Pennant Share Discussion Threads

[hastings] 27/9/2016 07:50

Agreed, broker target price lifted with comfort to 80p.

[masurenguy] 27/9/2016 07:19

Looking good - losses eliminated, positive cash flow and a record order book.

RNS Number : 8785K
Pennant International Group PLC
27 September 2016

Interim Results for the six months ended 30 June 2016

Return to profit; Trading in line with market expectations;

Four new contracts secured; Strategic new customers including Lockheed Martin Corporation; Record Group Order Book of £46m at Period-End;

Pennant International Group plc ("Pennant" or "the Group"), the AIM quoted supplier of integrated logistic support solutions, products and services, principally to the defence, rail, aerospace and naval sectors and to Government Departments, announces Interim Results for the six months ended 30 June 2016.

Commenting on the results and the Group's prospects for the year as a whole, new Chairman Simon Moore said: "The Group recorded a modest pre-tax profit for the six months ended 30 June 2016, an outcome that is significantly better than the equivalent period last year. Furthermore, as highlighted in the Trading Update announced in June, the directors expect a substantial improvement in trading in the second half and, based on the levels of the confirmed record Order Book, are confident of a successful outcome for the year as whole."

Highlights: Financial

· Group revenues for the period of £6.6m (2015: £5.7m);

· Profit before tax of £10,582 (2014: loss before tax £0.75m);

· Profit for the period attributable to shareholders of £10,582 (2015: loss £0.75m)

· Cash generated from operations of £1.2m (2015: cash used in operations of £(1.0) m);

· Nil borrowings; Net cash at period end of £2.6m (2015: £(0.6)m);

· Basic earnings per share of 0.04p (2014: loss of (2.86p) per share);

· No Interim dividend declared (2015: 1.0p);

· Record Order Book: £46mn at Period-End including £36m for delivery in 2017, 2018 & 2019

· Effective nil tax rate; unrelieved tax losses of £4.7m;

· Minimal impact of Brexit on Group, other than short term currency fluctuations;

· Post period-end, an oversubscribed share issue at 55p per share to raise £3.56m before expenses to provide additional working capital for new and existing contracts;

Highlights: Operational

· Secured second phase contract with undisclosed Middle Eastern customer worth in excess of £7m;

· Secured the first phase of a supply contract with a new strategic Middle Eastern customer worth £6m;

· Awarded new landmark contract with Lockheed Martin Corporation MST (LMC) with potential value of £2.2m over 18 months;

· Secured second contract with LMC to provide Rotary Wing Rear Crew Winch Trainer (RCWT) in support of Rear Crew Training for the United Kingdom Military Flight Training System (UKMFTS);

· Successful completion of contract with an Indian customer for the provision of software based training capability;

· Re-profiling of strategic single source contract due to run rate progressing ahead of expected levels. Early discussions commenced to renew the contract and increase its value;

· Sale of new licenses for the use of the Group's Integrated Logistics Support Software product, OmegaPS, to Oshkosh.

Mr. Moore concluded: "The Board remains confident that trading will be in line with current market expectations for the year ending 31 December 2016. Notwithstanding the current global economic outlook, to date, we have seen very little noticeable impact on the Group's trading from the Brexit vote. Prospects for next year and beyond remain very positive with the future contracted Order Book, valued in aggregate at more than £46m including £36m with delivery currently scheduled as to £18m in FY2017, £10m in FY2018 and £8m in FY2019, providing good long-term visibility of revenues."

[hastings] 21/9/2016 08:43

Results next Tuesday and catching up with management, so will be penning something on the back of that.

[gengulphus] 16/8/2016 17:26

Well, it's now pretty clear where his million shares went:



Gengulphus

[cfro] 15/8/2016 18:18

SP down only 1p by the close. :-)

[hastings] 15/8/2016 17:34

Good point ed, but equally, I recall Directors at QXT and more recently KWS selling to meet demand and the shares in both have subsequently gone on to perform very well.

[edsullyjoe] 15/8/2016 16:58

Pennant RNS 15 Aug 2016

"....following excess demand for its Placing, details of which were announced on 12 August 2016, Chris Snook, Chief Executive of the Company, has today sold 1,000,000 Ordinary Shares"


The last time I read something like that was an RNS from Solid State on 15th July 2015. Since when their shares have fallen about 50%

"....there has been significant demand for the Company's shares, both from new and existing institutional shareholders. In order to meet this demand the founder of the Company, Gordon Comben and ex-director Bill Marsh, each of whom retired from the board at the end of last year, have agreed to sell some of their shares"

[masurenguy] 15/8/2016 13:16

It was good that they were able to get this placing away at a 12.7% discount to Fridays closing price especially when one takes into account the fact that the shareprice had doubled over the past 3 months. It'll be interesting to see in due course what new institutional investors have come aboard. However the CEO's disposal of two-thirds of his current shareholding - and without participating in the placing either - does not exactly constitute a very positive forward indicator.

