Pennant International set to end year as expected
By Josh White
Date: Tuesday 10 Dec 2024
(Sharecast News) - Systems support software and training solutions specialist Pennant International forecast full-year results in line with market expectations in an update on Tuesday, flagging revenue of around £14m and adjusted EBITDA of £1.2m.
The AIM-traded firm said that during the 12 months ending 31 December, it undertook significant restructuring to pivot away from its legacy training systems business toward the higher-margin software and technical services segments.
It said the restructuring included a headcount reduction of around 30 roles, and the sale of three commercial units at the Staverton site for £1.2m.
Those actions were expected to deliver annualised cost savings of £2m.
The one-off restructuring cost, primarily related to staff termination payments and property exits, was estimated at £0.5m in cash terms, with additional non-cash charges being quantified.
Pennant said the training systems business would now focus on modifications, retrofits, and overhauls of existing systems.
Key opportunities included the anticipated £5m GenFly upgrade contract for the UK Ministry of Defence, expected to be awarded in April.
Meanwhile, the software and technical services segments were set for growth, driven by scalable revenue streams and shorter working capital cycles.
Pennant said it was planning to launch its integrated Auxilium software suite on 31 March next year.
The suite would consolidate its existing proprietary applications - GenS, Analyzer, and R4i - into a flexible subscription-based solution tailored for the defence sector.
It said the product had already attracted initial orders, with additional opportunities under review ahead of its full launch.
Looking ahead, Pennant's management anticipated a modest profit before tax in the 2025 financial year, adjusted for acquired amortisation, supported by increased contributions from software and technical services.
Order coverage for 2025 currently stood at £7 million, which the company considered a strong starting point given the pending launch of Auxilium.
Despite an expected decline in training systems revenue following the completion of the Apache program, the group forecast robust cash generation and continued growth in its core focus areas.
At 1550 GMT, shares in Pennant International Group were down 0.88% at 28.25p.
Reporting by Josh White for Sharecast.com.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN