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PEN Pennant International Group Plc

29.70
0.00 (0.00%)
Last Updated: 08:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Pennant International Group Plc LSE:PEN London Ordinary Share GB0002570660 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 29.70 29.00 30.40 29.70 29.70 29.70 1,185 08:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Engineering Services 13.69M -901k -0.0244 -12.17 10.95M

Pennant International Group PLC 2017 Interim Results (3019Q)

11/09/2017 7:00am

UK Regulatory


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TIDMPEN

RNS Number : 3019Q

Pennant International Group PLC

11 September 2017

11th September 2017

Pennant International Group plc

Interim Results for the six months ended 30 June 2017

"Profitable first six months of 2017; deliveries on major overseas contracts; delay on one contract but with potential upside in 2018; strong order book and encouraging pipeline for 2018 to 2020 and beyond."

This announcement contains information which, prior to its disclosure by this announcement, was inside information for the purposes of the Market Abuse Regulation

Pennant International Group plc ("Pennant" or the "Group"), the AIM quoted supplier of integrated training and support solutions, products and services, principally to the defence, rail, aerospace and naval sectors and to Government Departments, announces its interim results for the six months ended 30 June 2017 (the "Half Year" or the "Period").

Commenting on the results, Chairman Simon Moore said:

"The Group recorded a pre-tax profit for the six months ended 30 June 2017 and as highlighted in the Trading Update announced in July, the Half Year saw valuable contract extensions with key customers, Lockheed Martin and the Canadian Department of National Defence, as well as the continued performance of major contracts secured during 2016.

The performance for the Half Year has been achieved during what has been a transitional period for the Group, with the appointment of Phil Walker as CEO and the commencement of significant investment in people, products and infrastructure."

Key points: Financial

   --      Group revenues for the Period of GBP9.6 million (H1 2016: GBP6.6 million); 
   --      profit before tax of GBP935,353 (H1 2016: GBP10,582); 
   --      profit for the Period attributable to shareholders of GBP935,353 (H1 2016: GBP10,582); 
   --      gross profit margin of 38% (H1 2016: 36%); 

-- cash used in operations of GBP2.3 million (H1 2016: cash generated from operations of GBP1.2 million);

-- trade and other receivables of GBP10.7 million (H1 2016: GBP5.2 million), including GBP7.3 million due from contracts (H1 2016: GBP2.6 million);

   --      nil borrowings; 
   --      net cash at Period end of GBP1.1 million (H1 2016: GBP2.6 million); 
   --      basic earnings per share of 2.84p (H1 2016: 0.04p per share); 
   --      no interim dividend declared (H1 2016: nil); 

-- order book of GBP42 million (H1 2016: GBP46 million) including GBP35 million (H1 2016: GBP36 million) currently scheduled for delivery in the next three calendar years (2018, 2019 and 2020);

   --      effective nil tax rate; unrelieved tax losses of GBP2.5m (H1 2016: GBP4.7m); 
   --      minimal impact of Brexit on Group, other than short term currency fluctuations. 

Key points: Operational

-- Ongoing production and initial delivery of training aids in fulfilment of a second phase contract with undisclosed Middle Eastern customer worth in excess of GBP7 million;

-- ongoing production of training aids for delivery in second half of 2017 in accordance with a contract with another undisclosed Middle Eastern customer worth GBP6 million;

-- performance of the Group's contract with a prime contractor for electro-mechanical trainers and courseware (the "UK Contract") affected by the rescoping of the contract led by the prime contractor;

-- on-track progression of contract with Lockheed Martin to provide Rotary Wing Rear Crew Winch Trainer in support of Rear Crew Training for the United Kingdom Military Flight Training System for delivery in 2017;

-- amendment to the Group's contract with the Canadian Department of National Defence, adding C$3.8 million to the contract value for the remaining term to September 2018;

   --      an Omega PS software sale to Fleetway; 

-- a new contract with Kawasaki Heavy Industries in Japan in relation to the Thomson-East Coast Line (Singapore's new mass rapid transport rail project);

   --      a contract amendment for Network Rail's Electrical Control Room software simulator; 

-- multiple sales of Genskills Trainers to new customers in Abu Dhabi, China, Russia and Singapore;

-- successful transition of Phil Walker into the role of CEO and establishment of a leadership team, with key appointments made;

-- major investments made in facilities, infrastructure, people, products and significant bid activity with further expenditure committed.

