REG - Pennant Int. Group - Final Results & Notice of Investor Presentation
Yesterday 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260323:nRSW6216Xa&default-theme=true
RNS Number : 6216X Pennant International Group PLC 23 March 2026
23 March 2026
PENNANT INTERNATIONAL GROUP PLC
("Pennant", the "Company" and together with its subsidiaries the "Group")
Final Results
Notice of Investor Presentation
Well Positioned for Global Market Opportunity with Strengthened Order Book
Pennant International Group plc (AIM: PEN), the systems support software and
training solutions company, announces its final results for the year ended 31
December 2025 ("FY25" or the "Period").
Commenting on the Period, Chairman, Ian Dighé, said:
"2025 was a challenging year in which the Group successfully completed a major
restructure of the Group's Training Systems business but as was previously
announced, the Company experienced unexpected delays in the award of certain
Defence contracts along with the wider market.
"Notwithstanding these headwinds and the impact on the Group's performance,
the Board considers 2025 to have been a reset year and believes that the
business embarks on 2026 with strong fundamentals and order momentum.
"I would like to thank our employees for their determination in achieving
significant progress in the Period and look forward to reporting more
favorably in the forthcoming year."
Financial Highlights:
· Revenues of £9.7 million (2024: £13.8 million)
· Order intake of £18 million substantially strengthened the
Group's contracted three-year order book of £23.3 million (2024: £15.9
million), of which £9.7 million is scheduled for delivery in 2026
o Contract wins within the Training Systems segment during the Period
totaling up to £9.5 million across the next three years
· Software Annual Recurring Revenue((1)) ("ARR") of £2.4 million
(2024: £1.9 million) from Auxilium software products, a record for the Group
and representing 26% year on year growth
· 60% of Group revenues are now recurring in nature
· Gross margin levels remain strong at 49% (2024: 50%)
· Adjusted EBITDA loss of £0.4 million (2024: £1.7 million
profit)
· Adjusted loss before tax of £1.9 million (2024: £0.3 million
loss)
· Statutory loss before tax of £2.5 million (2024: £3.0 million
loss)
· Positive operating cash flow during the year via continued
working capital discipline
· Tax receipts of £0.7 million supported by R&D (UK) claim
proceeds
· Net debt of £0.5 million (2024: £2.3 million) inclusive of
shareholder loan but excluding lease liabilities
· Capitalised investment into Auxilium software of £1.5 million
(2024: £1.3 million), continuing to build on the strong investment case
Strategic & Operational Highlights:
· Completion of streamlining of Training Systems business
· Solid progress executing product development and growth
strategy
o Progress with the Auxilium Development Programme - completed integration
of GenS and Analyzer applications, released Q2
o Signed global OEM partnership agreement with Siemens Digital Industries
Software, and appointed sales representatives in South Korea, Japan and India,
all key long-term priority markets
o Auxilium sales with new customers in Czech Republic, Denmark, Germany and
Finland, and adjacent markets including Shipping, Robotics and Space
Post Period end:
· Training Systems contract signed in the nuclear sector
Commenting on the outlook, Chief Executive Officer, Phil Walker, said:
"As we look ahead to 2026, the Group enters the year with increasing momentum
and a clearer pathway to sustainable performance and profitability. Software
ARR is expected to exceed £3.0 million by the end of FY26, further
strengthening margins and reinforcing the benefits of our strategic shift
toward higher value, scalable software solutions.
"With over 25 years of experience developing software for blue‑chip defence
customers, Pennant benefits from attractive barriers to entry in its markets,
a strong delivery record, and a flexible subscription model that supports
recurring, higher margin revenue growth.
"Supported by the structural savings delivered through the FY24-FY25
restructuring programme, we anticipate a return to a break‑even adjusted PBT
in FY26 and have confidence in delivering on market expectations for the
year."
(1) (Annual Recurring Revenue (ARR) is the annualised revenue generated from
software subscriptions and maintenance contracts.)
Three-Year Strategy
Pennant provides systems support software, technical services & training
solutions to highly regulated industries and major OEMs. Our solutions are
designed to optimize and extend the lifecycle and mission readiness of
critical assets via:
· Maximizing asset availability and end user capability
· Enablement of data driven decisions
· Ensuring data integrity and compliance
The Group's principal strategic objectives over the next three years are to:
· Grow software ARR, via organic strategies, to exceed £4
million by the end of 2028
· Return Technical Service revenues to >£7.0 million by
2028
· Maintain the deliverable Training Systems order book at
>£5.0 million
· Achieve adjusted EBITDA margin of 20% and adjusted PBT
margin of 10% by 2028
With a growing proportion of the Group's trading coming from the higher margin
Software and Technical Services segment, together with the cost savings from
the restructuring program carried out in FY24 and FY25, management is
confident of achieving profitable growth over the next three years in line
with the strategic plan.
Investor Presentation: 11.00am on Tuesday 24 March 2026
Management will hold an investor presentation to cover the results at 11.00am
on Tuesday 24 March 2026.
The presentation will be hosted through the digital platform Investor Meet
Company. Investors can sign up to Investor Meet Company and add to meet
Pennant via the following
link https://www.investormeetcompany.com/pennant-international-group-plc/register-investor
(https://www.investormeetcompany.com/pennant-international-group-plc/register-investor)
.
For those investors who have already registered and added to meet the Company,
they will automatically be invited.
