
Strategically the Group continues to invest in the internally funded
development of our Omega PS successor product, known as GenS (redesigned to
ensure legacy, current and future LSA standards are quickly and easily
supported, with a modern, easy to use interface). The first version was
released in 2021 with the full product suite expected to be released in early
2023.
The divisional contribution was much improved in 2021 resulting in a profit
for the period (after the allocation of Group costs) of £0.2 million compared
to a loss of £0.1 million in the prior year.
Post period contract wins, including securing a second commercial aerospace
customer, have maintained momentum in the software business resulting in
contracted run rate revenues of approximately £7 million for 2022, of which
£5.5 million is considered to be recurring revenue.
It is pleasing to see the improved visibility that this Division's recurring
revenue provides and the Board remains highly focused on increasing the
proportion of Group sales generated from these services.
Technical Training Division (TTD)
Revenues for the year increased by £0.5 million to £10.3 million (2020:
£9.8 million) primarily as a direct result of the delivery of the contracted
order book.
The Group's TTD is focused on the design and build of generic and
platform-specific training solutions and the provision of related technical
and support services.
The performance of TTD is summarised below:
2021 2020
£m £m
Revenue
- Engineered 4.2 3.6
- Generic 2.6 2.7
- Technical Services & Support 3.5 3.5
Total 10.3 9.8
Divisional Contribution (1.0) (1.6)
Allocation of Group costs (1.4) (1.3)
Loss for the period (2.4) (2.9)
Revenues from TTD were predominantly generated from product sales, which
accounted for 66% (2020: 64%) of the divisional revenues.
The balance of revenues was generated from the strong recurring technical and
support services business which was largely stable throughout the year.
During the period notable operational achievements included:
o critical design review successfully passed on UK Helicopter trainer
programme, on time and on budget;
o after significant Covid-19 related delays, successful installation and
commission of generic training devices in Qatar, enabling revenue to be
recognised; and
o completion of build and factory acceptance on products for second
Middle East customer, ready for delivery and installation in the second half.
Board change
On behalf of the Board, I would like to take this opportunity to thank Mervyn
Skates, who stood down as a Director in April 2022, for his service over the
last three years. Mervyn has played a key role in developing Pennant's
operational delivery governance, leading the development of technical training
solutions. We wish Mervyn every success for the future
Post period end
We have made an excellent start to 2022 in terms of order intake, as already
announced. In March, we at long last secured the Major Programme for Boeing
Defence United Kingdom Limited - a contact worth £8.8 million over three
years with the majority of revenue expected to be recognised in 2023. Work on
the contract has commenced and I am pleased to report that the first milestone
has just been successfully passed.
Also, in Q1 2022 the Group has secured a USD$1.8 million contract comprising
software licenses with a new customer in the North American commercial
aerospace market. Furthermore, we have secured a new contract to supply
training software and services worth £250,000 to UK Defence and £200,000 of
orders from rail industry customers.
I am also pleased to report that the Board has accepted an offer, subject to
contract, in excess of book value for Pennant Court, one of the Group's
freehold properties, which is now surplus to requirements due to the shift to
hybrid working and the strategic focus on software development activities. The
majority of any sales proceeds are expected to be used to repay and reduce
existing debt facilities, with a proportion also being retained for working
capital purposes.
The operational improvements achieved through the year, together with the post
period-end contract wins and our improved contracted order book, provide a
firm platform for a successful recovery and growth in the current year.
Philip Walker
Group CEO
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR Ended 31 December 2021
Notes 2021 2020
Continuing operations £000s £000s
Revenue 15,965 15,056
Cost of sales (11,609) (10,676)
Gross profit 4,356 4,380
Intangible asset impairment - (222)
Land and buildings revaluation 117 -
Restructuring expenses - (541)
Other administration expenses (6,826) (7,156)
Administrative expenses (6,709) (7,919)
Other income 203 525
Operating loss (2,150) (3,014)
Finance costs (329) (125)
Loss before taxation (2,479) (3,139)
Taxation 2 865 513
Loss for the year attributable to the equity (1,614) (2,626)
holders of the parent
Earnings per share
(4.41p) (7.22p)
Basic
(4.41p) (7.22p)
Diluted
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
Notes
2021 2020
£000s £000s
Loss for the year attributable to the equity holders of the parent
(1,614) (2,626)
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
(64) 41
Items that will not be reclassified to profit or loss 353
Net revaluation gain
-
Deferred tax charge - property, plant and equipment
(156) (18)
Total comprehensive loss for the period attributable to the equity holders of (1,481) (2,603)