Commenting on the Group's prospects for the year as a whole, Simon Moore added:

"Following the successful Half Year, good progress continues to be made on major contracts. However, due to a prime contractor-led rescoping of the UK Contract, the Board anticipates that revenues for the year will be below current market expectations.

This is a timing issue since overall contracted revenues on the UK Contract are unchanged (and may increase, depending on the revised scope) and future years' performance should benefit from any delayed revenues.

The Group is actively progressing several opportunities, including the negotiation of final accounts, which the Board considers have a reasonable prospect of mitigating the effect on profit of the reduced UK Contract revenues for 2017.

The Board is therefore confident that the Group's profit will be broadly in line with current market expectations for the year ending 31 December 2017.

Prospects for next year and beyond remain positive and the Group's future contracted order book of GBP42 million provides good long-term visibility of revenues, with contracted revenues currently scheduled for delivery over the next three calendar years which total GBP35 million."

Enquiries:

 
 Pennant International           www.pennantplc.co.uk 
  Group plc 
 Philip Walker, CEO 
  David Clements, Company        +44 (0) 1452 714 881 
  Secretary                      +44 (0) 1452 714 914 
 
 WH Ireland Limited              www.whirelandplc.com 
 Mike Coe / Ed Allsopp           +44 (0) 117 945 3470 
 
 Walbrook PR (Financial      paul.vann@walbrookpr.com 
  PR) 
 Paul Vann / Tom Cooper           +44 (0)20 7933 8780 
                              Mob: +44 (0)7768 807631 
 

Pennant International Group plc

Interim Report for the six months ended 30 June 2017

Chairman's Statement

On behalf of the Board of Directors, I can report that the Group recorded a pre-tax profit for the six months ended 30 June 2017 (GBP935,353), an outcome which exceeds the equivalent period for 2016 (GBP10,582).

The Group's financial performance for the Half Year, and to the date of this announcement, is in line with market expectations for the full year.

The Group has experienced challenges in performing the UK Contract, and further detail is provided in the 'Operational Commentary' below.

This performance for the Half Year has been achieved during what has been a transitional period for the Group, with the appointment of Phil Walker as CEO and the commencement of significant investment in people, products and infrastructure.

Results and dividend

Revenues for the Period increased 45.5% to GBP9.6 million (H1 2016: GBP6.6 million), driven by the ongoing performance of major contacts secured during 2016.

The Group was profitable for the Half Year, recording a profit after tax of GBP935,353 (H1 2016: GBP10,582).

The gross profit margin for the Period also improved to 37.9% (H1 2016: 36.3%) as a result of the sales mix, in particular increased revenue from the sale of training aids.

Administrative costs for the Period were GBP2.7 million (H1 2016: GBP2.4 million). This increase is attributable to inflationary employee pay rises; costs associated with the cessation of the former CEO's employment; together with higher-than-budgeted costs incurred in progressing contract bids (reflective of the Group's pipeline of substantial opportunities).

Basic earnings per share for the Half Year improved significantly to 2.84p compared to 0.04p for the same period last year.

Cash used in operations amounted to GBP(2.3) million (H1 2016: GBP1.2 million cash generated in operations), reflecting the fact that the Group is engaged in significant production in order to deliver key contracts. Despite ongoing cash usage, the Group maintains nil borrowings and had cash reserves at the end of the Period of GBP1.1 million (H1 2016: GBP2.6 million).

An effective nil tax rate is expected for the full year with unrelieved tax losses of GBP2.5 million carried forward at Half Year.

The Group's order book at Half Year stood at GBP42 million (H1 2016: GBP46 million) with contracted revenues currently scheduled for delivery over the next three calendar years amounting to GBP35 million (comprising GBP15 million for 2018, GBP11 million for 2019 and GBP9 million for 2020).

The Directors have concluded that it is in the best interests of the Company and its shareholders to retain cash at this time for working capital and investment. The Board will therefore not be declaring an interim dividend.

Operational Commentary

Delivering Contracts

Middle East

The Period saw the Group engaged in, and making significant progress on, the production of various training aids to fulfil contracts with two key customers based in the Middle East (one contract (which is in its second phase) being worth in excess of GBP7 million and the other GBP6 million) (the "Middle East Contracts"). The equipment being supplied under the Middle East Contracts includes part task trainers and mechanical and avionics systems for practising maintenance activities.