Questions can be submitted pre-event to Pennant@walbrookpr.com
(mailto:Pennant@walbrookpr.com) or in real time during the presentation via
the "Ask a Question" function.
Enquiries:
Pennant International Group plc www.pennantplc.com (http://www.pennantplc.com)
Phil Walker, CEO +44 (0) 1452 714 914
Darren Wiggins, CFO
Cavendish (Nominated Adviser and Sole Broker) www.cavendish.com (http://www.cavendish.com)
Ben Jeynes / Callum Davidson / George Lawson +44 (0) 207 220 0500
(Corporate Finance)
Michael Johnson / Dale Bellis / Sunila de Silva
(Sales and Corporate Broking)
Walbrook PR (Financial PR) pennant@walbrookpr.com (mailto:Pennant@walbrookpr.com)
Tom Cooper +44 (0)20 7933 8780
Marcus Ulker +44 (0)797 122 1972
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 offerings:
• Auxilium 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 equip
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
the UK, North America and Asia-Pacific, serving markets with high barriers to
entry often in regulated industries.
CHAIR'S STATEMENT
Results in line with expectations; strengthened order book
The Group delivered results in line with expectations for the year ending 31
December 2025. While the timing of certain contract awards affected the
in-year revenue profile, the Group concluded the Period with a substantially
strengthened contracted three‑year order book of £23.3 million (2024:
£15.9 million), of which £9.7 million is scheduled for delivery in 2026.
During the year, Pennant advanced its strategic plan to deliver a
software‑driven and increasingly scalable business, underpinned by an
enhanced financial and operating structure. This plan has positioned the Group
with market‑leading technology, improved organisational efficiency, and a
more focused go‑to‑market strategy aligned to long‑term growth.
Key Financials
For the year ending 31 December 2025, the Group recorded consolidated revenues
of £9.7 million (2024: £13.8 million).
The Group has maintained its gross margin for 2025 at 49% (2024: 50%)
supporting the continuing strategic shift towards software and higher value
services. The Group posted a consolidated adjusted loss before tax of £1.9
million (2024: £0.3 million), which is in line with market expectations.
The Group's net debt (including shareholder loans) at the year-end was £0.5
million (2024: net debt of £2.3 million) which reflects, amongst other
things, the continued investment in the integrated software suite, the
successful completion of the property disposal programme and the external
funding provided by the equity subscription and shareholder loan.
Dividend
The Directors believe that it continues to be both prudent, and in the
Company's and shareholders' best interests, to retain cash for working capital
and concentrate resources on execution of the current growth opportunities.
The Board will therefore not be recommending the payment of a final dividend
for the year ended 31 December 2025.
Our People
Delivering sustained high performance depends on a committed and motivated
workforce who are appropriately supported and incentivised.
2025 has been a reset year for the organisation following the significant
restructuring of the Training Systems business, and I would like to express my
sincere thanks to all employees for their dedication and support throughout
this period of transition.
Their contribution has underpinned the progress outlined in this report and
positions Pennant strongly to meet the evolving requirements of its global
customer base. Ensuring our people remain motivated and properly incentivised
will continue to be a core priority for the Board.
Our Culture
The Board is committed to ensuring that every employee across the Group
understands and embodies Pennant's Core Values. These values sit at the heart
of the organisation and define how we work and shape the policies and
behaviours that guide the organisation.
They underpin our compliance with legal obligations - including anti-bribery
or anti-counterfeiting requirements - as well as our ethical commitment to
fairness, respect and equality of opportunity.
Living these values requires consistent, visible leadership, and the Board
remains focused on fostering a culture where our people feel respected,
supported and able to contribute to their full potential.
Governance
The Board remains committed to maintaining its strong record of robust,
proportionate corporate governance. Working closely with its advisors, the
Board conducts regular reviews of its governance frameworks to ensure they
remain effective, proportionate, and aligned with the needs of a growing
international business.
The Board has implemented appropriate risk‑management procedures and
undertakes regular and rigorous reviews of the Group's principal risks and
uncertainties.
Board Changes
There have been changes to the composition of the Board.
At the 2025 AGM, Deborah Wilkinson chose not to stand for re‑election and
retired from the Board.
Post‑period end, David Clements resigned as a director and as Company
Secretary. David is remaining with the business for a short handover period
before leaving on 31 March 2026. On behalf of the Board, I would like to thank
David for his valuable contribution and support during his time with the
Group, and we wish him every success for the future.
Current Trading and Outlook
Against a backdrop of rising defence budgets, increasing governance and
compliance requirements, and escalating technological complexity, demand for
advanced IPS and supportability software continues to increase.
Pennant's integrated software capability positions the Group strongly to meet
these requirements - offering defence forces, governments, and OEMs the
ability to manage complexity, improving operational availability and reducing
through‑life costs.
The launch of the fully integrated Auxilium product suite in April 2026,
combines Pennant's long‑standing customer relationships with governments and
major OEMs, specialist technical services, and reputation for quality and
reliability, providing a strong platform for future sustainable growth.
Ian Dighé
Chair
CHIEF EXECUTIVE'S REVIEW
Confidence in the Strategic Plan
2025 was a reset year for Pennant. Following the major restructuring of the
Training Systems business in late 2024, we entered the year focused on
execution and advancing our transition towards higher-margin software and
services. Delays to certain contract awards created challenges and affected
the timing of revenues and general trading performance.
