9th Aug 2019 11:28
(Alliance News) - Technical training equipment firm Pennant International PLC on Friday said first half trading was ahead of internal expectations, but full year results will be lower than market forecasts due to contract delays and problems with integrating a newly-acquired company.
Shares in the company were down 24% at 59.00 pence each in London.
For the six months to June 30, the company expects to report revenue of GBP7.3 million, 44% lower year-on-year from GBP13.2 million, but better than expectations.
Pennant also anticipates an interim GBP1.5 million loss before interest, taxes and amortisation. In the same period last year, the company's Ebita were GBP2.1 million.
Full year Ebita is expected to be "materially lower than market expectations", forecast to fall by 45% to GBP1.8 million from GBP3.3 million recorded in 2018.
The company acquired Aviation Skills Partnership for GBP6.8 million earlier this year, but due to Brexit uncertainty, Pennant said integration is taking longer than anticipated. The company initially forecast the aviation training unit to generate revenue in 2019 but now expects to see revenue from it in 2020.
Delays in the contract to supply electro-mechanical trainers for the Ajax fighting vehicles, owned by the UK arm of defence firm General Dynamics Corp, also contributed to the full-year performance warning. Following a customer request, the programme's schedule may be extended with revenue not expected until later in the year.
In more positive news, Pennant's contract to deliver training aids to Qatar is on-track to generate revenue in the second half of 2019, as forecast, and its consulting services deal with Canada's Department for National Defence "is delivering to budget".
In August 2018, the company was provisionally selected for a "major" contract, worth up to GBP30.0 million and expects to be formally awarded the deal in 2020. Similarly, a number of smaller contracts which were expected to be sealed in the second half of this year, will now be realised in 2020.
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