REG - Pennant Int. Group - Business Update

Pennant InternationalAnnouncement

03/07/2025 07:00

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RNS Number : 5107P  Pennant International Group PLC  03 July 2025

FOR IMMEDIATE RELEASE
 
  03 July 2025

 

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.

 

PENNANT INTERNATIONAL GROUP PLC

("Pennant", the "Company" and together with its subsidiaries the "Group")

 

Business Update

 

Pennant International Group plc (AIM:PEN), the systems support software and
training solutions company, provides the following business update.

 

Conclusion of Property Disposal Programme

 

The Company is pleased to report that the sale of the final two freehold units
at Staverton Connection (Units D1 and D2) has now completed on a
sale-and-leaseback basis.

 

The aggregate sale consideration for the final two units is £1.125 million
(excluding VAT). Pennant remains in occupation of the two units under a full
repairing lease which has been entered into for a five-year term, with a
three-year 'tenant only' break clause. The annual rent is £95,000 (exclusive
of VAT, utilities and related outgoings).

 

The net proceeds of the final property sales will be applied to reducing the
Group's overdraft borrowings and, after associated expenses, the transaction
has realised a small loss against book value as at 31 December 2024.

 

This transaction successfully concludes the property disposal programme
launched in September 2024 which has realised £3.2 million in gross sale
proceeds in line with the programme's objectives.

 

Trading update

 

The Company is seeing increased interest in its products and services and,
together with a growing pipeline of opportunities for 2025 and beyond, the Q2
2025 outcome of the UK Government's defence spending review augurs well for
the remainder of the financial year and in the medium term.

 

Negotiations with the Ministry of Defence on the GenFly technology upgrade
contract are progressing well and Pennant looks forward to announcing formal
contract award, scheduled for Q3 of the current financial year.

 

As expected, 2025 revenue is anticipated to be significantly
second-half-weighted, particularly noting the likely award date for the GenFly
contract and delayed project work through Q2 within the Company's Track Access
(rail) business.

 

While the expected conversion of the software sales pipeline has shifted into
H2, the campaign to migrate legacy OmegaPS users to Auxilium (via GenS
subscriptions) is proceeding to plan and, when combined with new subscription
sales, Pennant's annual recurring revenue (ARR) attributable purely to
software subscriptions and maintenance now exceeds £2m for the first time in
the Group's history.

 

The Directors remain confident that the Group will meet market expectations
for the full year, with the second half revenue weighting achievable through
the continued delivery of existing contracts, execution of Pennant's 'go to
market' strategy for the Auxilium suite, and successful conversion of the
GenFly contract (which is expected to contribute circa 15% of 2025 revenue).

 

A further trading update will be provided in August ahead of the Interim
Results.

 

Enquiries:

 

 Pennant International Group plc                                       www.pennantplc.com (http://www.pennantplc.com/)
 David Clements, Company Secretary                                     +44 (0) 1452 714 914

 Zeus (Nomad)                                                           www.zeuscapital.co.uk (http://www.zeuscapital.co.uk/)

 Mike Coe / Darshan Patel (Investment Banking)                         +44 (0) 203 829 5000

 Cavendish Capital Markets Limited (Broker)                            www.cavendish.com (http://www.cavendish.com/)
 Ben Jeynes / Callum Davidson / George Lawson (Corporate Finance)      +44 (0) 207 220 0500
 Michael Johnson / Dale Bellis / Sunila de Silva (Sales and Corporate
 Broking)

                                                                       pennant@walbrookpr.com (mailto:pennant@walbrookpr.com)

 Walbrook PR (Financial PR)
 Tom Cooper                                                            +44 (0)20 7933 8780

 Joe Walker                                                            Mob: +44 (0)7407 020 470

Notes to editors:

Pennant International Group plc (AIM: PEN) is a technology driven, leading
global provider of system support software and services, technical services,
and training solutions. It supports its global customer base in the design,
development, operation, maintenance, and training of complex assets, to
maximise operational and maintenance efficiency.

 

Its key markets include Aerospace, Defence and Rail, and adjacent
safety-critical markets such as Shipping, Nuclear and Space.

 

 The Group addresses the market through three key business segments:

 

•       Software: a key generator of recurring revenues through the
provision of a suite of software tools designed to help clients: manage and
use complex data; ensure equipment availability at optimal cost; and comply
with industry standards.  Its Integrated Product Support (IPS) and Integrated
Logistics Support (ILS) software and services equips customers with powerful
market-leading toolsets to manage, model and utilise complex equipment data.

 

•     Technical Services: drives repeatable revenues through expert
support for users of Pennant and third-party solutions including consultancy,
support and maintenance, training and bespoke development.

 

•     Training Systems: project-based revenues relating to the design and
build of hardware, software and virtual training solutions for maintainers and
operators of aircraft, ships and land systems.

 

Pennant is strategically focused on sustainable recurring and repeatable
revenues and profitability growth, shifting its model towards high margin
software and services. Against a climate of rising defence budgets and the
burgeoning technological complexity of military, aviation and rail platforms,
the demand for these solutions is expected to grow substantially.

 

Headquartered in Cheltenham, UK, the Group operates worldwide, with offices in
Europe, North America and Asia-Pacific, serving markets with high barriers to
entry often in regulated industries.

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