We exit FY25 with a strengthened contracted order book, a clear operating
model and growing momentum in our Auxilium software.
2025 Strategic Priorities
In 2025 we concentrated on four priorities, each aimed at strengthening our
foundations and accelerating Pennant's transition toward a software‑led,
services‑scaled business.
· Advance the Auxilium Development Programme
· Launch the go-to-market and indirect channels strategy
· Simplify the operating model - completed the Training Systems
restructure
· Improve the customer experience
We made solid progress on each. The restructuring benefits are now embedded;
governance and operating rhythms are clearer; and the software roadmap and
services propositions are increasingly aligned to customer requirements and
our revenue model.
Auxilium Development Programme
Pennant made strong progress in the development of its Auxilium product suite
during the Period. The integration of GenS and Analyzer - released to market
in H1 2025 - was successfully completed, enabling the next phase of our
programme: combining GenS, Analyzer and R4i into a single, fully integrated
IPS solution under the Auxilium brand and due for launch in April 2026.
Auxilium is designed to provide customers with a powerful, unified toolset to
manage, model and exploit complex systems data at scale. It supports
compliance with international standards and specifications while enabling
intelligent, data‑driven decision‑making across the asset lifecycle.
In line with our strategy, Pennant invested £1.5 million in Auxilium software
development during the Period, strengthening our customer proposition and
broadening our capability. This investment underpins our ambition to grow
software revenues, expand higher‑value technical services and secure
additional recurring contracts.
Looking ahead, development expenditure is expected to remain in the range of
£1.2 million to £1.4 million per annum, reflecting our commitment to
ensuring Auxilium remains a market‑leading IPS solution that delivers
lasting value to both new and existing customers via addressing new data
standards and enhancing predictive analytics.
Go-to Market and indirect channels
FY25 saw encouraging expansion of Auxilium into several new territories -
including the Czech Republic, Denmark, Germany and Finland - and into adjacent
sectors such as shipping, robotics and space. As a result, the number of users
increased by 8%, and Annual Recurring Revenue ("ARR") rose to £2.4 million
(2024: £1.9 million), the highest level in the Group's history. Importantly,
this growth has been achieved organically, with further opportunities emerging
from the refreshed go‑to‑market strategy.
As part of its organic growth plan, the Group has made significant progress
with its go‑to‑market strategy, focusing on strategic partnerships to
extend its reach into new territories, industries and customer segments.
Notably, in FY25 the Company signed a global OEM partnership agreement with
Siemens Digital Industries Software, and appointed sales representatives in
South Korea, Japan and India, all key long-term priority markets.
With defence organisations worldwide placing increasing emphasis on robust IPS
processes, Pennant is well positioned to meet rising demand. We continue to
build on decades of trusted delivery to the Canadian and Australian defence
forces.
The Board believes Auxilium is uniquely placed within the market as the only
fully integrated product‑support toolset combining the breadth of capability
required by operators with the security standards demanded by our end markets.
Supported by over 25 years of experience developing software for blue‑chip
defence customers, Pennant benefits from attractive barriers to entry, a
strong delivery record, and a flexible subscription model that supports
recurring, higher‑margin revenue growth.
Simplifying the Operating Model
During the year, we continued to streamline the operating model with the
completion of the Training Systems restructure, including the completion of
the property rationalisation programme. We also advanced the implementation of
the Group's regional operating structure with the appointment of an MD EMEA,
complementing the established leadership roles in APAC and the Americas.
The regional structure, with redesigned roles aligned to the Group's strategy,
ensures that a single leader in each region holds clear responsibility,
authority and accountability for key business functions. This model enhances
the customer experience by deploying operational teams directly within each
region, while also creating a more efficient, agile organisation aligned with
our strategic objectives.
Improving Customer Experience
Customer experience has been identified as the Group's sustainable competitive
advantage, and we have therefore maintained a sharp focus on strengthening
customer engagement, delivery quality and support responsiveness.
As a strategic priority, a series of initiatives were launched to enhance our
software customer support capabilities, including:
· Upgrades to the software licensing system to simplify activation
and improve reliability.
· Investment in the customer support portal and associated tools to
provide faster access to help, knowledge, and issue tracking.
· Development of improved training materials and investment in a
Learning Management System, ensuring customers can quickly build proficiency
in Auxilium and related products.
To drive this agenda, we have created and appointed a new role: Head of
Customer Support & Service, responsible for leading the end‑to‑end
customer experience across the Group.
Improved programme controls, clearer communication pathways and enhancements
to onboarding and customer success-particularly for Auxilium-have already
contributed to stronger customer outcomes. These improvements are reinforcing
relationships across our UK, Canadian and Australian customer base and provide
a solid foundation for future growth.
Looking forward
As we look ahead to 2026, the Group enters the year with increasing momentum
and a clearer pathway to sustainable performance. Software ARR is expected to
exceed £3.0 million by the end of FY26, further strengthening margins and
reinforcing the benefits of our strategic shift toward higher‑value,
scalable software solutions. Supported by the structural savings delivered
through the FY24-FY25 restructuring programme, we anticipate a return to a
break‑even adjusted PBT position in FY26.
Disciplined programme management and continued focus on milestone delivery are
expected to deliver a positive operating cash‑flow position, enabling the
Group to fund ongoing investment in Auxilium from internal resources. This
self‑sustaining funding model reflects the growing resilience of the
business.