Factory Acceptance testing and Quality Assurance testing was completed for certain of the manufactured items during the Half Year, with initial delivery and Site Acceptance commencing during June 2017 (all invoices raised by Pennant on the Middle East Contracts during the Half Year have been settled in full).

UK Contract

The UK Contract was awarded to the Group and announced in September 2015.

Following the Half Year, the prime contractor confirmed to Pennant that it wished to change the scope of the contract and has acknowledged the impact of these delays on Pennant's scheduled delivery.

Pennant and the prime contractor continue to work together to finalise requirements, revised schedule and commercial impact with a view to enabling re-commencement of the contract as soon as possible. Pennant now considers that meaningful resumption of work on the UK Contract is unlikely before the end of 2017.

The relationship between the parties remains strong, with each committed to delivering the project under the UK Contract, which the Group expects to be fully delivered, with the balance of contractual revenue (anticipated to be not less than GBP5 million) realised, during 2018 and 2019.

Securing Contracts

During the Half Year, the Group secured a number of new contracts and agreed valuable amendments to existing contracts.

Prior to the Period, the Group had contracted to provide computer based training to Lockheed Martin in relation to the Chinook Mk 6 programme and during the Half Year, Lockheed Martin exercised an option within that contract to purchase additional emulation software from Pennant for delivery in early 2019. This amendment increases the contract value by GBP2 million.

The Group also sold Genskills Trainers to new customers in Abu Dhabi, China, Russia and Singapore.

Elsewhere within the Training Systems division, the Group continued to progress delivery of its contract with Lockheed Martin to provide a Rotary Wing Rear Crew Winch Trainer in support of Rear Crew Training for the United Kingdom Military Flight Training System.

The Group's Software Services division (home to the Omega PS software suite) agreed an amendment to the Group's existing contract for software consultancy services with the Canadian Department of National Defence, adding C$3.8 million to the contract value for the remaining term to September 2018. The sale of an Omega PS software package to Fleetway was also concluded.

In the rail sector, the Group entered into a new contract with Kawasaki Heavy Industries in Japan for training courseware in respect of the Thomson-East Coast Line (the new mass rapid transport rail project in Singapore) and agreed a contract amendment with Network Rail to deliver additional functionality for the Electrical Control Room software simulator previously developed by Pennant.

Management Changes and Investment in People

During the Half Year, Phil Walker was appointed as CEO (effective 1 March 2017). Mr Walker had been a Director and Group CFO since November 2014.

Mr Walker and the Board have implemented changes to the Group's management structure to improve effectiveness and good governance. These changes include the formation of a Management Committee which meets monthly with the remit to review and discuss operational matters and to support the CEO in the day to day running of the Group's business.

The Period saw the Group make a number of key appointments, including David Clements as Company Secretary and Gary Barnes as Head of Finance (reporting direct to the Board on monthly management accounts).

These appointments will, respectively, strengthen: the Group's commercial, risk and compliance framework; financial function; training delivery, product development and user insight; and procurement process and supplier management, and underline the Group's commitment to investing in people.

Investment in Products

During the Period, the Board and Management Committee focused on targeted product development and the Group commenced work on a new suite of virtual reality training products, including an upgraded virtual parachute training system for which there is significant customer interest. Similarly, preliminary work has been undertaken with a potential joint-venture partner in the United States in respect of collaboration on virtual reality products aimed at the US Military. Further opportunities for product development were also identified during the Period (and commenced in H2 2017).

Investment in Facilities

The Group took possession of two additional new commercial premises adjacent to its existing facilities, doubling the Group's overall production capacity and allowing for future growth.

Group Re-structuring

The beginning of the Half Year saw the consolidation of the Group's Support business with its Development business as part of the restructuring and strengthening of the Group into three divisions: Software Services; Support and Development; and Training Systems. The consolidation of the Support and Development businesses into Pennant Support and Development Services Limited has brought together into one operating unit the contract support functions previously spread across the Group and the benefits of these two teams working closely together are already being realised.

Post Period End

Continued Investment

In July 2017, the Board committed to spending an additional GBP500,000 on the Group's facilities during the second half of 2017 ("H2 2017"). This expenditure will predominantly comprise building works at the Group's new Pennant Connection site to create office space to house its software development team and the installation of a high-speed fibre optic link between Pennant Connection and the head office site.

