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Pennant eyes higher revenue; Boeing deal advances with flying colours

19th Jul 2023 14:22

(Alliance News) - Pennant International Group PLC on Wednesday said it expects to report steady revenue and earnings growth in its half year results, and said its contract with Boeing Co is progressing well.

The Cheltenham, England-headquartered company provides training technologies and product support for the defence, aerospace and other industries.

Pennant said a preliminary unaudited assessment indicates GBP7.1 million in revenue for the first half of 2023, up from GBP6.9 million for the same period last year. The gross margin increased to 47% from 41%.

Approximately 56% of revenue for the period is recurring, down from 65% in 2022. 46% was generated from software licensing and associated activities, down from 52%.

Earnings before interest, tax, depreciation and amortisation meanwhile are expected to increase to GBP800,000 from GBP400,000. Ebita likewise increased to GBP800,000 from GBP400,000.

Total orders for the period reached GBP6.5 million, including GBP5.2 million in new orders since April.

Pennant also said that it "continues to make good progress" on its contract for Boeing Defence UK Ltd's Apache upgrade programme, and so far has passed six out of eight scheduled engineering design reviews. It still anticipates completion in September 2024.

Furthermore Pennant has now completed the integration of Track Access Productions Ltd, following its acquisition in April. TAP is generating revenue in line with management expectations, and combined with Track Access Services is expected to deliver about GBP900,000 in turnover and GBP400,000 in operating profit for 2023.

"Positive trading momentum has been maintained during the period, including the winning of several significant contracts and further Ebita growth," said Chief Executive Officer Philip Walker. "The successful integration of TAP has further broadened our rail customer base, diversified our offering and enhanced the group's recurring revenues.

"We continue to focus on increasing revenues from software and technical services, and further bolstering our robust order book."

Shares in Pennant were down 0.9% at 36.19 pence in London on Wednesday.

By Emma Curzon, Alliance News reporter

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