Pennant much-improved performance, with profitability in-line with market expectations

Pennant International Group plc (LON:PEN), a leading global provider of training technology and integrated product support solutions, has announced its Final Results for the Financial Year ended 31 December 2022.

Commenting on the Group’s performance, Phil Cotton, Chair, said:

“I am pleased to report that the Group has delivered a much-improved performance in the year ended 31 December 2022, with profitability in-line with market expectations despite reduced revenues, achieving an EBITA profit of £0.5 million for the year (2021: EBITA loss of £0.8 million) and an EBITDA profit of £1.0 million (2021: EBITDA loss of £0.1 million).

The improved performance was primarily the result of the progress made towards our technology and software transformation, coupled with the completion of the legacy engineered solution contract. The Group’s ongoing focus on increasing revenues from software and technical services is reflected in these results, and generated revenues totalling £10.2 million in 2022 (2021: £9.1 million).”

Financial Summary   

·      Group revenues of £13.7 million (2021: £16.0 million);

·      Gross profit margin of 42% (2021: 27%);

·      EBITA profit of £0.5 million (2021: EBITA loss of £0.8 million);  

·      Loss before tax of £1.4 million (2021: loss before tax of £2.5 million);

·      Loss for the year attributable to shareholders of £0.9 million (2021: loss of £1.6 million);

·      Basic loss per share of 2.89p (2021: loss of 4.41p)

·      Group net assets at year-end of £10.5 million (2021: £11.1 million);

·      Net debt at year-end of £0.4 million (2021: net debt of £3.5 million);

·      No final dividend recommended (2021: £NIL);

·      Three-year order book at year-end stood at £25 million (2021: £22 million).

Post Period-End

·      Acquisition of Track Access Productions Limited.

·      Board strengthened with new appointments.

·      Positive net cash position achieved in Q2 2023.

Operational Summary

A summary of new contract awards, amendments and operational achievements during the year is set out below:

·      Contract secured from Boeing Defence UK Limited for the upgrade of UK Apache training equipment, worth £8.8 million over three years, with the initial engineering milestone event successfully passed.

·      Delivery and full device acceptance achieved on the £3.5 million UK Helicopter programme.

·      ‘Launch partner’ programme for the new GenS software product initiated with key customers signed up.

·      Surplus freehold site (Pennant Court) sold in August for £2.1 million with proceeds used to paydown borrowings.

On current trading and prospects, Mr Cotton concluded:

“Over the last financial year, the business has become more resilient as we continue to deliver on the critical objective of increasing visibility and recurrence of earnings, especially those derived from software and technical services.

The global economic and geo-political environment and supportive strategic backdrop for Pennant’s capabilities means that the Board believes that the Group’s underlying strengths – our long-term customer relationships with governments and major OEMs, our specialist services together with our quality-assured reputation –  provide solid foundations for continued recovery and long-term success.”

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