Pennant Share Discussion Threads

[investorschampion] 22/5/2020 12:40

Shares continue to languish close to all time lows and there's little to cheer in the latest update. Revenues for the year ending December 2020 are now anticipated to approx. £16m, 21% down on the prior year which was also marginally lower than the year before. Read more in our daily update on the impact of the coronavirus on PEN and other stocks we follow here: hxxps://www.investorschampion.com/channel/blog/coronavirus-impact-22-may-more-fund-raises-to-close-the-week

[mfhmfh] 21/4/2020 09:54

company is slowly building recurring revenue streams.

[wilmdav] 21/4/2020 08:00

I have not seen the Simon Thompson article but expect he has drawn attention to the fact that PEN was profitable in H2, as predicted. Without the exceptional write-offs and restructuring charges they would have been profitable for the whole year. He may also have made contact with the house broker. I hope so because the forecasts for 2020 shown on Sharescope/Sharepad are probably pre coronavirus outbreak. Http://www.david-wilmshurst.co.uk/pen/pen_data.htm Click on the Excel sheet tabs to access charts and look especially at H2 figures. (I don't currently hold)

[arthur_lame_stocks] 20/4/2020 22:26

It has a very mixed record of profitability.

[topnotch] 20/4/2020 21:22

TBH - I've only been following this for the past 2 weeks and saw it as significant recovery stock...

[farnesbarnes] 20/4/2020 14:58

Indeed, you could have thought that at 62p 6 months ago. So why not 30p in other 6 months?

[topnotch] 20/4/2020 14:48

FarnesBarnes >> You know, never catch a falling knife - was waiting to see how low it went then buy on the way up but it recovered too damn fast!

[tole] 20/4/2020 13:01

Well we all knew Simon Thompson was gonna write something positive on results day didn't we..

[farnesbarnes] 20/4/2020 12:58

All 135 minutes. What were you doing? Why didn't you put a buy order on?

[mfhmfh] 20/3/2020 11:47

remember annual results date has been changed to 20th April. Double check for yourself.

[tole] 20/3/2020 11:34

This was the ST comment from mid late february.. before of course the coronovirus effect. https://www.investorschronicle.co.uk/comment/2020/02/24/follow-the-insiders/ Pennant’s contract momentum building Pennant (PEN:73p), an Aim-traded supplier of products and services that train and assist engineers in the defence and civilian sectors, has made an earnings accretive acquisition, won several new contracts and entered 2020 with a bumper three-year order book worth £33m. Moreover, having announced new orders for the provision of additional training aids on a Middle East contract, and one with the Australian Defence Force, Pennant has just received a Statement of Intent on a contract with another long-standing customer in the Middle East. The potential award to supply a generic suite of training aids has a contract value of £5m. Assuming it is confirmed in the first half of this year then £3m revenue will be recognised in the second half of 2020. On this basis, the 2020 order book will cover 85 per cent of analysts’ current year revenue estimate of £22.3m, up from £20m in 2019, which in turn underpins a two-thirds increase in this year’s underlying pre-tax profits (from £1.6m to £2.7m) and earnings per share (EPS) of 6.9p, up from 4.1p forecast in 2019. However, despite the raft of positive news flow, and an impressive conversion of the bid pipeline into confirmed contracts, Pennant’s share price has drifted since I last advised buying at 84p (‘Pennant’s growth back on track’, 4 November 2019). As a result the shares are only priced on 10.5 times 2020 EPS estimates even though a chunk of this year’s profit growth is already underpinned by substantial cost savings made by the company after the start date on a contingent contract (worth £28m in revenue over three years) was pushed back to 30 June 2020. Please note that Pennant’s £33m contracted order book excludes any contribution from this contingent award for the design, build and delivery of training equipment to the Ministry of Defence (MoD), thus offering upside for outperformance. Last month’s proposed acquisition of Absolute Data Group (ADG), a Brisbane-based software company, adds further weight to the investment case. It is highly complementary to Pennant’s existing Oracle-based software business that reduces the support cost of major capital equipment. Analyst Nick Spolair at house broker WH Ireland points out that “ADG’s software enables its client base (military aviation, commercial aerospace, and marine, rail, nuclear and automotive sectors) to manage vast quantities of maintenance and training data effectively, and is already being used as a dynamic extension to Pennant’s existing OmegaPS logistics product database.” This means that the combined business has a ready-made client base of new business targets, which already utilise one or the other of their systems. Furthermore, two thirds of ADG’s revenues are derived from the US where the company has worked with government agencies such as the US Air Force Communications Agency, thus extending Pennant’s geographic reach as well as strengthening its Australian business. The £3.4m consideration, of which half is being paid upfront and the balance is subject to an earn-out, equates to a reasonable 7.3 times ADG’s pre-tax profit in the 2019 financial year. From a technical perspective, a chart break-out above the 90p key resistance level would be a bullish signal and one that improves the chance of a move towards my 130p target price, albeit that’s below my original 180p target when I initiated coverage (Alpha Company Research: 'Pennant poised for a return to growth', 13 Aug 2018). Pennant’s heavily oversold shares rate a buy ahead of the annual results on 23 March 2020. Buy.