Our sustained investment in Auxilium and the enhancement of our technical
services capability remain central to our strategy. With a favourable market
backdrop and rising global demand for advanced IPS solutions, the Group is
well positioned to capitalise on its strengthened product offering, expanding
software footprint and improved operational model.
These priorities provide a strong foundation for further progress in the year
ahead, as we continue to transition Pennant into a more predictable,
software‑led business delivering long‑term value for all stakeholders.
P H Walker
Director
CHIEF FINANCIAL OFFICER'S REVIEW
The Pennant Group consists of two segments:
· Software & Services which comprises of our Systems Support
Software (Auxilium) and Technical Services operations; and
· Training Systems comprising of our highly engineered Training
hardware operations.
During 2025 the restructuring exercise within the Training Systems segment,
which was largely undertaken in the 2024 financial year, was completed via the
successful sale of UK based facilities deemed surplus to operating
requirements. Net sales proceeds of £3.0 million (excluding VAT) have been
used to reduce the Group's borrowings with the transactions realising a small
gain against book value as at 31 December 2024.
The statutory financial performance of the Group has been materially impacted
by the restructuring including the classification of certain UK properties as
'held for sale' current assets in the opening balance sheet in accordance with
IFRS 5. Where appropriate, reconciliations of statutory to 'adjusted' income
statement performance have been provided to aid understanding of our recurring
trade and operations.
Financial review
The results and a review of the key financial performance indicators of
revenue and profitability are set out below.
Performance
Group revenue of £9.7m represents a 30% year over year reduction (2024:
£13.8m) which reflects the hiatus in large, engineered project revenue
generating work within the Training Systems segment during the year - in prior
year we recognised £3.5m of revenue from the successful delivery to program
milestones under a 3-year contract with Boeing Defence UK for updates to AH
Mk1 Apache training equipment ("Apache"). The year over year revenue
performance can be better understood via the segmental revenue analysis on the
next page.
The gross profit margin for the year remained strong at 49% (2024: 50%)
despite the lower revenue. This augurs well for future profitable growth as we
continue the strategic shift of the Group towards software-related products
and higher value services.
Administrative costs benefitted from realised savings from the 2024
restructuring exercise, at £6.6 million (2024: £7.0 million) after adjusting
items of £0.4 million comprising exceptional costs (£0.4 million), share
based payment expense (£0.03 million) and gains on disposal of assets (£0.1
million).
Despite disciplined pricing and cost control, the sales volume reductions
resulted in an adjusted loss before interest, depreciation and amortisation of
£0.4 million (2024: positive EBITDA £1.7 million) and an adjusted loss
before tax of £1.9 million (2024: £0.3 million).
The statutory loss before tax for the year of £2.6 million (2024: loss £3.0
million) includes £0.4 million of exceptional costs (2024: £2.3 million) and
£1.0 million of intangible asset amortisation (2024: £1.6 million). The
'adjusted' income statement performance excludes exceptional items (including
share-based payment charges and gains on disposal of land & buildings), as
well as acquired intangible amortisation, and has been presented to aid
understanding of our recurring trade and operations.
Adjusted numbers
£m 2025 Statutory Acquired Intangible Amortisation Adjusted Items ((1)) 2025 Adjusted 2024
Revenue 9.7 - - 9.7 13.8
Gross profit 4.8 - - 4.8 6.9
Gross profit % 49% 49% 50%
Other income 0.2 - - 0.2 0.2
Admin costs (7.2) 0.2 0.4 (6.6) (7.0)
Interest costs (0.3) - - (0.3) (0.4)
Loss before tax (2.5) 0.2 0.4 (1.9) (0.3)
Amortisation 1.0 (0.2) - 0.8 1.1
Depreciation 0.4 - - 0.4 0.5
Interest costs 0.3 - - 0.3 0.4
EBITDA (0.8) - 0.4 (0.4) 1.7
(1) Adjusted Items comprise exceptional costs £0.4 million, £0.03m of
shared based payment expense, and a £0.1 million gain on disposal of land
& buildings (all recognised within administrative expenses).
Adjusting items to statutory operating loss in the year are consistent with
prior years and include:
· Costs associated with the restructuring of the Training Systems
division in the year totaling £0.3 million (2024: £2.1 million). These are
shown as adjusting items due to their size and non-trading nature.
· Other 'one off' expenses totaling £0.1 million (2024: £0.1
million)
· Gains on sale of land & buildings (related to the
restructuring exercise) totaling £0.1 million
· An expense of £0.03 million in accordance with IFRS 2 and
associated with outstanding employee share option awards
Revenue analysis
An analysis of the Group's revenue by operating segment and CGU is as follows:
2025 2024
£000s £000s
Software licences and products* 2,544 2,290
Technical services 5,101 7,276
Sub-total Software and Services 7,645 9,566
Engineered solutions 1,342 3,554
Generic products 675 655
Sub-total Training Solutions 2,017 4,209
Total Group Revenue 9,662 13,775
*Includes revenue from software maintenance contracts
Software and Services
Software licences & products
Revenue from software products more than doubled in 2025 to £1.1 million
(2024: £0.4 million) - driven by an increase of 8% in licensed users of the
Auxilium suite of products arising from sales to 15 new customers across the
defence, maritime and space sectors. Sales were under a mix of perpetual and
subscription contracts (mostly subscription). Revenues, where perpetual
licenses are sold, are recognised upon installation of the software and tend
to be non-recurring in nature. Where products are sold on a subscription basis
revenue recognition is split between installation and maintenance services,
with the element relating to maintenance services spread over the duration of
the subscription period depending on the term of the subscription contract
which currently range from 1 to 3 years - subscription revenues are seen as
recurring in nature. The software is used to support the lifecycle of complex
assets which can span decades.
