REG - Pennant Int. Group - Trading Update & Notice of Interim Results

Pennant InternationalAnnouncement

28/07/2022 07:16

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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 £6.9 million (H1 2021: £7.4 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 £0.1
million (H1 2021: EBITA loss of £1.0 million);

·      net debt at period end of £4.1 million (H1 2021: £1.9 million),
see 'Working Capital' section below; and

·      three-year order book at period end of £27 million (H1 2021:
£26 million).

 

Revenue Composition

 

Revenues by region and by workstream during the First Half were as follows:

 

 Revenue by region             £m       Revenue by workstream      £m
 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. £3.5
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: £8.8 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 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 (Nomad and Broker)              www.whirelandcb.com (http://www.whirelandcb.com)
 Mike Coe                                           +44 (0) 20 7220 1666

 Sarah Mather

 Walbrook PR (Financial PR)                         paul.vann@walbrookpr.com (mailto:paul.vann@walbrookpr.com)
 Paul Vann                                          +44 (0)20 7933 8780

 Tom Cooper                                         Mob: +44 (0)7768 807631

 

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