In August 2017, the Group had an offer accepted on a plot of land adjoining the Pennant Connection site, which will provide room for future expansion, together with improved access to and control of the overall site.

Furthermore, in July 2017, the decision was taken to initiate development of two new generic training products to address gaps identified in the market; these are relevant to an ongoing contract bid involving the Group and will also form standalone products in their own right. These projects accord with the Group's strategy of increasing the proportion of its sales which derive from generic training products.

Contract Awards and Amendments

The Group is pleased to announce that the following long-term contracts for services have been agreed since the end of the Half Year:

The Group's contract for logistical support at RNAS Yeovilton has been renewed for a further five years, with gross contract revenues anticipated to be in the region of GBP1.25 million over the life of the contract.

An amendment and extension to the Group's existing contract with BAE Systems Australia for the maintenance of training equipment at the Defence Aeroskills Training Academy at Wagga Wagga (the "Academy", the "DATA Contract") has been agreed. The DATA Contract came into effect in 2013 with an initial five-year term to 2018 and has previously been extended to cover 2019.

The life of the DATA Contract is to be extended by two years to cover 2020 and 2021, with the scope of services available from Pennant to be increased to include the update and refurbishment of training equipment. This amendment will initially add AUD 3.5 million (c. GBP2.17 million) to contracted revenues, with a further budget agreed for the additional services.

Furthermore, with effect from September 2017, and in response to a request raised under the DATA Contract, Pennant is supplying up to eight training instructors to the Academy for a 12 month period, representing a new line of services under the DATA Contract within existing budgets.

The Software Services division also concluded sales of Omega PS to Stadler Rail and Damen Shipyards Group following the end of the Half Year.

Outlook

Following the successful Half Year, good progress continues to be made on major contracts. However, due to a prime contractor-led rescoping of the UK Contract, the Board anticipates that revenues for the year will be below current market expectations.

This is a timing issue since overall contracted revenues on the UK Contract are unchanged (and may increase, depending on the revised scope) and future years' performance should benefit from any delayed revenues.

The Group is actively progressing several opportunities, including the negotiation of final accounts, which the Board considers have a reasonable prospect of mitigating the effect on profit of the reduced UK Contract revenues for 2017.

The Board is therefore confident that the Group's profit will be broadly in line with current market expectations for the year ending 31 December 2017.

Prospects for next year and beyond remain positive and the Group's future contracted order book of GBP42 million provides good long-term visibility of revenues, with contracted revenues currently scheduled for delivery over the next three calendar years which total GBP35 million.

With bids for significant new contracts in progress, the Board is confident about the Group's prospects for increasing revenues through organic growth and is actively exploring complementary strategic acquisitions and joint-ventures with a view to expanding the breadth and depth of the Group's offering of products and services, and to enhance underlying revenues.

Finally, the Board and I would like to thank all staff across the Group for their hard work and dedication during the Period and, with various exciting initiatives ongoing, I look forward to updating the market on the Group's progress in due course.

S A Moore

Chairman

Pennant International Group plc

Interim Report for the six months ended 30 June 2017

PENNANT INTERNATIONAL GROUP plc

CONSOLIDATED INCOME STATEMENT for the six months ended 30 June 2017

 
                     Notes    Six months    Six months     Year ended 
                                ended 30      ended 30    31 December 
                               June 2017     June 2016           2016 
------------------  ------  ------------  ------------  ------------- 
                               Unaudited     Unaudited        Audited 
------------------  ------  ------------  ------------  ------------- 
                                     GBP           GBP            GBP 
------------------  ------  ------------  ------------  ------------- 
 Revenue                       9,642,978     6,648,634     17,211,455 
------------------  ------  ------------  ------------  ------------- 
 Cost of sales               (5,990,533)   (4,235,697)   (10,249,472) 
------------------  ------  ------------  ------------  ------------- 
 Gross profit                  3,652,445     2,412,937      6,961,983 
------------------  ------  ------------  ------------  ------------- 
 
 Administrative 
  expenses                   (2,719,886)   (2,402,778)    (5,057,374) 
------------------  ------  ------------  ------------  ------------- 
 Operating profit                932,559        10,159      1,904,609 
------------------  ------  ------------  ------------  ------------- 
 