[tole] 20/3/2020 09:32

Had a nibble from here

[tole] 24/2/2020 12:50

Damn was watching this drift back looking to get in..

[pastybap] 24/2/2020 12:25

Really positive write up by ST in the investors chronicle today.

[big7ime] 03/2/2020 23:56

Well it came and went, unnoticed Not a bad profit considering the first half, we need confirmation of the Big deal they’ve been gearing up for. Then it’s going to rocket.

[big7ime] 28/1/2020 16:17

Must be due an update here very soon..

[mfhmfh] 21/1/2020 12:12

I found the following from today's announcement to be positive: - The Acquisition aligns with the Company's strategy, in particular it diversifies and enhances the Group's revenues and reduces reliance on substantial engineered-to-order contracts. - The Acquisition is expected to be earnings enhancing in the first year (before integration costs) - ADG operates at higher gross margins that Pennant's existing business lines All IMHO.

[paleje] 21/1/2020 08:25

Not an attention grabber clearly but the acquisition this morning looks solid to me, quality earnings at a fair price which is partly subject to performance over 5 yrs.

[mfhmfh] 08/11/2019 15:49

stream of buys today

[mfhmfh] 05/11/2019 18:53

From Downing Micro Cap Investment Trust half year Report: Strong order book and pipeline Potential delay in significant contract award Directors buying shares Acquisitions strengthens offering Announcement of new contract wins Progress against investment case The company has a long trading history, great IP and accreditations. Chairman Simon Moore has invigorated the partly new management team and moved the company's culture and ambitions forward. Interim results announced in September show that trading in the first half was in line with management expectations and previous guidance issued by the company. In the period the group was focused on building a suite of generic training aids and, with this work being recognised as work-in-progress at the end of the period, a pre-tax loss of £1.8 million was recorded, in line with revised guidance. There have been a number of customer-driven timing challenges on specific projects however, the company's strategy is progressing to plan with two acquisitions already completed so far this year. The group is well-positioned to exploit its considerable pipeline which includes over £30 million of single-source opportunities. For us, the attraction of this company is that we think it can continue to invest and see a return above its cost of capital and while improving the quality and diversity of earnings of the business.

[mfhmfh] 04/11/2019 12:14

Tipped by ST in IC today. short-term target price 130p.

[paleje] 12/8/2019 15:56

Simon Thompson gave us a boost today in the IC, saying it's a recovery buy. His concluding paragraph:- True, investors have marked down the shares heavily following Friday’s news and the share price has fallen by 40 per cent since I last suggested buying at 105p (‘Pennant repeat buying opportunity’, 9 May 2019). However, I can still see the company landing the three major contracts I have outlined above to double its three-year contract order book to £72m and underpin a step change in profitability in the years ahead. That possibility is simply not being priced into Pennant's market capitalisation of £23m. Recovery buy. https://www.investorschronicle.co.uk/comment/2019/08/12/pennant-s-recovery-potential/

[owenski] 12/8/2019 07:08

Oh dear, big time £5k purchases, no conviction there then.

[dompalmer] 12/8/2019 07:06

Looks like the Directors agree as they've taken advantage of the drop and bought more shares