Half Yearly Report

RNS Number : 8834K
Pennant International Group PLC
05 August 2013
 



 

 

5 August 2013

 

Pennant International Group plc

Interim Results for the six months ended 30 June 2013

Strong trading momentum maintained;

Earnings per share up 50%; Dividend up 33%;

 

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, is pleased to announce Interim Results for the six months ended 30 June 2013.

 

Commenting on the Group's performance, Chairman Christopher Powell said:

"I am pleased to report continuing growth and further improvement in the performance of the Group. The period has seen the achievement of both operational and strategic milestones that position us well for the medium and longer term."

 

Highlights: Financial

 

·     Group revenues increased by 38% to £9.8million (2012: £7.1million);

·     Profit before tax up 51% to £1.14million (2012: £0.75million);

·     Profit for the period attributable to shareholders of £0.87million (2012: £0.58million);

·     Basic earnings per share increased by 50% to 3.31p (2012: 2.21p);

·     Net cash at period end of £1.17million (2012: £2.07million); Nil borrowings;

·     Interim dividend increased by 33% to 0.8p per share (2012: 0.6p)

 

Highlights: Operational

 

·     Largest ever contract worth £16million over 5 years awarded during period by BAE Systems Australia Limited on behalf of Australian Defence Force; contract provides for further one year extensions up to 20 years;

·    Contract worth up to £5million over five years awarded for support of training aids at a number of UK Ministry of Defence establishments;

·    On schedule completion and delivery of first of two maintenance trainers for the AW 159 Wildcat helicopter under contract with Agusta Westland; value in excess of £12million;

·    Successful completion of critical design review for Virtual Reality Parachute Flight Simulator for delivery to Singapore Defence, Science and Technology Agency;

·    Growing consultancy revenues from Canadian Department of National Defence to maximize use of proprietary OmegaPS software suite;

 

On current trading and prospects, Mr. Powell added:

"The order book provides good visibility through 2014 and beyond. During the period there has been significant ongoing activity with a broad global spread of potential customers on a number of significant opportunities, particularly in the defence and rail sectors.

 

"The pipeline is robust and active and the Group's good relationships with its customers and strong balance sheet continue to provide a strong platform from which to build and to realize the opportunities arising."

 

 

Enquiries:

 

Pennant International Group plc                              Tel: 01452 714914            

Chris Snook, Chief Executive                                                                     

John Waller, Finance Director

www.pennantplc.co.uk

 

Winningtons Financial                                                  Tel: 0117 985 8989

Paul Vann/Tom Cooper                                                 Mob: 07768 807631

 

WH Ireland                                                                         Tel: 0117 945 3470

Mike Coe                                            



 

Pennant International Group plc

Interim Report for the six months ended 30 June 2013

 

Chairman's Statement

I am pleased to report continuing growth and further improvement in the performance of the Group. The period has seen the achievement of operational and strategic milestones that position the Group well for the medium and longer term.

Results and dividend

Revenues for the period at £ 9.8 million were 38% higher than for the same period in 2012 (Interim 2012:£7.1 million) and operating profit rose strongly to £1,143,021 (Interim 2012:£755,003) an increase of 51%. Basic earnings per share rose to 3.31p (Interim 2012:2.21p).

 Cash was used during the period mainly to fund the start of some major contracts. It is expected that this requirement for working capital will reduce during the second half as stage payments are received. The group has no borrowings.

Your Board is declaring a 33% increase in the interim dividend to 0.8p per share (Interim 2012:  0.6p) .The interim dividend will be paid on 25 October 2013 to shareholders on the register at close of business on 4 October 2013. The ex- dividend date is expected to be 2 October 2013.

Highlights

Major new contract awards:

·     A contract with a value of approximately £16 million awarded by BAE Systems Australia Limited under which Pennant will supply and support a suite of training aids that will be used to provide a leading-edge technical training capability to the Australian Defence Force. The training aids will be delivered during the first 2 years with support revenues running for the remainder of the term. The 5 year contract provides for one year extensions up to 20 years.

·     A contract with a potential value of £5 million running over up to 5 years for the support of training aids at a number of UK Ministry of Defence establishments.

·     A contract with a value of £1.3 million for the supply of a software-based training capability to an Indian customer.

·     The sale of licences for the use of the Group's Integrated Logistic Support Software product, OmegaPS, to Fleetway Inc. for use on the Canadian Arctic Operations Patrol Ship project.



 

Operational milestones achieved:

·     Successful on- schedule completion of factory acceptance and delivery of the first of two maintenance trainers for the AW159 Wildcat helicopter under a contract with Agusta Westland having a value in excess of £12 million. 

·     Successful completion of critical design review for a Virtual Reality Parachute Flight Simulator for delivery to the Singapore Defence, Science and Technology Agency.

·     Production and delivery of a suite of training aids under a contract with BAE Systems for supply to Saudi Arabia as part of the upgrade of their Technical Studies Institute.

·     Continued development under a Professional Services Agreement with Capgemini UK PLC of the next generation Basic PAYE Tools to support the introduction of Real Time Information into the PAYE process.