 Finance costs                     (814)         (387)        (9,051) 
------------------  ------  ------------  ------------  ------------- 
 Finance income                    3,608           810          7,781 
------------------  ------  ------------  ------------  ------------- 
 Profit before 
  taxation                       935,353        10,582      1,903,339 
------------------  ------  ------------  ------------  ------------- 
 
 Taxation              2               -             -         17,691 
------------------  ------  ------------  ------------  ------------- 
 Profit for the 
  period                         935,353        10,582      1,921,030 
------------------  ------  ------------  ------------  ------------- 
 
 Earnings per 
  share                3 
------------------  ------  ------------  ------------  ------------- 
 Basic                             2.84p         0.04p          6.48p 
------------------  ------  ------------  ------------  ------------- 
 Diluted                           2.68p         0.04p          6.06p 
------------------  ------  ------------  ------------  ------------- 
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 June 2017

 
                            Six months   Six months     Year ended 
                              ended 30     ended 30    31 December 
                             June 2017    June 2016           2016 
------------------------   -----------  -----------  ------------- 
                             Unaudited    Unaudited        Audited 
------------------------   -----------  -----------  ------------- 
                                   GBP          GBP            GBP 
------------------------   -----------  -----------  ------------- 
 Profit attributable 
  to equity holders 
  of the parent                935,353       10,582      1,921,030 
-------------------------  -----------  -----------  ------------- 
 Other comprehensive 
  income: 
------------------------   -----------  -----------  ------------- 
 Items that will 
  may be reclassified 
  to profit and 
  loss 
------------------------   -----------  -----------  ------------- 
 Property impairment                 -            -      (276,212) 
-------------------------  -----------  -----------  ------------- 
 Deferred tax                        -            -         46,956 
-------------------------  -----------  -----------  ------------- 
 Exchange differences 
  on translation 
  of foreign operations       (43,039)      308,782        413,469 
-------------------------  -----------  -----------  ------------- 
 Comprehensive 
  income attributable 
  to equity holders 
  of the parent                892,314      319,364      2,105,243 
-------------------------  -----------  -----------  ------------- 
 

PENNANT INTERNATIONAL GROUP plc

CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2017

 
                                 30 June      30 June   31 December 
                                    2017         2016          2016 
---------------------------  -----------  -----------  ------------ 
                               Unaudited    Unaudited       Audited 
---------------------------  -----------  -----------  ------------ 
                                     GBP          GBP           GBP 
---------------------------  -----------  -----------  ------------ 
 Non-current assets 
---------------------------  -----------  -----------  ------------ 
 Goodwill                        966,744      955,599       964,159 
---------------------------  -----------  -----------  ------------ 
 Other intangible 
  assets                         206,509      424,597       295,780 
---------------------------  -----------  -----------  ------------ 
 Property plant and 
  equipment                    3,036,405    2,571,221     2,642,448 
---------------------------  -----------  -----------  ------------ 
 Available-for-sale                    -        3,700             - 
  investments 
---------------------------  -----------  -----------  ------------ 
 Deferred tax asset              483,467      534,917       482,989 
---------------------------  -----------  -----------  ------------ 
 Total non-current 
  assets                       4,693,125    4,490,034     4,385,376 
---------------------------  -----------  -----------  ------------ 
 
 Current assets 
---------------------------  -----------  -----------  ------------ 
 Inventories                      73,417       29,854             - 
---------------------------  -----------  -----------  ------------ 
 Trade and other 
  receivables                 10,658,049    5,156,109     7,820,128 
---------------------------  -----------  -----------  ------------ 
 Cash and cash equivalents     1,129,171    2,596,678     3,517,541 
---------------------------  -----------  -----------  ------------ 
 Assets held for 
  sales                                -            -       575,000 
---------------------------  -----------  -----------  ------------ 
 Current tax asset                 4,754            -             - 
---------------------------  -----------  -----------  ------------ 
 Total current assets         11,865,391    7,782,641    11,912,669 
---------------------------  -----------  -----------  ------------ 
 
 Total assets                 16,558,516   12,272,675    16,298,045 
---------------------------  -----------  -----------  ------------ 
 