Software maintenance revenues reduced to £1.5 million (2024: £1.9 million)
reflecting the customer preference for subscription contracts in 2025
(subscription contracts include the license and the maintenance performance
obligations). Software maintenance revenues are recurring by nature; the
revenue is recognised over the duration of the maintenance period for each
customer which can range from annual renewals to multi-year agreements.
In the Software as a Service sector, ARR is generally seen as a better forward
looking performance indicator. ARR measures the annualised monthly contracted
income from software contracts at a point in time. The Group exited 2025 with
an ARR of £2.4 million with a pipeline of opportunities expected to realise a
growth to £3.0 million by the end of 2026.
Technical services
Our technical services segment is diversified across circa 50 contracts and
although we see the revenue arising from the segment as largely repeatable
there will, from time to time, be occasions where certain service contracts
come to an end. During 2025 the segment was challenged with the cessation of
two contracts - in the UK, our longstanding HMRC PAYE services contract was
lost to competition, and in Australia, we completed the statement of work on
technical publications conversion services for the Australian Land Services
Division of the DOD.
We are working hard to win new work from a healthy global pipeline that will
recover our technical services revenues back to 2024 levels within our
three-year growth plan and expect to make further announcements during the
first half of 2026.
Revenues from technical services contracts are typically recognised on a
consumption of benefit basis over time.
Training Systems
Engineered solutions
In line with management expectations, revenues associated with engineered
solutions have decreased from £3.6 million in 2024 to £1.3 million in 2025.
This is reflective of the operational stage of completion on the programmes
which form the basis of this revenue stream which is recognised over time
under IFRS 15. During the year, the team were working on several smaller
programs with less work performed under contractual milestones when compared
with the Apache contract in 2024, for which the delivery across a 3-year
period was completed.
Generic products
The revenue recognition for generic products is at a point in time (typically
on delivery) under IFRS 15. Revenues for these 'off the shelf' products in
2025 were £0.7 million (2024: £0.7 million).
At the time of writing, the order book within the training systems segment has
grown to £10.3 million (2024: nil) giving confidence to near term Group
revenue growth targets.
Cashflow / Net debt
The movement in net debt (as defined in the glossary to the annual report) is
summarised as follows:
£000s
Net Debt at 31 December 2024 (2,285)
Net cash generated from operations 101
Net cash generated from investing activities 1,122
Net cash generated from financing activities 942
Effect of foreign exchange rates (93)
Net cash/(overdraft) at 31 December 2025 (213)
Shareholder loan (323)
Net Debt at 31 December 2025 (536)
In July we completed the final phase of the sale of surplus land &
buildings at Staverton, Cheltenham, UK that realised total gross cash proceeds
in 2025 of £3.2 million in line with the programme's objective. The Company
has remained in occupation of two units under a full repairing lease, entered
for a five-year term, with a three-year 'tenant' only break clause.
The UK properties disposed of during 2025 acted as security in relation to the
Group's HSBC overdraft facility (2024: £3.5 million). Following the sale of
the properties, and the 2025 renewal process, the Group is, at 31 December
2025, operating with a £1 million facility with HSBC.
During the second half of the year and to support the continued capital
investment in the integrated software suite the Group utilised its 10%
placing authority to raise circa £0.9 million after fees. In October 2025,
additional funds were raised via a £0.3m shareholder loan with Brett Gordon.
The interest rate under the Loan Agreement is fixed at 9.75% (payable at
90-day intervals), with the principal being repayable in full through one
bullet repayment 180 days after drawing (April 2026).
Included within investing activities was the final payment £0.3 million
(2024: £0.3 million) relating to the 2020 acquisition of ADG, a critical
component of our integrated software offering. Consideration was structured to
include five 'earn out' payments attached to qualifying trading performance.
The Group had net borrowings at the year-end of £0.5 million (2024: net
borrowings of £2.3 million) excluding lease liabilities but including the
remaining liability on the shareholder loan.
Post Period-end, the Group has taken actions to ensure that ongoing operations
are appropriately funded via the renewal of the existing HSBC overdraft
facility up to an available limit of £1.0 million for a further 12-month
period.
Furthermore, the Group has an active pipeline of opportunities spanning the
entire spectrum of products and services. Securing these pipeline orders will
underpin the cashflows of the Group in 2026 and beyond.
Research & development
Research and development repayable tax credits expected to be claimed (for
cash) in the UK for the Period amount to £0.1 million (2024: £0.2 million)
on qualifying expenditure of £0.7 million (2024: £1.4 million). The claims
relate to the development of innovative new hardware products within the
Training Systems segment as well as software products for which IP is held in
the UK within the Software & Services segment.
During the year, retrospective 'optimisation' claims were made in respect of
the 2024 and 2023 financial year R&D qualifying activities leading to a
cash credit of £0.3 million and £0.2 million of other income on the face of
the consolidated income statement.
