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24 Nov 2008 07:00
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For immediate release 24Β November 2008
PENNANT INTERNATIONAL GROUP PLC
TRADING UPDATE
Β
The Board of PennantΒ International Group Plc ('Pennant' or 'the Group'),Β 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 updateΒ for the year ending 31 December 2008.
TheΒ financial performance of the GroupΒ willΒ be adversely affected byΒ unforeseenΒ delays inΒ significant salesΒ (Β£240k)Β ofΒ software licences and updates,Β previously expected to fall as revenue in the last quarterΒ of this financial year. TheseΒ opportunitiesΒ are in respect of known customer requirementsΒ and areΒ now expected to be revenues for 2009.
LicenceΒ sales usually show as revenue withinΒ theΒ month of receipt of order and the relatedΒ costs are minimal.Β The loss of revenue will, therefore, beΒ directlyΒ reflectedΒ in the result forΒ 2008.Β
Pennant has the benefit ofΒ strongΒ ongoingΒ long-termΒ revenue streamsΒ 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 consultancyΒ services inΒ 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 planΒ at a cost of Β£150kΒ to reduceΒ annualisedΒ costsΒ by at least Β£350k inΒ 2009.Β It is anticipated that customers will,Β inevitably,Β be looking carefully at their spending and thisΒ mayΒ impact the flow of new ordersΒ and the outturn for 2009.
The delay in revenues from software sales and the cost ofΒ the rationalisation programme will bring the outcome for 2008 significantly below expectations. However,Β 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
WinningtonsΒ Financial
Paul Vann 0117 920 0092
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