Lockdown lack of meetings affects training systems company’s results

Pennant

Remote working due to the Covid-19 lockdown has impacted on the first half results at Pennant International Group plc, the Cheltenham-headquartered company which supplies training systems to the defence, aerospace and rail industries.

Zoom may work for some, but the company said that delays in key meetings, the unavailability of relevant customer personnel and the disruption and productivity impact of total remote working have delayed progress on the Group’s engineered-to-order programmes, while local lockdowns have prevented delivery and installation of Pennant training aids at customer sites overseas. Restrictions in Canada and Australia have reduced budgeted services revenues in those territories.

As a result, the Group now expects to report revenues of approximately £6.3 million for the first half. After providing for the continuing impact of Covid-19 on certain programmes, the Company anticipates reporting an underlying EBITA loss of £2 million.

In July Pennant announced the award of a new contract with an initial order value of £1.5 million. The award follows the Company’s announcement in February  that it had received a statement of intent for the purchase of training aids worth up to £5 million from a long-standing customer in the Middle East.

The company said that the Covid-19 impact on revenues is expected to continue through the second half, and turnover for the 2020 financial year is now likely to be in the region of £14 million.

However Pennant anticipates that its financial performance will improve significantly in the second half and expects to make an EBITA profit for the six months to year-end.

The contracted order book scheduled for delivery over the next three years stood at a healthy £36 million at the end of the First Half (31 December 2019: £33 million). The Group remains focused on converting its pipeline and is actively pursuing new opportunities across all business units.