[topvest] 15/8/2016 12:36

Hadn't spotted the 1m share sale. Hardly a vote of confidence. It looks to me that the customer on the new contract had them over a barrel and squeezed them on the commercial terms. Maybe this has what caused Powell to resign his Chairman position? Anyway, I'd be very wary here. It's starting to look like a cash consuming business for at least the next year. Too much risk of something going wrong.

[hastings] 15/8/2016 11:19

Revised EPS today from WH Ireland 7.4p this year 7.1p next year after full account of new shares take affect.

Fwd PER of little more than 8 looks very good value imo.

No doubt we will find out later in the week which new holders have joined the existing ones who recently upped their stake.

[nfs] 15/8/2016 10:47

You have to time phase in the issuance re new shares issuedThe earnings have been earned throughout the whole year So shares issued with say 1 month of the year left are weighted 1/12 in the eps calculation

[stevemarkus] 15/8/2016 10:24

interceptor, that eps forecast of 7.9p will need to be adjusted for the extra shares in issue, from 26.5M shares pre-placing to 32.9M shares post-placing. I make it around 6.36p per share on that basis.

Cheers,
Steve.

[sphere25] 15/8/2016 09:35

OVERSUBSCRIBED!
EXCESS DEMAND!
SIGNIFICANT DEMAND!

Who are they kidding? The placing has been done at a discount and the CEO is clearly using this so called "demand" as a means to dump a large amount of stock. This is further to the Powells dumping large amounts also.

They have little faith in the company imo.

I don't buy the BS, be wary.

All imo.

[topvest] 15/8/2016 09:05

Helps their funding problem then. It should be noted though that new contracts used to be cash generative for Pennant as they were paid ahead of doing the work from the MoD and others in advance payments. The Middle East work is obviously on a fundamentally different basis and significantly increases the balance sheet risk in my view. If they had to raise this much it just shows what a problem they had and why the dividend was canned.

[cfro] 15/8/2016 08:25

One major positive is that there is clearly strong institutional demand for the shares hence not much of an share price dip this morning.

[hastings] 15/8/2016 08:18

Brief broker note out first thing reaffirming previous forecasts and target price with a very positive view on the raise.As with others never over the moon on being effectively locked out, but equally accept the situation.PEN looks extremely well placed to move forward and good to see new institutional investors buying into the story. Hence as with others happy to be holding.

[interceptor2] 15/8/2016 07:51

Good to get the placing away and oversubscribed. That was my only concern with Pennant, that they needed to raise cash for the increase in contracted work.

So trading in line to full year expectations of EPS 7.90p, no wonder institutions oversubscribed the placing at 55p, PER = 7.0. :o)

ps... £500,000 for new premises, and cash was low at last year end at £1.12m, no borrowings.yet unused bank facility of £1.5m.

[cfro] 15/8/2016 07:48

Do they really need to raise this amount though, it seems rather a lot.

At least the shares are over-subscribed and the placing price isn't too far below current price.

[value hound] 15/8/2016 07:21

Well unfortunately you don't get to join the discounted placing party as it's already done & dusted. This is always the way with AIM stocks and is cleaner and more efficient etc. But it still feels one leaving a little aggrieved.

[pj 1] 02/8/2016 18:39

I've joined the party today, a bit late but plenty to go for

[cfro] 02/8/2016 18:00

Been adding more today. My second largest position now.

[lanzarote666] 02/8/2016 12:09

Profit taking is healthy, and an intra-day reversal would be positive in my mind.

I still have a fair value of 80-95p in my eyes following those big contract wins and positive outlook. We shall see.

[cfro] 02/8/2016 12:04

Bouncing a bit now but not been a very good morning share price wise.

[varies] 28/7/2016 12:25

What a strange morning for this usually quiet share.
About 50,000 have been traded so far, mostly at 68-69p.
Some profit-taking was inevitable and one can seldom deal in more than 10,000. So today's sellers are showing some prudence.

[interceptor2] 28/7/2016 09:54

Exactly hasting, which is why these are now my largest holding, the visibility is reassuring for a stock which is still lowly rated, but with such strong potential.

Held these in 2012 when the share price enjoyed a 250% gain due to increased orders, unfortunately I only enjoyed a small part of that gain. But I believe the company is in a stronger position this time than in 2012, hence the reason I have been more aggressive than normal when building my position.

Still have all of notes from 2012 which is very handy when looking at comparisons.