the parent
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2021
Notes 2021 2020
£000s £000s
Non-current assets
Goodwill 2,403 2,428
Other intangible assets 5,081 5,570
Property, plant and equipment 6,009 5,904
Right-of-use assets 661 830
Deferred tax assets 850 91
Total non-current assets 15,004 14,823
Current assets
Inventories 865 1,081
Trade and other receivables 4,528 4,884
Corporation tax recoverable 330 533
Cash and cash equivalents 901 1,439
Total current assets 6,624 7,937
Total assets 21,628 22,760
Current liabilities
Trade and other payables 3,595 4,120
Bank overdraft 4,441 2,892
Current tax liabilities 367 200
Lease liabilities 209 193
Deferred consideration on acquisition 432 367
Total current liabilities 9,044 7,772
Net current assets / (liabilities) (2,420) 165
Non-current liabilities
Lease liabilities 529 720
Deferred tax liabilities - 192
Warranty provisions 122 122
Contingent consideration on acquisition 789 1,421
Total non-current liabilities 1,440 2,455
Total liabilities 10,484 10,227
Net assets 11,144 12,533
Equity
Share capital 1,832 1,822
Share premium account 5,345 5,295
Capital redemption reserve 200 200
Retained earnings 2,687 4,243
Translation reserve 226 290
Revaluation reserve 854 683
Total equity 11,144 12,533
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Capital redemption reserve
Share Share Retained earnings Translation reserve Revaluation Total equity
capital Premium reserve
£000s £000s £000s £000s £000s £000s £000s
At 1 January 2020 1,806 5,100 200 6,759 249 730 14,844
(Loss) for the year - - - (2,626) - - (2,626)
Other comprehensive income - - - - 41 (18) 23
Total comprehensive income 1,806 5,100 200 4,133 290 712 12,241
Issue of new ordinary shares 16 195 - - - - 211
Recognition of share based payment - - - 81 - - 81
Transfer from revaluation reserve - - - 29 - (29) -
At 31 December 2020 1,822 5,295 200 4,243 290 683 12,533
(Loss) for the year - - - (1,614) - - (1,614)
Other comprehensive income / (loss) - - - - (64) 197 133
Total comprehensive income 1,822 5,295 200 2,629 226 880 11,052
Issue of new ordinary shares 10 50 - - - - 60
Recognition of share based payment - - - 32 - - 32
Transfer from revaluation reserve - - - 26 - (26) -
At 31 December 2021 1,832 5,345 200 2,687 226 854 11,144
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
Notes 2021 2020
£000s £000s
Net cash from operations (127) 3,145
Investing activities
Payment for acquisition of subsidiary, net of cash acquired
(549) (791)
Purchase of intangible assets (966) (1,283)
Purchase of property, plant and equipment (134) (118)
Proceeds from disposal of property, plant and equipment
22 -
Net cash used in investing activities (1,627) (2,192)
Financing activities
Proceeds from issue of ordinary shares 60 45
Repayment of lease liabilities (309) (277)
Net cash from financing activities (249) (232)
Net (decrease)/increase in cash and cash equivalents (2,003) 721
Cash and cash equivalents at beginning of year (1,453) (2,242)
Effect of foreign exchange rates (84) 68
Cash and cash equivalents at end of year (3,540) (1,453)
Abbreviated notes to the consolidated financial statements for the year Ended
31 December 2021
1. Basis of Preparation
The financial information set out in this preliminary announcement does not
constitute statutory accounts for the purposes of the Companies Act 2006.
The statement of financial position at 31 December 2021 and income statement,
statement of changes in equity, statement of cash flows and associated notes
for the year ended 31 December 2021 have been extracted from the Group's 2021
financial statements upon which the auditor opinion is unqualified.
The financial information in this preliminary statement has been prepared in
accordance with the accounting policies, and on the basis set out, in the
Group's 2021 financial statements.
The 2021 Annual Report and Accounts will be available on the Company's
website: www.pennantplc.co.uk (http://www.pennantplc.co.uk) Copies may be
obtained by contacting the Company Secretary at Pennant Court, Staverton
Technology Park, Cheltenham GL51 6TL.
2. Taxation
2021 2020
£000s £000s
Recognised in the income statement
Current UK tax credit 80 216
Foreign tax expense (365) (360)
In respect of prior years 62 25
Sub-total current tax (223) (119)
Deferred tax credit relating to origination and reversal of temporary
differences
1,205 663
In relation to prior years
150 (7)
Effect of tax rate change (272) (24)
Exchange rate difference 5 -
Subtotal deferred tax 1,088 632
Total P&L tax credit 865 513
Other Comprehensive Income charge for the period - Deferred tax
(156) (18)
Reconciliation of effective tax rate
Loss before tax (2,479) (3,139)
Tax at the applicable rate of 19.00% (2020: 19.00%) 471 596
Tax effect of expenses not deductible in determining taxable profit
(18) (50)
Tax effect of income excluded from taxable profits 181 29
Impact of R&D tax credits 34 93
Foreign tax expensed 38 (115)
Effect of different tax rates of subsidiaries operating in other jurisdictions
(93) (7)
Effect of lower / (higher) rate of deferred tax 220 (34)
Deferred tax not recognised 12 (35)
Effect of adjustments for prior years (current tax) 62 25
Effect of adjustments for prior years (deferred tax) 150 (7)
Other differences (192) 18
Total tax credit 865 513
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