Pennant Share Discussion Threads

[hastings] 18/10/2023 14:29

Hopefully add my write up sometime Friday.Happy enough to take another 15 which has gone through as a sell!

[40 fathoms] 14/10/2023 05:02

Look forward to the write up. Recent DT interview posted a couple of days ago.

[hastings] 13/10/2023 13:49

Catching up with the CEO on Monday, so I'll add a write up after that!

[hastings] 11/10/2023 10:22

I'd say the seller is very much out, at last!

[oldtimer169] 11/10/2023 09:46

seller may be out and share price slowly returning to more sensible level.DYOR

[40 fathoms] 07/10/2023 02:11

@Hastings, I think you are almost certainly correct that it is BGF clearing the last of its line.

[oldtimer169] 06/10/2023 16:46

Simon says buy.Seller says bye bye.I say I added on the drop.Debt will drop as the contract unwinds.DYOR

[hastings] 06/10/2023 15:59

Was only back in May that Harwood (Chris Mills) increased, so I'm guessing seller is Business Growth Fund which has been reducing in a number of areas. If correct it's nearly out save for circa 300k shares. It'll be interesting to which name/s pop out!

[nick rubens] 06/10/2023 15:04

Looks like a fairly big sell caused the drop. Needs willing buyers to take them up. Not sure if I want to buy them myself as is the case with any other companies as high interest rates and a slowing economy has yet to take it's course. Bear Market blues you could say, but earnings or lack of them and companies with debts justify the gloom.

[chrisdgb] 06/10/2023 08:24

buy now while stocks last..........

[chrisdgb] 02/10/2023 11:12

Disappointing pull back.........

[40 fathoms] 29/9/2023 02:26

Above link is to the latest update from the ICs Simon Thompson

[masurenguy] 27/9/2023 07:59

Excellent progress in H1 !

Interim Results for the six months ended 30 June 2023

EBITA of £0.5m. fourth consecutive period of EBITA profit:
Record gross margin:
On track to meet full year expectations;

Commenting on the results, Chairman Philip Cotton said:"I am pleased to report that the Group has maintained positive earnings before interest, taxation and amortisation for a fourth consecutive period, with profitability in-line with market expectations for the year as a whole. Our plan to re-engineer the business to build on software, services and other higher-margin work - focusing on our unique breadth of products and services across multiple Integrated Product Support disciplines - is producing results."

Key points: Financial

-- Group revenues for the Period of £7.1m (H1 2022: £6.9m)

-- 46% of revenues generated from software licensing and associated activities (H1 2022: 52%)

-- Record gross margin of 47% (H1 2022: 41%) £0.5m (H1 2022: EBITA of £0.1m)

-- Earnings before interest, taxation, depreciation and amortisation (EBITDA) of £0.8mn (H1 2022: EBITDA of £0.4m)

-- Loss before tax of £0.4m (H1 2022: loss before tax of £0.8m)

-- Net debt at Period end of £1.9m (H1 2022: net debt of £4.1m)

-- Basic loss of (1.02)p per share (H1 2022: basic loss per share of (2.21)p per share)

-- Unrelieved tax losses of £7.1m carried forward (H1 2022: £6.7m carried forward)

-- Three-year order book at Period end stood at £25m (H1 2022: £27m)

Note: the above results are stated before circa GBP0.1 million of exceptional transaction and integration costs associated with the acquisition of Track Access Productions Limited. See note 5 to the Notes for a reconciliation between operating loss, EBITDA and EBITA.

Key points: Operational

-- Good progress on the circa GBP9 million Boeing Defence United Kingdom (BDUK) Apache upgrade programme, which is running on time and on budget, with final deliveries scheduled for completion in September 2024.

-- Acquisition of Track Access Productions Limited ("TAP") in April 2023, broadening Pennant's existing rail offering and customer base, and adding circa GBP0.3 million of subscription-based recurring revenues.

-- Version 2 of GenS released in May 2023, with first commercial sale achieved in June 2023.

-- Order intake secured during the First Half of £6.5m, which resulted in a Period-end three-year contracted order book of £25m.

Commenting on the Group's prospects, Philip Cotton added:"Given the burgeoning technological complexity of military, aviation and rail platforms, the demand for innovative Integrated Product Support solutions is only likely to grow, particularly with increasing defence budgets across the Western world. Our strategy has been formulated with precisely these factors in mind and with our developing S-Series solutions, we are well-placed to capitalise."

