REG - Pennant Int. Group - Trading Update

Pennant InternationalAnnouncement

20/01/2022 07:05

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RNS Number : 0240Z  Pennant International Group PLC  20 January 2022

 
 

 

FOR IMMEDIATE RELEASE
 
20 January 2022

 

PENNANT INTERNATIONAL GROUP PLC

 

Trading Update

 

 

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 year
ended 31 December 2021 ("FY21"). The Company expects to publish its full-year
results during May 2022.

 

A preliminary unaudited assessment of the Group's trading for FY21 indicates:

 

·      revenues of circa £16 million;

·      loss before interest, taxation and amortisation of circa £0.6
million;

·      net debt at year-end of £3.6 million;

·      three-year order book at year-end of £22 million, of which £10
million is scheduled for delivery in 2022.

 

As expected, trading improved in the second half of FY21 (with the Group
generating positive EBITA of circa £0.4 million for the period 1 July to 31
December) albeit the improvement was lower than budgeted as a result of two
material factors, detailed below.

 

MTE Programme

 

The challenges associated with the MTE programme were previously highlighted
in the Interim Results announcement of 22 September 2021 (and included supply
chain issues, residual Covid impacts, global shortages and engineering
complexity).

 

The build of the MTE devices is now largely complete, with customer acceptance
testing having commenced in November 2021.

 

The testing process was temporarily paused before year-end, however, testing
has now re-commenced, with two of the four training devices scheduled for
delivery to site in February 2022.

 

The programme will, accordingly, be marginally extended; management
anticipates that all devices will be delivered during the first half of 2022.
Delivery of the devices will enable Pennant to invoice remaining cash
milestones totalling circa £2 million.

 

In light of this extension, and to ensure the necessary resources to deliver
and finally 'close off' this contract, the Board has prudently increased
internal programme budgets (including a cost allowance to deal with any
remaining risks) which is fully taken into account within the year-end
position.

 

Contract award timing

 

Pipeline conversion in the second half of FY21 proceeded in line with the
Group's expectations with one exception: a software and services contract with
a new customer in the commercial aviation sector was slightly delayed. The
contract had been expected to be awarded to Pennant before year-end but will
now fall into the current year.

 

The contract is worth USD$1.1 million in the first year (and USD$1.8 million
overall); the sale of software licences under the contract had been budgeted
to contribute to the Group's performance for FY21. The terms of the contract
have now been agreed and it is in the process of being finalised and signed.

 

Commenting on the Outlook for 2022, Pennant Group CEO, Phil Walker said:

 

"2021 was a challenging year for Pennant given the continued impact of the
Covid-19 pandemic on our business sector and the wider global economy.

 

"It is therefore pleasing that momentum has started to build again in our core
product offerings and pipeline of new business. The Group continues to focus
on its strategic objective of increasing the proportion of revenues which
derive from software and services which is intended to deliver significant
growth over the medium-term.

 

"Bid activity is increasing across the Group, and the Board remains very
confident of the award of the 'Major Programme' within the first quarter of
the year.

 

"The Group remains well placed to capture the many opportunities which lie
ahead and accordingly, the Board views prospects for 2022 with increasing
confidence and looks forward to reporting a significantly improved performance
for the current year."

 

 

Certain information contained in this announcement would have constituted
inside information (as defined by Article 7 of Regulation (EU) No 596/2014)
("MAR") prior to its release as part of this announcement and is disclosed in
accordance with the Company's obligations under Article 17 of MAR.

 

 

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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