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 Shares Traded Last Trade
  0.00 0.0% 38.00 0.00 07:30:15
Bid Price Offer Price High Price Low Price Open Price
34.00 39.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Software & Computer Services 15.06 -3.14 -7.22 14
Last Trade Time Trade Type Trade Size Trade Price Currency
- O 0 38.00 GBX

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Pennant Daily Update: Pennant International Group Plc is listed in the Software & Computer Services sector of the London Stock Exchange with ticker PEN. The last closing price for Pennant was 38p.
Pennant International Group Plc has a 4 week average price of 38p and a 12 week average price of 37.50p.
The 1 year high share price is 52.25p while the 1 year low share price is currently 31.50p.
There are currently 36,446,385 shares in issue and the average daily traded volume is 33,056 shares. The market capitalisation of Pennant International Group Plc is £13,849,626.30.
gersemi: Tipped by the small-cap guru ST in the IC - --- 1 In active contract talks worth “seven figures” in revenue. 2 Contracted order book covers 90 per cent of 2021 estimates. 3 Proforma net cash and access to low-cost debt facilities. Annual results from Pennant (PEN:39p), an Aim-traded supplier of products and services that train and assist engineers in the defence and civilian sectors, were in line with the directors’ guidance given at the interim results (‘Companies on the rebound’, 24 September 2020). A Covid-19 pandemic induced first half underlying operating loss of £2m on revenue of £6m, reversed into a second half operating profit of £1m on revenue of £9.1m. These figures exclude £0.54m of restructuring expenses which will produce £1m of cost savings in 2021. Prospects for the momentum to build are undeniably positive. Firstly, £14.4m of Pennant’s £31m order book is for delivery in 2021 and includes two valuable government multi-year contracts (£5.4m of annual revenue) with the Canadian and Australian defence departments to use Pennant’s Oracle-based OmegaPS software product (reduces the support cost of major capital equipment). The 2021 order book also includes £1.4m of revenue from Absolute Data Group (ADG), a Brisbane-based software company that complements Pennant’s OmegaPS software. ADG helps its client base (military aviation, commercial aerospace, and marine, rail, nuclear and automotive sectors) to manage vast quantities of maintenance and training data. Pennant’s chief executive Phil Walker informed me that ADG, which was acquired for £3.4m last year, is “performing exceptionally well” and is in active contract talks with a US defence original equipment manufacturer (OEM) and an Australian company in relation to contracts worth “seven figures in revenue”. ADG’s North American trading subsidiary accounts for two-thirds of its annual sales. Winning either award would drive up earnings markedly given the high margins earned on software sales. Secondly, having landed a £1.5m training aids contract from a long standing Middle East customer last year, Walker revealed that the balance of the contract (around £3m) needs to be signed by the autumn for it to be fulfilled for the start of the 2022 academic year. Thirdly, Pennant’s £50m bid pipeline includes the 'Major Programme', for which it was 'down-selected' in August 2018. Progress to contract award (£15m to £20m) has been impacted by the UK Government's 'Integrated Review of Security, Defence, Development and Foreign Policy'. The Review was finally published last month and reaffirmed the UK Government's commitment to the relevant military platform. This means that the overarching programme should proceed, albeit Walker doesn’t expect any contract award until the latter part of 2021, at the earliest. Importantly, Pennant has balance sheet flexibility to fulfil its working capital requirements as business ramps up again. Proforma net cash is £1.1m and Pennant has a £4m low-cost bank facility with HSBC. The bottom line is that although house broker WH Ireland’s 2021 revenue estimate of £16m produces a modest pre-tax profit, there is a live chance of material outperformance if ADG lands any one of several live contracts in its pipeline. Buy. -
varies: Although I regret adding to my holding recently, including a purchase at 45p yesterday, I expect to see a recovery over the next 12 months. These results are uninspiring. The contract awards from the MOD are not expected until the autumn but the UK's share of PEN's turnover is less than 50% and we may reasonably hope for good business elsewhere. It is a little worrying to find net current assets reduced from £4400K to £165K and to read that PEN is still "in dialogue" with two businesses which it was thinking of buying 12 months ago. It seems to me that there is a substantial risk here of PEN needing to raise more capital but I intend to hold on.
