28th Sep 2015 07:23
LONDON (Alliance News) - Logistics services company Pennant International Group PLC saw its shares sink in early trade on Monday after it swung to a first half loss due to lower revenue and a challenging trading environment, and added that the outcome for the full year will be dependent on contracts being signed.
Pennant said its pretax loss for the six months to the end of June was GBP750,000, compared to a GBP1.2 million profit a year earlier, as revenue in the half plunged to GBP5.7 million from GBP9.6 million due to delayed contract awards.
The company, which provides logistic support services to the defence, rail, aerospace and naval sectors, said it was hit by challenging market conditions in the first half, with contract awards delayed by the low oil price, election uncertainty in the UK and public sector procurement complexities.
It did, in a separate statement, say it has won a GBP7.0 million contract from an unnamed global aerospace and defence contractor covering computer-based training and electro-mechanical maintenance training, which would be worth up to GBP9.0 million.
But Pennant said its outlook for the full year will depend on the timing of the approximately GBP15.0 million in contracts currently out for tender falling this year, which will mean its results for 2015 will be in line or will miss market expectations significantly.
"Notwithstanding the outturn for 2015, prospects for 2016 remain very positive and underpin the Directors' decision to increase the interim dividend payment," said Christopher Powell, Pennant's chairman, referring to the company's decision to sweeten the pill by hiking its interim dividend to 1.0 pence per share from 0.9 pence.
Pennant shares were down 19% in early trade to 62.75 pence, one of the worst performers in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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