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Https://www.pennantplc.com/upcoming-exhibition-alert-for-april-may-2024/
See also the number of upcoming exhibition events. They must be fairly optimistic about GenS' prospects.
I noticed on LinkedIn that there has been a few promotions and (seemingly growth) positions adverted recently. This is a positive indication that the business is fairly optimistic.
Agreed we just need some good news come the end of the month for this to significantly rerate. I'd argue this is now a better business than it was 10 years ago when it was worth 90p.
Well, I hold a few ahead of results and mindful the company needs a new decent order or a few of them from somewhere to get it back to decent solid profitability and a dividend return. I keep watching the trades. If I see more buyers coming in then it's likely i'll add a few more. Confidence works wonders sometimes when looking to buy and the market always looks ahead.
This share is so illiquid. I've been watching this for years but am quite likely this price point and the direction the company is going in.
Going to take a punt.
The results will show a big turnaround. That is already known, but perhaps the market will get a reminder and price some optimism in? A little buying today ahead of results, will be interesting to see if that continues as we get nearer.
Techinvest had a nice review of the interims in their November issue FYI:
"Pennant has reported solid progress in the first half ended June 30. Revenue for the period was up 2.9% to £7.1m, with 46% of the total generated from software licensing and associated activities. Gross margin reached a record 47% (H1 2022: 41%). EBITDA doubled to £0.8m and the loss before tax was £0.4m compared to a loss of £0.8m a year earlier. Order intake secured during the first half was worth
£6.5m, which resulted in a three-year contracted order book of £25m at the period-end. Net-debt at the end of the first half was £1.9m, down from £4.1m a year earlier.
Management’s plan to re-engineer the business to build on software, services and
other higher-margin work is working well based on recent results. EBITA has been positive now for the last four reporting periods and the strong uptick in gross margin this time is particularly encouraging. Given the burgeoning technological complexity in Pennant’s military, aviation and rail platforms markets, the demand
for innovative integrated product support solutions is only likely to grow, particularly with increasing defence budgets globally.
Small acquisitions are also adding to the momentum and re-shaping of the business. The most recent addition is Track Access Productions in April, broadening Pennant’s existing rail offering and customer base, and adding circa £0.3m of subscription-based recurring revenues. Further positive news since the period-end is that new
orders worth around £1.5m have been secured during July and August. The company also announced a strategic partnership with Aquila Learning to collaborate on a number of projects.
The broker consensus forecast for the current year is for earnings per share of 3.5p rising to 4.2p for fiscal 2024. A prospective P/E of 6.1 for next year looks attractive if the progress in the business can be maintained. We rate the shares
a Strong Hold."
Write up for interest, following a catch up with Phil Walker.
https://martinflitton1.wixsite.com/privatepunter/post/pennant-on-track-21-10-23
BGF out? Someone's been buying 10k's all morning.
Seller most likely BGF which is not specific to PEN more its strategy. If so, they will only have around 300k left and obviously someone has taken the 325k today which is a positive for me, probably Chris Mills or Miton.
As for the debt, I've already said as per the company announcement just last week that it is on track to move into net cash by the year end.
I do agree though that a few more sizeable contracts would be useful, so hopefully one or two that PEN is bidding for will come through. It is also quite possible that the follow up relating to GD and the MOD will come PEN's way and on improved terms, given the companies knowledge and experience having already delivered on the first phase.
Well, it's reduced debt by selling shareholder assets and not from earnings. Yes it was surplus but still shareholder value has been depleted. A bit of a share price fall today.
If the forward PE's are to be trusted then maybe it's too early to be gloomy. Needs some significant order wins, still has nearly £2m debt as well.
Not so sure it is struggling, it has reduced debt sharply and and the net cash forecast position is maintained for the full year end, albeit less than previously pencilled in by the broker.
Exiting some of the bigger lumpy business is a calculated move which is why to date they have declined the General Dynamics follow on business.
Software now accounts for 46% of revenue with decent and improved margins along with a building ARR element.
Given the reaffirmed year end outlook the shares trade on a PE of 8, which falls to 7 next year, the latter looks doable given the forward picture, more recent contract wins and sectors it serves.
The property that was sold was surplus to requirements so it made sense to offload it and reduce the debt.
Struggling and in their overdraft by almost £2mill!!
Seems to me PEN is struggling for profitability. Recently sold off a building to pay off debt if I recall correctly. That's not a sign of a company doing ok to me.
I would say the SP value implies hope of some big orders to come in, though not sure there are any indications of such.
I've been out a while awaiting some news of order intake growth and not just hope.
Not sure i like this from my broker .
But Analysts expect the price to increase does not state how many on it.
Financial Summary
Last Modified: 12/05/2023
BRIEF: For the fiscal year ended 31 December 2022, Pennant International Group plc revenues decreased 14% to £13.7M. Net loss decreased 44% to £901K. Revenues reflect a decrease in demand for the Company's products and services due to unfavorable market conditions. Lower net loss reflects Other Net Financial Income/Expenses decrease of 21% to £153K (expense), Lease interest decrease of 26% to £55K (expense).
Simon T and all of them buy then tip , might even sell into rise then maybe buy back cheaper.