·     Growing consultancy revenues under an agreement with the Canadian Department of National Defence to maximise the use of OmegaPS in the Department.

 

Outlook

 The order book provides good visibility through 2014 and beyond and during the period there has been significant on-going activity with a broad global spread of potential customers on a number of significant opportunities particularly in the defence and rail sectors.

In the defence sector these requirements range from basic training aids for ab-initio students to complex platform specific simulators, computer based training and virtual reality. In the rail sector there are major new opportunities relating to the provision of documentation and training for operators and maintainers of rail assets.

The pipeline is robust and active and the Group's good relationships with its customers and its strong balance sheet continue to provide a firm position from which to build and realise the opportunities arising.

 

C C Powell

Chairman

2 August 2013

 



 

PENNANT INTERNATIONAL GROUP plc

CONSOLIDATED INCOME STATEMENT for the six months ended 30 June 2013

 


Notes

Six months ended 30 June 2013

Six months ended 30 June 2012

Year ended 31 December 2012



Unaudited

Unaudited

Audited



£

£

£

Revenue


9,827,811

7,099,457

14,469,715

Cost of sales


(6,532,155)

(4,458,912)

(8,952,086)

Gross profit


3,295,656

2,640,545

5,517,629






Administrative expenses


(2,152,635)

(1,885,542)

(3,920,782)

Operating profit


1,143,021

755,003

1,596,847






Finance costs


(5,181)

(1,031)

(3,832)

Finance income


2,209

1,056

9,950

Profit before taxation


1,140,049

755,028

1,602,965






Taxation

2

(266,000)

(172,000)

(428,649)

Profit for the period


874,049

583,028

1,174,316






Earnings per share

3




Basic


3.31p

2.21p

4.46p

Diluted


3.27p

2.18p

4.39p

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 June 2013

 



Six months ended 30 June 2013

Six months ended 30 June 2012

Year ended 31 December 2012



Unaudited

Unaudited

Audited



£

£

£

Profit attributable to equity holders of the parent


 

874,049

 

583,028

 

1,174,316

Other comprehensive income:





Exchange differences on translation of foreign operations


 

 

1,251

 

 

(10,936)

 

 

(49,910)

Comprehensive income attributable to equity holders of the parent


 

 

875,300

 

 

572,092

 

 

1,124,406



PENNANT INTERNATIONAL GROUP plc

CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2013

 


30 June 2013

30 June 2012

31 December 2012


Unaudited

Unaudited

Audited


£

£

£

Non-current assets




Goodwill

970,735

991,018

985,400

Other intangible assets

93,087

104,539

105,036

Property plant and equipment

1,831,311

1,782,213

1,821,559

Available-for-sale investments

3,700

3,700

3,700

Deferred tax asset

36,392

90,864

25,734

Total non-current assets

2,935,225

2,972,334

2,941,429





Current assets




Inventories

13,340

13,340

13,340

Trade and other receivables

5,797,189

4,055,574

3,918,737

Cash and cash equivalents

1,171,500

2,074,904

2,173,237

Total current assets

6,982,029

6,143,818

6,105,314





Total assets

9,917,254

9,116,152

9,046,743





Current liabilities




Trade and other payables

3,013,127

3,473,119

2,875,690

Current tax liabilities

593,652

178,898

374,927

Obligations under finance leases

4,418

13,201

4,726

Deferred revenue

319,236

321,560

341,016

Total current liabilities

3,930,433

3,986,778

3,596,359





Net current assets

3,051,596

2,157,040

2,508,955





Non current liabilities




Obligations under finance leases

47,567

-

24,477

Deferred revenue

5,470

19,786

12,251

Deferred tax liabilities

110,340

116,342

107,340

Total non-current liabilities

163,377

136,128

144,068





Total liabilities

4,093,810

4,122,906

3,740,427





Net assets

5,823,444

4,993,246

5,306,316





Equity




Share capital

1,400,000

1,400,000

1,400,000

Capital redemption reserve

200,000

200,000

200,000

Treasury shares

(390,382)

(351,341)

(402,690)

Retained earnings

4,274,967

3,368,005

3,771,398

Translation reserve

338,859

376,582

337,608

Total equity

5,823,444

4,993,246

5,306,316

 



 

PENNANT INTERNATIONAL GROUP plc

CONSOLIDATED STATEMENT OF CASH FLOWS for the six months ended 30 June 2013

 

 


Notes

Six months ended 30 June 2013

Six months ended 30 June 2012

Year ended 31 December 2012



Unaudited

Unaudited

Audited



£

£

£

Net cash generated from operating activities

4

(549,950)

280,392

795,409






Investing activities





Interest received


2,209

1,056

9,950

Proceeds of sale of property, plant and equipment


1,000

-

10,358

Purchase of intangible assets


(22,310)

(5,765)

(36,860)

Purchase of property plant and equipment


(108,253)

(72,352)

(215,446)

Net cash used in investing activities


(127,354)

(77,061)

(231,998)






Financing activities





Dividends paid


(369,797)

(264,224)

(422,353)

Purchase of own shares for treasury


-

(195,785)

(343,315)

