Last checked at 24 Nov 2008 07:00
For immediate release 24 November 2008
PENNANT INTERNATIONAL GROUP PLC
TRADING UPDATE
The Board of Pennant International Group Plc ('Pennant' or 'the Group'), the AIM listed supplier of integrated logistic support solutions principally to the defence, rail, aerospace and naval markets, and products and services to a number of Government Departments, issues the following trading update for the year ending 31 December 2008.
The financial performance of the Group will be adversely affected by unforeseen delays in significant sales (£240k) of software licences and updates, previously expected to fall as revenue in the last quarter of this financial year. These opportunities are in respect of known customer requirements and are now expected to be revenues for 2009.
Licence sales usually show as revenue within the month of receipt of order and the related costs are minimal. The loss of revenue will, therefore, be directly reflected in the result for 2008.
Pennant has the benefit of strong ongoing long-term revenue streams that arise from:
Contracts with MOD and BAE Systems for the support of training systems previously supplied. These run through to at least 2011.
Maintenance contracts in respect of software sales.
Contracts for consultancy services in respect of the implementation and use of OmegaPS software by the Canadian DND.
However, in the light of the current economic outlook, the Board has also reviewed staffing levels and has implemented a rationalisation plan at a cost of £150k to reduce annualised costs by at least £350k in 2009. It is anticipated that customers will, inevitably, be looking carefully at their spending and this may impact the flow of new orders and the outturn for 2009.
The delay in revenues from software sales and the cost of the rationalisation programme will bring the outcome for 2008 significantly below expectations. However, Pennant's balance sheet at 31 December 2008 is expected to remain strong with no net debt.
For further information, please contact:
Pennant International Group plc
Chris Snook, Chief Executive Officer 01452 714914
John Waller, Group Finance Director 01452 714914
Winningtons Financial
Paul Vann 0117 920 0092