On 7/2/23 29p , 9/2/23 35p tip news 16/2/23 38p rising all the way to 27/2/23 topping at 41p
Now 36p fell to 35p on 9/6/23.
City types are shameless.
Continuing to head in the right direction here.
I was already in and went from a loss to a profit today, I figured it had been tipped so I sold and hope to buy back lower. If Simon Thompson is tipping it I'm not even sure I want back in as his tips have been pretty awful of late
in buying after you have missed the start of the tip rise. It may have more legs, but suspect it will be one of the many IC dogs.
IMO . Don't buy when tipped specially AIM listed. Sell and then buy back if one is luckey.
Yes, Simon T is the main man!
has this been tipped today please ?
PEN made £0.1mn in H1 and £0.4mn in H2
This is a slight beat of broker's expectations as laid out here:
For the second half of 2022, WH Ireland expects Pennant to deliver an underlying operating profit of £0.3mn on revenue of £7.1mn; the second half order book materially de-risks these estimates. On this basis, expect pre-tax profit of £0.2mn on revenue of £14mn for the 12-month period.
2023 expected revenue covered with order book already. Looking very good for a recovery.
Part 2 - from Sept 21
The group’s balance sheet is looking in better shape, too. Since the half-year end, the disposal of surplus property has raised £2.1mn, which halved net borrowings to £2mn, and net debt will be cut in half again to £1mn once recently issued invoices are settled within their 30-day payment terms. House broker WH Ireland expects Pennant to have net cash of £0.2mn at the end of 2022, thus allaying concerns that some investors may have about its financial position.
For the second half of 2022, WH Ireland expects Pennant to deliver an underlying operating profit of £0.3mn on revenue of £7.1mn; the second half order book materially de-risks these estimates. On this basis, expect pre-tax profit of £0.2mn on revenue of £14mn for the 12-month period.
Moreover, without the drag of the armoured vehicle contract next year – group gross margin would have been around 45 per cent in the latest six-month period without it – then WH Ireland sees a step change in 2023 profitability, predicting pre-tax profit of £1.2mn on revenue of £16.5mn. Pennant has the benefit of £6.7mn of historic tax losses, so forecast earnings per share (EPS) of 3.1p could accelerate sharply if the ongoing contract momentum is maintained and the group continues to win higher margin software contracts. The business has higher operational leverage, too, having terminated the lease on its Stevenage office, and management is planning to rationalise more properties to realign the cost base to requirements in the post Covid-19 world.
Admittedly, investors have yet to cotton onto the upturn in Pennant’s fortunes: the share price has underperformed the London junior market by nine per cent since the annual results (‘Poised for a profitable recovery’, 25 May 2022) and only trades on a 2023 price/earnings (PE) ratio of 9.5. However, there is solid earnings recovery story unfolding here, and one that should reward bottom fishers. Buy.
From Sept 22 - but still relevant
A below the radar recovery play
A supplier of products and services that train and assist engineers has returned to profit and a growing order book supports forecasts of material profit growth.
September 21, 2022
By Simon Thompson
Adjusted operating profit of £0.1mn reverses loss of £1mn in first half of 2021
Gross margin more than doubles to 41 per cent
Current net debt of £2mn set to be wiped out by year-end
Three-year order book worth £27mn
Pennant (PEN:29p), an Aim-traded supplier of products and services that train and assist engineers in the defence and civilian sectors, reported a small underlying operating profit in the first half of 2022 despite reporting a decline in revenue from £7.4mn to £6.9mn, a reflection of the shift to higher margin software activities and the wind down of an onerous loss-making legacy armoured vehicle contact with the MoD.
Since the start of the year, the group’s software and services business has grown its first half revenue by 40 per cent to £3.6mn, accounting for more than half of group revenue for the first time. This explains why two-thirds of revenue is now recurring in nature, thus removing the lumpiness of contracts that have dogged Pennant in the past.
In addition to offering two proprietary software product suites, OmegaPS (a sophisticated logistics data tool) and R4i (a dynamic technical documentation solution), the group provides repeat consultancy, support and maintenance services on both software suites to many customers, including the Canadian and Australian defence departments and their respective supply bases.
During the summer, Pennant booked £1mn of software and equipment upgrades, lifting the total order intake to £12mn during 2022. The closing three-year order book of £27mn includes £12.2mn of revenue for delivery in 2023, more than half of which is for software related activities. The directors note that the sales pipeline for this side of the business now exceeds £20mn, highlighting multiple opportunities in the United States, Canada and Australia.
Pennant’s technical training business line, focused on the design and build of generic and platform-specific training technologies, is showing momentum, too. Having landed a three-year contract worth £8.8mn to supply simulated training systems for the British Army’s new Apache AH-64E helicopter fleet, the directors note that defence procurement activity continues to increase this year, particularly in relation to new and upgraded vehicle platforms in the UK. In fact, chairman John Ponsonby says that in the “prevailing global security situation, we are seeing real signs that defence procurement programmes are unlocking in our key regions, with several new opportunities already being pursued.” This aligns well with Pennant's training systems engineering capabilities, and prospects to convert some of the £30mn contract opportunities in its sales pipeline.