- First half operating loss of £1m on revenue of £7.4m narrows from £2.5m loss in first half of 2020.
- £1m annual cost savings now being realised.
- Order book worth £26m for delivery through to June 2024.
- Strategic move to increase high margin software sales in the mix.
- £1.5m software contract awarded since half-year period end.
- Software, services and repeat build generic products account for 80 per cent of technical training unit’s £25m sales pipeline
- Integrated product support division has £14m sales pipeline.
Pennant (PEN:30p), an Aim-traded supplier of products and services that train and assist engineers in the defence and civilian sectors, is well on course to recoup all its first half adjusted pre-tax loss of £1.05m in the second half, and move into sustained profit in 2022. Indeed, chief executive Phil Walker is comfortable with WH Ireland’s full-year pre-tax profit estimate of £0.1m on revenue of £16m given that £7.2m of the £26m order book is slated for delivery in the second half.
The loss was flagged up three weeks ago in a pre-close trading update, the major issue being the company’s longstanding contract to provide electro-mechanical trainers and computer-based training for the Ajax fighting vehicles to the British Army. Supply chains issues, workplace restrictions and engineering complexity in emulating a vehicle (which itself is undergoing review and development) means that the planned schedule will not be completed until the first quarter of 2022. When Pennant reported its annual results in late April (‘Exploiting companies under the radar, 28 April 2021), the board had expected to book £2.1m of revenue from the contract in the first half of this year and a further £0.6m in the second half. Instead, Pennant booked £1.8m in the first half and a further £1m is slated for the second half, the shortfall effectively accounted for the company’s first half operating loss. However, there are strong grounds for optimism.