20th Apr 2020 11:49
(Alliance News) - Pennant International Group PLC on Monday said higher costs and lower revenue sent it swinging to loss in 2019.
Pennant provides training software for aviation and engineering in the defence and regulated civilian sectors.
The company reported a pretax loss for 2019 of GBP1.6 million compared to GBP3.2 million profit the year prior, as revenue declined to GBP20.4 million from GBP21.1 million.
Pennant recorded land & buildings impairment of GBP819,496 and goodwill impairment of GBP1.2 million for Aviation Skills Partnership Ltd. No such costs were reported in 2018. Pennant acquired Aviation Skills Holdings Ltd, the parent company of Aviation Skills Partnership back in February of 2019.
In addition, administrative expenses rose to GBP6.6 million in 2019 from GBP5.1 million in 2018.
During the recent year, the company said it implemented a cost reduction exercise and various roles were removed from the business. The aggregate cost associated with terminations of employment resulting from this exercise was GBP700,000. It is anticipated that this programme will realise gross annualised savings of over GBP1 million, Pennant said.
"2019 was a challenging year for Pennant. Delays to expected contract awards and a drawn-out re-basing of a key programme, all conspired to reduce activity levels, slow progress and place margins under increasing pressure," explained Chair Simon Moore.
Gross profit margin declined during the year to 36% from 39% in 2018, reflecting the broadly consistent mix of products and services delivered across the two years.
In order to gear up for major contracts, the company said it invested over GBP3 million in freehold property. The properties acquired are currently being utilised on its Qatar programme and on its helicopter trainer contract, Pennant said.
Looking ahead, Moore added: "In light of the ongoing Covid-19 pandemic, the economic outlook across the globe remains highly uncertain. Much will depend on the stimulus packages that governments make available to support impacted businesses and the wider economy."
Pennant said its three-year order book at end-2019 stood at GBP33 million, slightly below its GBP37 million value at the end of the year prior.
The AIM stock was trading 13% lower in London on Monday at 33.55 pence a share.
By Evelina Grecenko; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Pennant International