boadicea: Yes - At the time of writing the share had hit a low of 37.5 and then recovered to 41p which I found surprising until I noted the delayed buy (line 34). I call that a bounce (if possibly a dead cat one!) when I had expected a further slide to 35/36p on the disappointing results. However, I have to agree the bounce was not maintained and a further drop is possibly on the cards.
boadicea: Interesting price action with an unexpected bounce after the initial sell-off. Line 34 is almost certainly a buy (1hr delayed). The price recovery appears to be leading the buy/sell ratio - indicating other hidden buys in the pipeline perhaps?
gengulphus: NYWB, The 1.64 million is listed as a sell on the london stock exchange ? I'm coming very late to this, but no, the London Stock Exchange doesn't list trades as buys or sells. That's for the very simple reason that every trade involves both one person or organisation selling the shares and another buying them - so every trade is both a buy and a sell! I'm guessing that you were using ADVFN's "Trades" facility. If you look at the small print below the trades list, you'll find it says "Trade definitions are based on the mid-price and are indicative only". Which translated means "we're guessing because the trade price was closer to the bid price than to the offer price that the seller was the one who actively pursued the trade, and the buyer was a market maker (or equivalent) who bought the seller's shares because taking the other side of the trade when someone actively wants to buy or sell is what market makers do". That guess is reasonable when the trade size is in the reasonably normal range - though it's not certain to be correct even then (I know this because I have on occasion managed to buy at below the mid price and seen my trade come up on ADVFN marked as a sell - not often, but it does happen). But for exceptionally big trades, such guesses are very unreliable, because exceptionally big trades basically always have a good deal of 'working', negotiating, etc, behind them - i.e. they're practically never done on the simple "one party actively pursued the trade and the other was a market maker (or equivalent) doing routine business as usual" model such guesses assume. Gengulphus
sphere25: Price is shifting. It is all about whether it can crack that recent high just above 51p to maintain this uptrend. I guess we are taking the RNS today as nothing untoward from a trading viewpoint or they would have surely said something rather than just stating the results are on the 21st April. Noted Canaccord in a few of the ones I have been involved with e.g. NXR and RFX where they have been lobbing too cheap. They appear to sell some at a price point and then move from the offer and sell some more at higher price points, as and how the demand comes in rather than staying static at one price point to lob the lot like some large sellers do. They have clearly given alot of NXR away cheap and the same might soon be said about RFX. PEN looks alot riskier but it strikes you that Canaccord appear to buy enormous stakes, almost too many in some of these small caps and are now re-assessing the risk of such overly long positions and scaling back at depressed valuations. It looks like they have spooked holders of DUKE today by beginning to lob there. Similar thing with an oversized position and selling well off pre-covid highs. All imo DYOR
nywb: Thanks for the feedback Gary. The odd thing is there were no visible trades around the time of the worked sell. But the price jumped by 2.5p. So if this is a worked sell I guess when it does come through the price will plummet, considering the huge volume sold ?!
gary1966: Worked sell probably and would only be reported when completed and explain why the price has been static for ages. Now the ready supply of shares have been moved on it comes back to more immediate supply/demand which is why the price probably rose today.
tole: This was the ST comment from mid late february.. before of course the coronovirus effect. 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.
