Pennant International Group PLC Trading Update & Notice of Interim Results (1123K)
31 Agosto 2021 - 01:00AM
UK Regulatory
TIDMPEN
RNS Number : 1123K
Pennant International Group PLC
31 August 2021
FOR IMMEDIATE RELEASE
31 August 2021
PENNANT INTERNATIONAL GROUP PLC
Trading Update
&
Notice of 2021 Interim Results
Pennant International Group plc (AIM: PEN) (the "Group" or
"Company"), a leading global provider of training technology and
integrated product support solutions, announces the following
trading update ahead of the publication of its Interim Results for
the six months ended 30 June 2021 (the "First Half", or "H1 2021")
which are scheduled to be released on 22 September 2021.
First Half performance
In a financial year that is again predicted to be second half
weighted, the Group expects to report revenues for the First Half
of approximately GBP7.4m (2020: GBP6.3m) resulting in a loss before
interest, taxation and amortisation of GBP1m (2020: EBITA loss of
GBP2.5m). Net debt at the end of the period was GBP1.9m (2020:
GBP2.0m net cash), reflecting the expected cash outflows from
materials purchasing and production activities during the
period.
The Group's overall trading performance during the First Half
was satisfactory, given the economic backdrop, with progress made
across the majority of contracted programmes and with the cost
savings implemented in prior periods starting to be realised.
Within the Integrated Product Support ("IPS") division,
performance was strong with revenues of GBP2.6m, with the division
tracking revenue of GBP5.8m for the full year, and several new
customers and contracts secured.
In the Technical Training division, delivery of the UK
Helicopter trainer programme and the Qatar contract was in line
with or ahead of budget. The division's technical services
contracts in the UK and Australia also continued to perform
well.
However, the Group's H1 performance was significantly impacted
by factors relating to its contract with General Dynamics for the
Ajax training devices including:
-- the engineering complexity of emulating a vehicle which
itself remains under ongoing review and development;
-- deficiencies in the provision of OEM data and dependencies;
-- challenges within Pennant's own supply chain, including
delays and increases in the prices of parts and materials due to
global shortages; and
-- workplace restrictions and residual impacts relating to Covid-19.
In resolving these challenges, Pennant anticipates that the Ajax
programme will extend beyond the planned schedule (with the
attendant cost implications) and the Company is working closely
with General Dynamics to address the above issues and ensure a
successful delivery.
Order Book & Pipeline
The contracted order book scheduled for delivery over the next
three years stood at GBP25m at the end of the First Half (31
December 2020: GBP31m)
Pipeline conversion during the period has been suppressed by
reduced customer procurement activity induced by the Covid-19
pandemic and, in the UK, the completion of the Integrated Review of
Security, Defence, Development and Foreign Policy. For example,
Pennant has been informed that further substantial customer
consideration of the 'Major Programme' will likely not take place
until November this year, in which case any potential contract
award might not take place until 2022.
The Group is working hard to accelerate pipeline conversion
wherever possible and active negotiations are ongoing in relation
to multiple new opportunities, including several potential sales of
substantial software and services packages through the IPS division
and significant bid activity within Technical Training division
predominantly comprising software solutions for rail and aviation
sector customers.
Outlook
The Company anticipates that its financial performance will
improve significantly in the second half (as programme deliveries
continue and forecast pipeline is converted) and expects to make an
EBITA profit for the current six months to the 2021 year-end. On
this basis, the Company's trading remains in line with market
expectations for the year as a whole.
The Group will provide an update and further information when it
publishes its Interim Results on 22 September 2021.
Enquiries:
Pennant International Group plc www.pennantplc.co.uk
Philip Walker, CEO
David Clements, Commercial &
Risk Director +44 (0) 1452 714 914
WH Ireland Limited (Nomad and www.whirelandcb.com
Broker)
Mike Coe
Sarah Mather +44 (0) 20 7220 1666
Walbrook PR (Financial PR) paul.vann@walbrookpr.com
Paul Vann +44 (0)20 7933 8780
Tom Cooper Mob: +44 (0)7768 807631
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