Proceeds of sale of treasury shares


4,125

-

61,425

Net funds from/(repayment of) obligations under finance leases


22,782

(2,078)

13,924

Net cash used in financing activities


(342,890)

(462,087)

(690,319)






Net (decrease)/ increase in cash and cash equivalents


 

(1,020,194)

 

(258,756)

 

(126,908)






Cash and cash equivalents at beginning of period


2,173,237

2,343,105

2,343,105

Effect of foreign exchange rates


18,457

(9,445)

(42,960)

 

Cash and cash equivalents at end of period


 

1,171,500

 

2,074,904

 

2,173,237

 



PENNANT INTERNATIONAL GROUP plc

STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2013

 


Share capital

Capital

Redemption

reserve

Treasury shares

Retained earnings

Translation reserve

Total equity


£

£

£

£

£

£

At 1 January 2012

1,400,000

200,000

(191,214)

3,080,745

387,518

4,877,049

Total comprehensive income for the year

-

-

-

1,174,316

(49,910)

1,124,406

Recognition of share based payment

-

-

-

9,104

-

9,104

Purchase of own shares for treasury

-

-

(343,315)

-

-

(343,315)

Sale of treasury shares to satisfy share options

-

-

61,425

-

-

61,425

Loss on sale of treasury shares transferred to retained earnings

-

-

70,414

(70,414)

-

-

Dividends paid

-

-

-

(422,353)

-

(422,353)

At 31 December 2012

1,400,000

200,000

(402,690)

3,771,398

337,608

5,306,316

Total comprehensive income for the half year

-

-

-

874,049

1,251

875,300

Recognition of share based payment

-

-

-

7,500

-

7,500

Sale of treasury shares to satisfy share options

-

-

4,125

-

-

4,125

Loss on sale of treasury shares transferred to retained earnings

-

-

8,183

(8,183)

-

-

Dividends paid

-

-

-

(369,797)

-

(369,797)

At 30 June 2013

1,400,000

200,000

(390,382)

4,274,967

338,859

5,823,444

 

 



PENNANT INTERNATIONAL GROUP plc

NOTES TO THE FINANCIAL INFORMATION for the six months ended 30 June 2013

 

1.   Basis of preparation

 

This condensed set of financial statements has been prepared using accounting policies expected to be adopted for the year ending 31 December 2013. These are anticipated to be consistent with those applied in the Group's latest annual audited financial statements for the year ended 31 December 2012. These accounting policies are drawn up in accordance with International Accounting Standards and International Financial Reporting Standards as issued by the International Accounting Standards Board and adopted by the EU.

 

The comparative figures for the year ended 31 December 2012 set out in this Interim Report are not statutory accounts. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498 (2) or s498(3) of the Companies Act 2006.

 

AIM-listed companies are not required to comply with IAS34 'Interim Financial Reporting' and the company has taken advantage of this exemption.

 

2.  Taxation

 

The taxation charge for the period is based on the estimated rate of tax that is likely to be effective for the full year to 31 December 2013.

 

3. Earnings per share

 

Basic earnings per share are calculated by dividing the profit for the period attributable to the shareholders by the weighted average number of shares in issue. The calculation of diluted earnings per share takes into account the potentially diluting effect of share options.

 


Six months ended 30 June 2013

Six months ended 30 June 2012

Year ended 31 December 2012


£

£

£

Earnings




Net profit attributable to equity shareholders

 

874,049

 

583,028

 

1,174,316





Number of shares

Number

Number

Number

Weighted average number of ordinary shares

 

26,389,136

 

26,326,969

 

26,343,553

Diluting effect of share options

316,443

406,702

411,559

Weighted average number of ordinary shares for the purpose of dilutive earnings per share

 

 

26,705,579

 

 

26,733,671

 

 

26,755,112



 

4.  Cash generated from operations

 


Six months ended 30 June 2013

Six months ended 30 June 2012

Year ended 31 December 2012


£

£

£

Profit for the period

874,049

583,028

1,174,316

Finance income

(2,209)

(1,056)

(9,950)

Finance costs

5,181

1,031

3,832

Income tax expense

266,000

172,000

428,649

Depreciation of property, plant and equipment

96,399

81,103

172,197

Amortisation of other intangible assets

34,345

27,848

58,458

(Profit)/loss on disposal of property, plant and equipment

(435)

-

2,159

Share-based payment

7,500

4,114

9,104

Operating cash flows before movement in working capital

1,280,830

868,068

1,838,765





Increase in receivables

(1,878,452)

(1,252,794)

(1,115,957)

Increase in payables

137,437

715,647

118,218

Decrease in deferred revenue

(28,561)

(39,443)

(27,522)

Cash generated from operations

(488,746)

291,478

813,504





Tax paid

(56,023)

(10,055)

(14,263)

Interest paid

(5,181)

(1,031)

(3,832)

Net cash generated from operations

(549,950)

280,392

795,409

 

 

 

5.   Copies of this statement

Copies of this statement will be available on the Group's website (www.pennantplc.co.uk) and from Pennant International Group plc, Pennant Court, Staverton Technology Park, Cheltenham, GL51 6TL.

 


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