hastings: Had the chance to read Mr Thompson's lengthy piece and very good it is too. My more modest offering may also be of some interest to others. I have also popped a link to my previous piece earlier in the year. Pennant International delivered some very positive interim results earlier this week which set the defence/aerospace focused company well on course to meet the full year guidance.  Once more I have been fortunate enough to catch up with CEO Phil Walker for a few words who was able to expand on some of the highlights for the company along with expectations going forward.  The numbers reported painted a positive picture, as revenue jumped 38% to £13.2m which in turn saw pre-tax profits up 125% to £2.1m resulting in fully diluted EPS of 5.62p.  Walker was understandably pleased with these interim results which have been achieved as the company embarked on a number of strategic changes. The CEO says that its recent expansion programme continues, which will soon see the company further its capacity resulting in a quadrupling of where it was at a few years back.  He also highlights the nature of further investment in personnel,  infrastructure and facilities, including major and senior operational appointments, along with the purchase of an additional freehold property.  The headcount Walker says is now up to 200, with 140 based in the UK whilst the remainder is split between Australia and Canada and the company is still actively recruiting.  Alongside some more sizeable business Pennant has also benefited from a number of smaller contracts which have been achieved in various areas of its expanded operations.  Milestone and final payments on contracts have also come through as expected, particularly from the Middle Eastern clients which has assisted in positive cash generation.  Looking ahead Walker sounds a confident note on prospects, particularly in relation to the two previously named potential contracts, one of which would be worth between £25-£30m to Pennant.  Although always difficult to pin point exactly, the CEO is hoping that confirmation on one or both of the these sizeable contracts will be concluded by the end of Q4, adding that just one of these would underpin the WH Ireland estimate for next year and provide for £21m in revenue and a pre-tax profit of £3.65m. But, given the strength of its pipeline and the obvious activity, it is conceivable that Pennant will win additional business too that could then pave the way for an upgrade on the current 2019 EPS of 10p.  Walker says that the climate remains positive particularly in Australia alongside the UK and although the Middle East spend has been dictated largely by the oil price performance, long term the region remains very positive.  The dilemma in all this that Pennant seemingly faces at the end of the current financial year is whether to reinstate a dividend or not, where WH Ireland has pencilled in a 2p full year payment.  Walker adds it should be interesting come that time, as the company is weighing up the balance of rewarding shareholders with a dividend or holding back its much improved cash position for working capital given the momentum that has been built and the opportunities that exist.  No doubt shareholders will be divided on this issue, but from this writers perspective I would rather the Pennant board hold back on the dividend to maximise its growth prospects that appear to be strong.  It is certainly a different business than when I first took a look and the recent strengthening of its board has clearly further assisted, such as the appointment of a new FD and the drafting in of John Ponsonby (previously MD Leonardo Helicopters UK) as a non exec.  Pennant as I have also penned before is a very much respected player in the industry which although niche, operates in areas where there is an extremely high barrier to entry, particularly regarding its safety and training systems. Rail is also providing an additional boost for the company where although having been active in the sector for twenty years and built up a good pedigree, recent work for Network Rail and openings on H2 suggests there is scope for growth.  And on growth, Pennant has achieved this through organic means, despite the company being open to making future acquisitions if they are the right fit.  WH Ireland has today upped its fair value of the company moving to £1.45p from £1.37p although does add that it sees a significantly greater value opportunity assuming contract conversions.  Although nothing can of course be taken for granted, Walker and his team sound bullish enough on prospects and it would appear to be purely a matter of timing before it can confirm one or both of the recently referred to contracts, which would most likely provide for another lift in the share price.  To recap, these relate to the Middle East- “Letter of Intent” announced earlier in the year, and the provisional “Down-Selection” on a major programme from August. Both of these potential contracts would more than double Pennant's 3-year order book from £31m as noted 06/18, to around £70m, which would open the door to longer-term forecasts and the possible upgrades.  The shares currently stand on a forward PER of 12 at today's price of £1.20p which doesn't look expensive if you believe the business will come through as expected. There is of course an execution risk, which obviously has to be taken on board and that may deter some from buying in at current levels, whilst those sitting on a decent profit may wish to install a stop, should the price begin to drift.  That said, the team have a busy few days in the City doing the rounds where it appears the company is enjoying plenty of support for its recent strategy for growth.  The balance sheet is looking as good as it has in a long time, with no debt and net cash expected to come out at £3.1m rising to £4.5m next year.  Key customers are blue chip players such as BAE Systems, Lockheed, General Dynamics amongst others such as HMRC and ADO (Australian Defence Organisation).    Https://
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