Pennant International delivers significantly improved performance in 2021

Pennant International

Pennant International Group plc (LON:PEN), a leading global provider of training technology and integrated product support solutions, has announced its Preliminary Results for the Financial Year ended 31 December 2021.

Financial Summary  

·       Group revenues of £16.0 million (2020: £15.1 million);

·       Gross profit margin of 27% (2020: 29%);

·        Realisation of £0.9 million in costs savings as planned in 2020;

·       Loss before tax of £2.5 million (2020: loss before tax of £3.1 million);

·       EBITA loss of £0.8 million (2020: EBITA loss of £1.6 million); 

·       EBITDA loss of £0.1 million (2020: EBITDA loss of £0.9 million);

·       Loss for the year attributable to shareholders of £1.6 million (2020: loss of £2.6 million);

·       Basic loss per share of 4.41p (2020: loss of 7.22p);

·       Group net assets at year-end of £11.1 million (2020: £12.5 million);

·       Net debt at year-end of £3.5 million (2020: net debt of £1.5 million);

·       No final dividend recommended (2020: £NIL);

·       Three-year order book at year-end stood at £22 million (2020: £31 million).

Operational Summary

New contract awards, amendments and operational achievements during the year are set out below:

·       first commercial aerospace customer secured for IPS software and services in North America with a USD$1.1 million contract value;

·       continued on-time and on-budget delivery of the UK Helicopter programme valued at £3.4 million;

·       successful installation and commission of generic training devices in Qatar, enabling revenue to be recognised;

·       completion of build and factory acceptance on products for second Middle East customer, which were then delivered and installed in the second half; and

·       award of Australian defence services contract worth AUD$1.3 million.

Post period end highlights

·        Boeing Defence United Kingdom Limited (BDUK) £8.8 million contract awarded to Pennant. First milestone has been successfully passed.

·        Awarded USD$1.8 million contract for the supply of software and services to a second new customer in the North American commercial aerospace market.

·        Received an order worth up to £250,000 from UK Defence for the supply of the Group’s sophisticated, proprietary rotary-wing aircraft systems training software and related maintenance services.

·        Accepted an offer, subject to contract, in excess of book value for the Group’s property, Pennant Court which is now surplus to requirements due to the shift to hybrid working and the strategic focus on software development activities.

·        Contracted three-year order book now stands at more than £32 million, with approximately £13 million is scheduled for recognition in 2022 and £13m in 2023, with the balance in 2024.

Commenting on the Group’s performance, John Ponsonby, Chairman, said:

“I am pleased to report that the Group has delivered a significantly improved performance in 2021 compared with 2020 albeit the extent of the improvement is impacted by the well documented issues we have experienced on the UK Maintenance Training Equipment programme.

Revenue was up in both the Technical Training Division (TTD) and Integrated Product Support (IPS) Division. This was achieved despite the ongoing impact of Covid-19 and a challenging first half on which we reported an EBITA loss of £1.0 million. As anticipated, the second half was stronger, generating an EBITA profit of £0.2m, resulting in an EBITA loss of £0.8 million for the year as a whole.

Particularly pleasing has been the performance of the IPS division, where significant progress has been made in line with our strategy to increase visibility of revenues and, in particular, recurring revenues which are now running at an estimated £5.5 million for 2022.

For the year to 31 December 2021 as a whole, the Group recorded consolidated revenues of £16.0 million (2020: £15.1 million) and a consolidated loss before tax of £2.5 million (2020: loss before tax £3.1 million). The loss before interest, tax and amortisation (EBITA) was £0.8 million (2020: EBITA loss of £1.6 million) and EBITDA loss was £0.1 million (2020: EBITDA loss of £0.9 million).”

On current trading and prospects, Mr Ponsonby concluded:

“Looking forward, we are confident that our Group performance metrics in 2022 will be achieved, and our strategy to continue to build our global footprint and develop long-term partnerships, will bring further sales. The post period end realignment of operations into a global delivery model will enable the full spectrum of Pennant’s software, technology and services to be offered and delivered in all three key regions.

The current year has started well. In March 2022, we finally secured the Major Programme for Boeing Defence United Kingdom Limited – a contract worth £8.8 million over three years. With other contract wins also secured, our contracted three-year order book now stands at more than £32 million.

On this basis, the Board views prospects for 2022 with increasing confidence and looks forward to reporting a significantly improved performance for the current year.

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