Pennant International Group plc, the Gloucester-based business which trains operators and maintainers in the defence and regulated civilian sectors, has reported a challenging first half of the trading year, with Covid-19 significantly impacting on revenues.
Group revenues for the period were £6.3 million, down from £7.3 million in the same period last year.
Chairman Simon Moore said: “The First Half was challenging, with Covid-19 having a significant impact on revenues across the Group, resulting in an operating loss being recorded at the end of the Period.
“However, cash generated from operations was strong amounting to £3.8 million and the Group also secured increased borrowing facilities totalling £4 million (undrawn at Period end).
“Having navigated this exceptional period, material improvements in performance are anticipated in the second half as revenues across the Group improve.”
While recording an underlying EBITA loss of £2.0 million (H1 2019: loss before interest, taxation and amortisation of £1.5 million), the company’s three-year order book (to 30 June 2023) remains strong at £36.0 million
In January, Pennant announced that it had bought Australian software business Absolute Data Group Pty Ltd for around £1.7 million, adding high-margin software product and recurring services revenues to the Group. It also secured a £1.5 million uplift on a contract with General Dynamics.
Simon Moore added: “The Board anticipates that trading will improve significantly in the second half, and the Group now expects to make an EBITA profit of approximately £1.0 million (operating profit of circa £300,000) for the six months ending 31 December 2020.
“While a loss for the year as a whole is still expected, the Group’s prospects are positive, with a lean, optimised cost base (the full benefit of which will be realised in 2021) and a contracted three-year order book of £36 million, including £14 million of revenues scheduled for delivery in 2021.
“Furthermore, across our well-developed domestic and international markets the Group has a sizeable and maturing active pipeline of prospects for potential contracts worth in excess of £40 million which include opportunities with long-standing customers, single-source contracts, major software licences and long-term services contracts”