Pennant International has provided a business update for the year ending 31 December 2024. The company is expected to report results that align with market expectations, projecting revenues of around £14 million and adjusted earnings before interest, taxation, and amortisation (EBITDA) of approximately £1.2 million.
In a move to streamline operations, Pennant has significantly restructured its legacy Training Systems division. The company is focusing its investments and resources on expanding its Software and Technical Services segments, which offer more predictable revenue streams, higher margins, and greater scalability. This shift also shortens the working capital cycle. As part of the restructuring, announced on 23 September 2024, Pennant reduced its workforce by about 30 roles and agreed to sell three commercial units at its Staverton site for £1.2 million. The remaining site continues to be marketed.
The Training Systems division is now concentrating on modifications, retrofits, and overhauls to its existing installations, with an active pipeline of opportunities. One notable project is the £5 million GenFly upgrade for the UK Ministry of Defence, scheduled for contract award in April 2025. The restructuring is expected to result in annualised cost savings of £2 million, including reductions in wages, operating expenses, and finance costs. However, the restructuring will incur a one-off cost of approximately £0.5 million in cash, with additional exceptional non-cash charges.
Looking forward, Pennant’s business is now structured into three main segments: Software, Technical Services, and Training Systems. The company operates across three key regions: EMEA, Americas, and Asia Pacific.
The upcoming launch of the Auxilium software suite is a significant milestone for the company. Set for release on 31 March 2025, Auxilium will combine Pennant’s proven applications—GenS, Analyzer, and R4i—into a single integrated solution. This new offering is designed to strengthen Pennant’s 25-year track record in providing trusted software for the defence sector. The company has already received initial orders and is actively bidding on several key opportunities ahead of the full launch.
Looking ahead, the company expects growth in its higher-margin Software and Technical Services segments, alongside the cost savings from the restructuring. Pennant forecasts a modest profit before tax for the financial year ending 31 December 2025 and strong conversion of operating profit into cash. For FY25, the Software and Technical Services segments are expected to increase both as a proportion of total revenues and in absolute terms, while turnover from the Training Systems segment is expected to decrease following the completion of the Apache programme. The company currently has £7 million in order coverage for FY25, a solid position given the upcoming full launch of Auxilium.
Pennant International’s strategic restructuring and focus on high-growth segments put the company in a strong position to drive future profitability and growth, particularly with the anticipated success of its new software offerings.