 Current liabilities 
---------------------------  -----------  -----------  ------------ 
 Trade and other 
  payables                     3,035,577    4,896,321     3,824,925 
---------------------------  -----------  -----------  ------------ 
 Current tax liabilities               -       89,129         1,610 
---------------------------  -----------  -----------  ------------ 
 Obligations under 
  finance leases                   4,632        7,186         4,070 
---------------------------  -----------  -----------  ------------ 
 Deferred revenue                270,339      261,582       162,500 
---------------------------  -----------  -----------  ------------ 
 Total current liabilities     3,310,548    5,254,218     3,993,105 
---------------------------  -----------  -----------  ------------ 
 
 Net current assets            8,554,843    2,528,423     7,919,564 
---------------------------  -----------  -----------  ------------ 
 
 Non current liabilities 
---------------------------  -----------  -----------  ------------ 
 Obligations under 
  finance leases                  30,682            -        31,957 
---------------------------  -----------  -----------  ------------ 
 Deferred revenue                 13,892            -        18,403 
---------------------------  -----------  -----------  ------------ 
 Deferred tax liabilities        287,625      391,857       287,625 
---------------------------  -----------  -----------  ------------ 
 Warranty provisions             150,000            -       150,000 
---------------------------  -----------  -----------  ------------ 
 Total non-current 
  liabilities                    482,199      391,857       487,985 
---------------------------  -----------  -----------  ------------ 
 
 Total liabilities             3,792,747    5,646,075     4,481,090 
---------------------------  -----------  -----------  ------------ 
 
 Net assets                   12,765,769    6,626,600    11,816,955 
---------------------------  -----------  -----------  ------------ 
 
 Equity 
---------------------------  -----------  -----------  ------------ 
 Share capital                 1,647,177    1,402,100     1,649,277 
---------------------------  -----------  -----------  ------------ 
 Share premium                 2,677,571        8,400     2,685,971 
---------------------------  -----------  -----------  ------------ 
 Capital redemption 
  reserve                        200,000      200,000       200,000 
---------------------------  -----------  -----------  ------------ 
 Treasury shares                       -    (418,225)             - 
---------------------------  -----------  -----------  ------------ 
 Retained earnings             7,379,696    4,305,612     6,347,343 
---------------------------  -----------  -----------  ------------ 
 Translation reserve             374,028      312,380       417,067 
---------------------------  -----------  -----------  ------------ 
 Revaluation reserve             487,297      816,333       517,297 
---------------------------  -----------  -----------  ------------ 
 Total equity                 12,765,769    6,626,600    11,816,955 
---------------------------  -----------  -----------  ------------ 
 

PENNANT INTERNATIONAL GROUP plc

CONSOLIDATED STATEMENT OF CASH FLOWS for the six months ended 30 June 2017

 
                                    Notes      Six months    Six months     Year ended 
                                                    ended         ended    31 December 
                                                  30 June       30 June           2016 
                                                     2017          2016 
---------------------------------  ------  --------------  ------------  ------------- 
                                                Unaudited     Unaudited        Audited 
---------------------------------  ------  --------------  ------------  ------------- 
                                                      GBP           GBP            GBP 
---------------------------------  ------  --------------  ------------  ------------- 
 Net cash (used in) / 
  generated from operating 
  activities                          4       (2,341,178)     1,223,274      (249,248) 
---------------------------------  ------  --------------  ------------  ------------- 
 
 Investing activities 
---------------------------------  ------  --------------  ------------  ------------- 
 Interest received                                  3,608           810          7,781 
---------------------------------  ------  --------------  ------------  ------------- 
 Proceeds of sale of property                           -        23,621              - 
  plant and equipment 
---------------------------------  ------  --------------  ------------  ------------- 
 Proceeds from sale of 
  available-for-sale investments                        -             -          4,314 
---------------------------------  ------  --------------  ------------  ------------- 
 Proceeds from sale of                            575,000             -              - 
  assets held-for-sale 
---------------------------------  ------  --------------  ------------  ------------- 
 Purchase of intangible 
  assets                                         (62,075)      (10,529)       (28,438) 
---------------------------------  ------  --------------  ------------  ------------- 
 Proceeds from sale of 
  motor vehicles                                        -             -         12,491 
---------------------------------  ------  --------------  ------------  ------------- 
 Purchase of property 
  plant and equipment                           (503,679)      (13,887)    (1,086,896) 
---------------------------------  ------  --------------  ------------  ------------- 
 Net cash used in investing 
  activities                                       12,854            15    (1,090,748) 
---------------------------------  ------  --------------  ------------  ------------- 
 