Taxation
The Group's tax position shows a tax credit of £0.3 million (2024: credit of
£0.5 million) consisting of a current tax credit of £0.25 million (2024:
£0.3 million) and a deferred tax credit of £0.05 million (2024: credit of
£0.2 million). The current tax credit arises largely from R&D claims
submitted with HMRC under UK government incentive plans. The deferred tax
credit is largely due to the release of deferred tax liabilities following the
sale of UK land & buildings. We continue to build up a 'tax shield' from
trading losses but also continue to take a prudent view on deferred tax asset
recognition, particularly as it relates to losses brought forward. The Group
has total unrelieved UK tax losses carried forward of £7.8 million (2024:
£7.0 million) and continues to benefit from R&D related tax credits in
overseas tax jurisdictions limiting the likelihood of cash tax charges in the
near future.
Going concern
As part of their consideration of going concern, the Directors have reviewed
the Group's future cash forecasts and projections, which are based on both
market and internal data as well as recent experience.
The Directors have concluded that there are scenarios whereby the levels of
forecast new business converted, or the timings of conversion are delayed
which represents a material uncertainty that may cast significant doubt upon
the company's ability to continue as a going concern.
Considering the Group's current committed bank facility headroom, its access
to liquidity, and the strength of its pipeline, the Directors consider it
appropriate that the Group can manage its business risks successfully and
adopt a going concern basis in preparing these Consolidated Financial
Statements.
Outlook
Pennant enters 2026 with a stronger order book - £23.3 million of contract
value for delivery across the next 3 years, including circa £10 million that
is scheduled for delivery in FY26 - giving us confidence in our objective to
return the Group to a sustainable net cash and net profit before tax
performance, delivering on the trust placed by our investors.
Darren Wiggins
Director
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2025
Notes 2025 2024
Continuing operations £'000s £'000s
Revenue 2 9,662 13,775
Cost of sales (4,898) (6,875)
Gross profit 4,764 6,900
Exceptional costs 3 (414) (2,322)
Share based payments (30) (70)
Profit on sale of land and buildings 86 231
Other administration expenses (6,845) (7,526)
Administrative expenses (7,203) (9,687)
Other income 199 185
Operating loss (2,240) (2,602)
Finance costs (325) (444)
Finance income 1 5
Loss before taxation (2,564) (3,041)
Taxation 310 466
Loss for the year attributable to the equity holders of the parent (2,254) (2,575)
Loss per share
Basic (5.04p) (6.37p)
Diluted (5.04p) (6.37p)
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
Notes 2025 2024
£'000s £'000s
Loss for the year attributable to the equity (2,254) (2,575)
holders of the parent
Items that may be reclassified to profit or loss
Exchange rate differences on translation of foreign operations (87) (300)
Items that will not be reclassified to profit or loss
- (80)
Impairment on property, plant and equipment
- 20
Deferred tax credit - property, plant and equipment
Total comprehensive loss for the period attributable to the equity (2,341) (2,935)
holders of the parent
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2025
Notes 2025 2024
£'000s £'000s
Non-current assets
Goodwill 4 2,481 2,530
Other intangible assets 5 4,861 4,218
Property, plant and equipment 346 470
Right-of-use assets 845 543
Deferred tax assets 644 591
Total non-current assets 9,177 8,352
Current assets
Inventories 686 617
Trade and other receivables 1,454 2,355
Current tax receivable 377 593
Assets held for sale - 2,974
Cash and cash equivalents 466 1,045
Total current assets 2,983 7,584
Total assets 12,160 15,936
Current liabilities
Trade and other payables 3,335 3,251
Bank overdraft 6 679 3,330
Loans 6 323 -
Current tax payable 6 3
Lease liabilities 228 137
Deferred consideration on acquisition - 311
Total current liabilities 4,571 7,032
Net current (liabilities)/assets (1,588) 552
Non-current liabilities
Lease liabilities 675 468
Warranty provisions 5 92
Total non-current liabilities 680 560
Total liabilities 5,251 7,592
Net assets 6,909 8,344
Equity
Share capital 2,378 2,162
Share premium account 7,117 6,457
Capital redemption reserve 200 200
Retained earnings (2,614) (495)
Translation reserve (172) (85)
Revaluation reserve - 105
Total equity 6,909 8,344
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
SHARE CAPITAL SHARE PREMIUM CAPITAL REDEMP-TION RESERVE RETAINED EARNINGS TRANSLA-TION RESERVE REVALUA-TION RESERVE TOTAL EQUITY
£'000s £'000s £'000s £'000s £'000s £'000s £'000s
At 1 January 2024 1,844 5,383 200 1,990 215 185 9,817
Loss for the year - - - (2,575) - - (2,575)
Other comprehensive losses - - - - (300) (60) (360)
Total comprehensive loss - - - (2,575) (300) (60) (2,935)
Issue of new ordinary shares 318 1,252 - - - - 1,570
Issue costs - (178) - - - - (178)
Recognition of share-based payment - - - 70 - - 70
Transfer from revaluation reserve - - - 20 - (20) -
At 31 December 2024 2,162 6,457 200 (495) (85) 105 8,344
Loss for the year - - - (2,254) - - (2,254)
Other comprehensive losses - - - - (87) - (87)
Total comprehensive loss - - - (2,254) (87) - (2,341)
Issue of new ordinary shares 216 714 - - - - 930
Issue costs - (54) - - - - (54)
Recognition of share-based payment - - - 30 - - 30
Transfer from revaluation reserve - - - 105 - (105) -
At 31 December 2025 2,378 7,117 200 (2,614) (172) - 6,909
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025
NOTES 2025 2024
£'000s £'000s
Net cash from operations 101 176
Investing activities
Interest received 1 5
Deferred consideration paid in respect of prior year acquisition (318) (511)
Investment in intangible assets (1,681) (1,371)
Purchase of property, plant and equipment (43) (223)
Proceeds from disposal of property, plant and equipment 3,163 484
Net cash from/(used in) investing activities 1,122 (1,616)
Financing activities
Proceeds from issue of ordinary shares less issue costs 876 1,392
Proceeds from shareholder loan 320 -
Repayment of lease liabilities (254) (251)
Net cash from financing activities 942 1,141
Net increase/(decrease) in cash and cash equivalents 2,165 (299)
Cash and cash equivalents at beginning of year (2,285) (1,879)
Effect of foreign exchange rates (93) (107)
Cash and cash equivalents at end of year (213) (2,285)
ABBREVIATED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED
31 DECEMBER 2025
1. Basis of Preparation
Pennant International Group plc is a public company incorporated in England
and Wales under the Companies Act 2006. The company is listed on AIM, part of
the London Stock Exchange. The address of the registered office is Unit D1,
Staverton Connection, Staverton, Cheltenham, GL51 0TF.
