Pennant International Group plc, the Cheltenham-headquartered, AIM-quoted supplier of integrated training and support products and services which train and assist operators and maintainers in the defence and regulated civilian sectors, has been awarded two new overseas contracts.
The news comes as the Group provides an update on its financial year ending December 31, 2019.
Preliminary unaudited assessment of the Group’s trading for FY2019 indicates that Pennant will report revenues of around £20 million and a three-year order book at year-end of £33 million,of which around £16 million is scheduled for delivery in 2020.
In order to gear up for major contracts, the Group invested over £3 million in freehold property. The properties acquired are currently being used on the Qatar programme and on the helicopter maintenance trainer contract announced on 31 October 2019 and are necessary for the further expansion of the business.
The Group continues to focus on its strategic objective of increasing the proportion of its revenues which derive from software and services, particularly those of a recurring nature.
Recent steps taken include an agreement to acquire Absolute Data Group (announced on 21 January 2020) which will form part of an enlarged, enhanced ‘Integrated Logistics Support’ offering as well as providing an increased presence in Pennant’s target growth markets of North America and Australasia.
Pennant is actively considering other strategic opportunities to partner with or acquire complementary businesses and will continue to invest in developing its product range and its ability to deliver complementary services.
With a contracted order book of £33 million scheduled for delivery over the next three years, together with a sizeable pipeline of single-source opportunities, the Board remains confident of future prospects and of building and delivering long-term shareholder value.
The two new contract wins are in Australia and the Middle East.
Pennant Australasia Pty Ltd (the Group’s wholly-owned Australian subsidiary) has been awarded a contract for the supply of Pennant training aids and associated services for aviation technician training for the Australian Defence Force at a new training facility in Nowra, Australia.
The contract has been awarded by Air Affairs Australia Pty Limited, and is Pennant’s second contract in region for training aids. The support services element forms part of the Group’s long term strategy to generate an increasing proportion of its revenues from services, particularly services which are both complementary to its product range and relevant to the sectors within which it already operates.
The contract is to be delivered over 2020 and 2021 (as an initial phase). The contract value is commercially confidential.
The Group also received an order valued at around £1.5 million for the provision of additional training aids to the Middle East. The order includes two new training solutions, including a ‘crew escape trainer’, which have been created under the Group’s product development strategy and will form part of the Group’s range of generic training aids.
The Group says it anticipates receiving further orders from this long-standing customer during the year.
Pennant Group CEO, Phil Walker, said: “These exciting new contracts demonstrate not only the increasing diversity of our product and services portfolios but also the Group’s continued ability to win business internationally. They will also help to underpin the Group’s 2020 financial performance.”