 Financing activities 
---------------------------------  ------  --------------  ------------  ------------- 
 Proceeds from sale of 
  ordinary sales                                        -             -      3,342,973 
---------------------------------  ------  --------------  ------------  ------------- 
 Repurchase of B and C                           (10,500)             -              - 
  shares 
---------------------------------  ------  --------------  ------------  ------------- 
 Net (repayment of)/funds 
  from obligations under 
  finance leases                                    (713)      (14,999)         13,842 
---------------------------------  ------  --------------  ------------  ------------- 
 Net cash used in financing 
  activities                                     (11,213)      (14,999)      3,356,815 
---------------------------------  ------  --------------  ------------  ------------- 
 
 Net (decrease) / increase 
  in cash and cash equivalents                (2,339,537)     1,208,290      2,016,819 
---------------------------------  ------  --------------  ------------  ------------- 
 
 Cash and cash equivalents 
  at beginning of period                        3,517,541     1,123,456      1,123,456 
---------------------------------  ------  --------------  ------------  ------------- 
 Effect of foreign exchange 
  rates                                          (48,833)       264,932        377,266 
---------------------------------  ------  --------------  ------------  ------------- 
 
   Cash and cash equivalents 
   at end of period                             1,129,171     2,596,678      3,517,541 
---------------------------------  ------  --------------  ------------  ------------- 
 

PENNANT INTERNATIONAL GROUP plc

STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2017

 
                      Share       Share       Capital    Treasury    Retained   Translation   Revaluation        Total 
                    capital     premium    redemption      shares    earnings       reserve       reserve       equity 
                                              reserve 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
                        GBP         GBP           GBP         GBP         GBP           GBP           GBP          GBP 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 At 1 January 
  2016            1,402,100       8,400       200,000   (418,225)   4,230,206         3,598       839,157    6,265,236 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Profit for the 
  year                    -           -             -           -   1,921,030             -             -    1,921,030 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Other 
  comprehensive 
  income                  -           -             -           -           -       413,469     (276,212)      137,257 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Total 
  comprehensive 
  income          1,402,100       8,400       200,000   (418,225)   6,151,236       417,067       562,945    8,323,523 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Issue of 
  ordinary 
  shares            247,177   2,677,571             -     418,225           -             -             -    3,342,973 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Recognition 
  of share 
  based 
  payment                 -           -             -           -     103,503             -             -      103,503 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Deferred tax 
  on 
  revaluation 
  loss                    -           -             -           -      46,956             -             -       46,956 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Transfer from 
  revaluation 
  reserve                 -           -             -           -      45,648             -      (45,648)            - 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 At 31 December 
  2016            1,649,277   2,685,971       200,000           -   6,347,343       417,067       517,297   11,816,955 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Profit for 
  period                  -           -             -           -     935,353             -             -      935,353 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Other 
  comprehensive 
  income                  -           -             -           -           -      (43,039)             -     (43,039) 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Total 
  comprehensive 
  income          1,649,277   2,685,971       200,000           -   7,282,696       374,028       517,297   12,709,269 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Purchase of 
  B and C 
  shares            (2,100)     (8,400)             -           -           -             -             -     (10,500) 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Recognition 
  of share 
  based 
  payment                 -           -             -           -      67,000             -             -       67,000 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 Transfer from 
  revaluation 
  reserve                 -           -             -           -      30,000             -      (30,000)            - 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 At 30 June 
  2017            1,647,177   2,677,571       200,000           -   7,379,696       374,028       487,297   12,765,769 
---------------  ----------  ----------  ------------  ----------  ----------  ------------  ------------  ----------- 
 

PENNANT INTERNATIONAL GROUP plc

NOTES TO THE FINANCIAL INFORMATION for the six months ended 30 June 2017

   1.   Basis of preparation 

This condensed set of financial statements has been prepared using accounting policies expected to be adopted for the year ending 31 December 2017. These are anticipated to be consistent with those applied in the Group's latest annual audited financial statements for the year ended 31 December 2016. These accounting policies are drawn up in accordance with International Accounting Standards and International Financial Reporting Standards as issued by the International Accounting Standards Board and adopted by the EU.

The comparative figures for the year ended 31 December 2016 set out in this Interim Report are not statutory accounts. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498 (2) or s498(3) of the Companies Act 2006.

AIM-listed companies are not required to comply with IAS34 'Interim Financial Reporting' and the Company has taken advantage of this exemption.