The principal activity of the Group during the year was the delivery of
integrated training and support solutions, products and services, principally
to the defence, rail, aerospace and naval sectors and to Government
Departments.
The financial information set out in this preliminary results announcement
does not constitute the Group's statutory financial statements, as defined in
section 435 of the Companies Act 2006, but is derived from those financial
statements. Statutory financial statements for 2024 have been delivered to
the Registrar of Companies. The audit report was unqualified, did not contain
a statement under section 498 (2) or 498 (3) of the Companies Act 2006 and
drew attention by way of emphasis to a material uncertainty relating to going
concern. Those for 2025 have not yet been delivered to the Registrar of
Companies. The audit report is unqualified, does not contain a statement under
section 498 (2) or 498 (3) of the Companies Act 2006 and draws attention by
way of emphasis to a material uncertainty relating to going concern. The 2025
accounts will be delivered to the Registrar of Companies shortly.
Accounting policies have been applied consistently with those set out in the
2024 financial statements, as amended when relevant to reflect the adoption of
new standards, amendments and interpretations which became effective in the
year. During 2025 no new standards, amendments or interpretations had a
significant impact on the financial statements.
While the financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement criteria of
UK-adopted international Accounting Standards, this announcement does not
itself contain sufficient financial information to comply with UK-adopted
international Accounting Standards. The Group will be publishing full
financial statements that comply with UK-adopted international Accounting
Standards in March 2026.
Going Concern
Accounting standards require that the Directors satisfy themselves that it is
reasonable for them to conclude whether it is appropriate to prepare the
financial statements on a going concern basis.
The Directors have undertaken an assessment of the prospects of the Company
and its subsidiary undertakings (the 'Group'), taking into account the Group's
current position and principal risks. This review considered both the Group's
prospects and its ability to continue in operation and to meet its liabilities
as they fall due over the eighteen-month period ('review period') following
approval of these financial statements.
The Directors have prepared cash flow projections to 31 December 2027 to
support their decision to use the going concern basis and these projections
rely on future cash flows from new business which is not yet secured and for
which timings are uncertain. The Directors have concluded that there are
scenarios whereby the levels of forecast new business converted, or the
timings of conversion are delayed which represents a material uncertainty that
may cast significant doubt upon the company's ability to continue as a going
concern - scenarios under which the Company may be unable to realise its
assets and discharge its liabilities in the normal course of business.
Nevertheless, after making enquiries and considering the uncertainties
described above, the Directors have a reasonable expectation that the Company
has adequate resources to continue in operational existence for the
foreseeable future. Should the Group not achieve budgeted revenue
projections, management would look to address its cash costs and/or raise
capital from several different funding options.
For these reasons, we continue to adopt the going concern basis of accounting
in preparing the annual financial statements.
Were the company no longer a going concern, adjustments may be required to the
carrying value of assets, provisions would be required for the future
liabilities arising because of the company ceasing business and assets and
liabilities currently classified as non-current would be reclassified as
current.
2. Segment information
The operating segments that are regularly reviewed by Executive Management in
order to allocate resources to segments and to assess performance are aligned
to the Training and Software & Services CGUs and the three regions, UK
& Europe, North America and Asia-Pacific as these represent the way the
Group reports financial performance and position internally.