[hastings] 11/9/2023 08:18

Agree with that Mas.WH Ireland comment below. Pennant International – PEN - Corporate – New Pennant, new partnership, attractive beachhead in training information management systemsMarket Cap £14m Share Price 38pThis morning's Reach announcement from PEN highlights a further step forward for the company as it continues to grow the software orientation of the business. We anticipate that the new partner, Aquila Learning Ltd, will form an attractive enhancement of PEN's capabilities in training information management systems based on Aquila's Learning and Requirements/Resource/Record Management System (ALaRMS). The agreement is expected to provide a platform for growth to PEN's partner, given PEN's extensive client list in the UK and elsewhere, while from a PEN perspective, it meaningfully extends the company's integrated product software suite in a clearly complementary area, adding to existing strong software-based skill-sets of the company in areas such as analysis and design, modelling and virtual publications / maintenance, together with other virtual databases and channels.This morning's newsflow comes on the back of the company's July 19th update which highlighted significant revenue cover for the current year (90%-plus), revenues 50%-plus recurring in nature, software licencing / related revenues approaching half the total, and a significant upswing from the prior year in profitability and margins. On the latter score, gross margins at 47% in H1-23 play 41% in the previous H1, a significant improvement, while the EBITDA margin doubled YoY and EBITA also rose substantially. WHI view: we view this morning's announcement as a further reflection of the positive direction now taken by PEN – its software activities are much more profitable than the traditional training equipment activities, and this looks to be an excellent fit in that context. We believe that the significant data inputs that PEN currently receives as a matter of course from its clients will now find a further outlet for future activity supportive of PEN's clients. Beyond this, more generally, we note strong statements of progress from OEM's in PEN's core defence sector, including perennial clients of the company such as BAE, and in general a strong platform for growth in areas where PEN's is skilled, such as the efficient use and maintenance of complex equipment ranging from defence to infrastructure, areas which continue to see good growth based on increasing complexity, the enhanced demand for efficiency and the strong defence sector. We retain our £15.5m revenue / £1.3m adj. PBT / 3.5p EPS forecast for the current year unchanged ahead of PEN's interim results, which are expected on September 27th. For the present, we are sticking with our 65p current fair value benchmark.

[masurenguy] 11/9/2023 07:19

Looks like a good partnership which could enhance Pennants range of services.

Strategic Partnership with Aquila Learning Limited

Provides enhanced capabilities to Pennant's market-leading IPS software suite and expands customer base. Pennant International Group is pleased to announce that it has signed a strategic partnership agreement with Oxford-based Aquila Learning Limited ("Aquila"), a developer of innovative technologies and services for complex training needs, to collaborate on a number of projects, including the integration of the ALaRMS (Aquila Learning and Requirements/Resource/Record) Management System into Pennant's market-leading IPS software suite (GenS, Analyzer and R4i). Aquila already has established capabilities within defence organisations and OEMs in the UK and overseas. The new partnership agreement will provide users with additional capabilities and functionality, including an end-to-end S-Series software toolkit.

[hastings] 28/7/2023 07:56

No not really, rather like other companies, some buy and have plenty of skin in, others don't.

[spooky] 28/7/2023 07:53

Any thoughts on director shareholdings?

[hastings] 28/7/2023 06:23

Excellent post and summary 40 Fathoms.Personally expect the shares to seriously rerate as it continues to progress and deliver along with the inevitable and eventual recovery of the small/ micro cap space.I also see the presence of Harwood Capital as supporting the view.

[40 fathoms] 27/7/2023 23:55

Well I think the answer is yes, if you believe the change of business mix to SAAS/recurring services revenue is permanent. Recurring revenue now account for about 60% of total revenue, as opposed to historic revenue which came predominantly from large, one off engineered orders. However, if you don't believe that then I think the answers is probably no.

From my perspective it seems clear that something different is going on within the business and you can observe that very clearly in the step change that has occurred in gross margins. Gross Margin is now at @47% and this is predicted to increase further. This change remains observable even if you strip out the substantial negative margin contribution flowing from the Ajax program over the last few years.

I would also suggest that this change has not been all of a sudden but has in fact been years in the making. The results of the changing business mix have been obscured by the Ajax contract, which has now concluded. Just as a reminder the Ajax contract was won in 2012 on a fixed price basis and over the course of the 10 years it took to deliver, resulted in losses of @£5 million, the bulk of those incurred between 2019 and 2022.

If you factor in the positive defence spending backdrop likely over the next few years and then throw in the net cash position expected to be @£2million at the end of this year, the freehold property with a value of @£3 million, a £26 million order book, a £70 million pound 3 year opportunity pipeline and a forecast single digit P/E for next year, then it seems to me they are in a far better position than they have been for many, many years.

[arthur_lame_stocks] 27/7/2023 15:25

Is there really any reason to believe that this company which has been an inconsistent performer for as long as I have known it but mostly has disappointed is going to change all of a sudden?

[40 fathoms] 27/7/2023 15:15

Directors Talk interview post the recent trading update.

[40 fathoms] 19/7/2023 13:25

They are picking up a lot of business in Australia .... another AUD 1.2 million contract signed after the period close in early July.

Lots of big programs out there to pick up but there are three large MOD programs in the works which should be awarded over the next 12 Months

• New medium lift helicopter training capability
• New land vehicle maintenance training solution
• Next generation of aircraft training opportunity

1 would be good, 2 great but you would think we would be in with a chance for all 3.

[hastings] 19/7/2023 08:14

Decent TU in-line, with momentum building.Given the global defence spend now at record levels, PEN looks ideally placed to deliver with increasing levels of recurring revenue. PE of 10 falling to under 9 and move back into a net cash position highlights the discount on offer.

[masurenguy] 10/7/2023 16:15

"UK valuations are now well below international norms and small company valuations are even cheaper. The AIM All-Share index has only been lower in the wake of the collapse of the technology bubble in 2000, the depths of the 2008 financial crisis and during the brief Covid-panic of March 2020." James Carthew, Citywire.

[40 fathoms] 01/7/2023 01:23

A proactive investors interview with Phil Walker from a couple of days ago