2. Taxation

The taxation charge for the Period is based on the estimated rate of tax that is likely to be effective for the full year to 31 December 2017.

3. Earnings per share

Basic earnings per share are calculated by dividing the profit for the Period attributable to the shareholders by the weighted average number of shares in issue. The calculation of diluted earnings per share takes into account the potentially diluting effect of share options.

 
                              Six months     Six months     Year ended 
                                ended 30       ended 30    31 December 
                               June 2017      June 2016           2016 
-------------------------  -------------  -------------  ------------- 
                                     GBP            GBP            GBP 
-------------------------  -------------  -------------  ------------- 
 Earnings 
-------------------------  -------------  -------------  ------------- 
 Net profit attributable 
  to equity shareholders         935,353         10,582      1,921,030 
-------------------------  -------------  -------------  ------------- 
 
 Number of shares                 Number         Number         Number 
-------------------------  -------------  -------------  ------------- 
 Weighted average 
  number of ordinary 
  shares                      32,943,533     26,472,261     29,647,844 
-------------------------  -------------  -------------  ------------- 
 Diluting effect 
  of share options             2,007,619      2,077,619      2,026,786 
-------------------------  -------------  -------------  ------------- 
 Weighted average 
  number of ordinary 
  shares for the purpose 
  of dilutive earnings 
  per share                   34,951,152     28,549,880     31,674,630 
-------------------------  -------------  -------------  ------------- 
 

4. Cash generated from operations

 
                                  Six months    Six months     Year ended 
                                    ended 30      ended 30    31 December 
                                   June 2017     June 2016           2016 
----------------------------  --------------  ------------  ------------- 
                                         GBP           GBP            GBP 
----------------------------  --------------  ------------  ------------- 
 Profit / (Loss) 
  for the Period                     935,353        10,582      1,921,030 
----------------------------  --------------  ------------  ------------- 
 Finance income                      (3,608)         (810)        (7,781) 
----------------------------  --------------  ------------  ------------- 
 Finance costs                           814           387          9,051 
----------------------------  --------------  ------------  ------------- 
 Income tax (credit) 
  / expense                                -             -       (17,691) 
----------------------------  --------------  ------------  ------------- 
 Depreciation of 
  property, plant 
  and equipment                      112,386       134,625        284,319 
----------------------------  --------------  ------------  ------------- 
 Amortisation of 
  other intangible 
  assets                             151,323       153,048        299,801 
----------------------------  --------------  ------------  ------------- 
 Profit on disposal 
  of property, plant 
  and equipment                            -             -         16,877 
----------------------------  --------------  ------------  ------------- 
 Profit on disposal 
  of available-for-sale 
  investments                              -             -          (614) 
----------------------------  --------------  ------------  ------------- 
 Share-based payment                  67,000        42,000        103,503 
----------------------------  --------------  ------------  ------------- 
 Operating cash flows 
  before movement 
  in working capital               1,263,268       339,832      2,608,495 
----------------------------  --------------  ------------  ------------- 
 
 (Increase)/ decrease 
  in receivables                 (2,837,921)   (1,412,674)    (4,076,693) 
----------------------------  --------------  ------------  ------------- 
 (Increase) in inventories          (73,417)             -         29,854 
----------------------------  --------------  ------------  ------------- 
 Increase/(decrease) 
  in payables                      (789,348)     2,238,411      1,317,015 
----------------------------  --------------  ------------  ------------- 
 Increase/(decrease) 
  in deferred revenue                103,328        87,414          6,735 
----------------------------  --------------  ------------  ------------- 
 Cash generated from/(used 
  in) operations                 (2,334,090)     1,252,983      (114,594) 
----------------------------  --------------  ------------  ------------- 
 
 Tax (paid) / refund                 (6,274)      (29,322)      (125,603) 
----------------------------  --------------  ------------  ------------- 
 Interest paid                         (814)         (387)        (9,051) 
----------------------------  --------------  ------------  ------------- 
 Net cash generated 
  from/(used in) operations      (2,341,178)     1,223,274      (249,248) 
----------------------------  --------------  ------------  ------------- 
 
   5.   Copies of this statement 

Copies of this statement will be available on the Group's website (www.pennantplc.co.uk) and from Pennant International Group plc, Pennant Court, Staverton Technology Park, Cheltenham, GL51 6TL.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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