2.1 Segment revenues and results
Segment Turnover Segment Profit
2025 2024 2025 2024
£000s £000s £000s £000s
Training
UK & Europe 1,528 4,209 (474) (879)
North America 246 - 94 -
Asia Pacific 243 - 102 -
Subtotal Training 2,017 4,209 (278) (879)
Software & Services
UK & Europe 2,205 3,142 985 1,042
North America 3,190 2,743 776 (483)
Asia Pacific 2,250 3,681 (656) 727
Subtotal Software & Services 7,645 9,566 1,105 1,286
Total Revenue 9,662 13,775 827 407
Management charges and licence fees (3,066) (3,009)
Net finance costs (325) (439)
Loss before tax (2,564) (3,041)
2.2 Segment assets and liabilities
2025 2024
£000s £000s
Training
UK & Europe 3,601 7,036
Consolidated assets 3,601 7,036
UK & Europe 2,419 4,143
Consolidated liabilities 2,419 4,143
2025 2024
£000s £000s
Software & Services
UK & Europe 5,252 4,635
North America 2,320 3,021
Asia Pacific 987 1,244
Consolidated assets 8,559 8,900
UK & Europe 1,156 1,099
North America 525 933
Asia Pacific 1,151 1,417
Consolidated liabilities 2,832 3,449
3 Exceptional items
The following expenses have been recognised as exceptional items on the face
of the Group income statement due to them being considered non-recurring
transactions or one-off in nature
2025 2024
£'000s £'000s
Inventory impairment - 407
Restructuring costs 295 1,697
Aborted acquisition costs - 218
Legal, professional & advisory costs 119 -
414 2,322
Legal, professional & advisory costs largely relate to fees paid in
respect of the R&D optimisation claims filed for prior years (2023 and
2024) and as such are seen as one off in nature.
4 Goodwill
The Group tests goodwill annually for impairment. The recoverable amounts of
the CGU's are determined from value in use calculations. The Group prepares
cash flow forecasts for the following twelve months derived from the most
recent annual financial budgets approved by the Board of Directors and
extrapolates cash flows as follows:
Software & Services CGU:
Cashflows derive from the board approved 3-year financial plan (inclusive of
12-month annual budget) and are extrapolated for a further two years at a
growth rate of 3% (2024: 5%). The forecast includes a terminal value at a
terminal growth rate of 3%.
Training CGU:
Cashflows derive from the board approved 3-year financial plan (inclusive of
12-month annual budget) and are extrapolated for an additional two years at a
growth rate of 3% per annum (2024: 3%). The forecast includes a terminal value
based off an average income from the 5-year period forecast - this is done to
factor in the cyclicality experienced in the Training CGU due to long order to
delivery gestation periods.
The forecast cash flows of each CGU are discounted at the following pre-tax
rates to provide the value in use for each CGU:
Training CGU: 11.79% (2024: 13.47%)
Software & Services CGU: 11.32% (2024: 13.12%)
The rates have been calculated to reflect the working capital structure of the
Group as each CGU utilises the optimal capital structure, being both debt and
equity.
The discounted cash flows provide headroom for the goodwill carrying values in
excess of their respective assets in the case of each CGU with the Training
headroom being £7 million and Software headroom of £5 million both after
considering terminal values.
Key assumptions are based on past experience and external sources. No
impairment of goodwill has been recorded in either the year ending 31 December
2025 or 31 December 2024. The Directors have assessed the sensitivity of the
assumptions detailed above and consider that it would require significant
adverse variance in any of the assumptions to reduce fair value to a level
where it matched the carrying value
5 Other intangible assets
During the year the Group capitalised £1,517k (2024: £1,349k) of costs in
relation to the ongoing development of the Auxilium software suite of
solutions including enhancements to existing software related assets. More
information can be found in the CEO's report.
No impairments have been identified in 2025 (2024: £831k) An impairment
review was performed as at 31 December 2025 and following sensitivity analysis
performed on the key assumptions, no impairment to other intangible assets was
deemed necessary.
6 Borrowings
The Group has cash and cash equivalents of £466k (2024: £1,045k) and a bank
overdraft of £679k (2024: £3,330k).
On 31 December 2025 the Group had available bank overdraft facilities, for use
by its UK trading entities and provided by HSBC UK, of £1.0 million (2024:
£3.5 million) which have reduced on the sale of freehold property.
Any overdraft arising from the facility is repayable on demand and carries
interest at 2.75% (2024: 2.50%) plus the bank's base rate. Any facilities used
are secured by fixed and floating charges over the assets of Pennant
International Group plc, Pennant International Limited and by cross-guarantees
between those companies.
Post Period-end, the Group has taken actions to ensure that ongoing operations
are appropriately funded via the renewal of the existing HSBC overdraft
facility up to an available limit of £1.0 million for a further 12-month
period.
On 23 October 2025 the group received a loan of £320,000 from Brett Gordon, a
shareholder of the company. The transaction is treated as a related party
transaction for the purposes of AIM Rule 13 and is disclosed on that basis.
The loan is unsecured, bears an interest rate of 9.75% per annum, and is
repayable on 23(rd) April 2026. As the loan is due within twelve months after
the reporting date, it is classified as a current financial liability in
accordance with IAS 1.69(d). The carrying amount of the loan, including
accrued interest, at year‑end was £323k (2025: £nil). The loan is measured
at amortised cost in accordance with IFRS 9 Financial instruments. No breach
of covenants or defaults occurred during the reporting period.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR BLLLLQXLZBBB
Copyright 2019 Regulatory News Service, all rights reservedRecent news on Pennant International
See all newsREG - Pennant Int. Group - Final Results & Notice of Investor Presentation
AnnouncementREG - Pennant Int. Group - Training Systems Contract Win
AnnouncementREG - Pennant Int. Group - Trading & Strategy Update, Notice of Results
AnnouncementREG - Pennant Int. Group - Directorate change
AnnouncementREG - Pennant Int. Group - Director Dealing
Announcement