Half Yearly Report

RNS Number : 0069R
Pennant International Group PLC
08 September 2014
 



 

 

8 September 2014

 

Pennant International Group plc

Interim Results for the six months ended 30 June 2014

A good half-year performance producing strong cash generation and increased margins;

 

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, announce Interim Results for the six months ended 30 June 2014.

 

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

"I am pleased to report another period of good profits and cash flow and an increase in the interim dividend declared. During the period all trading divisions were profitable, a number of tenders for significant packages of work were submitted and solid progress was made on all of our existing major contracts"

 

Highlights: Financial

 

·     Group revenues for the period of £9.6million (2013: £9.8million);

·     Profit before tax of £1.18million (2013: £1.14million);

·     Profit for the period attributable to shareholders of £0.91million (2013: £0.87million);

·     Basic earnings per share of 3.47p (2013: 3.31p);

·     Cash generated from operations of £1.4million (2013: £0.55million expended)

·     Net cash at period end of £1.9million (2013: £1.2million); Nil borrowings;

·     Interim dividend declared of 0.9p per share (2013: 0.8p)

 

Highlights: Operational

 

·     New contract with value of approx £1.3million for supply of ab-initio training aids to Oman Military Training College;

·     Successful delivery and installation of two maintenance trainers for AW159 Wildcat under contract with Agusta Westland;

·     Good progress towards renewal of contract with Canadian Department of National Defence for OmegaPS software suite with potential value of CAD 20million over 5 years; 

·     Continuing work on major contract with BAE Systems Australia Limited to supply and support a suite of training aids for Australian Defence Force;

 

On current trading and prospects, Mr. Powell added:

"The pipeline is active and there has been significant on-going dialogue with a broad spread of potential customers on a number of significant opportunities, particularly in the defence and rail sectors. The Group's good customer relationships and strong balance sheet provide a firm position from which to continue to build and realise opportunities as they arise."

 

 

 

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 2014

 

Chairman's Statement

I am pleased to report another period of good profits and cash flow and an increase in the interim dividend.

During the period all trading divisions were profitable, we submitted a number of tenders for significant packages of work and made solid progress on all our existing major contracts.

Results and dividend

Revenues for the period were £9.6 million (Interim 2013: £9.8m). Operating margins improved to 12.35% (interim 2013: 11.6%) giving operating profits of £1.18 million (Interim 2013: £1.14 million). Profit for the period after tax was £914,277 (Interim 2013: £874,049). Basic earnings per share rose to 3.47p (Interim 2013: 3.31p).

Cash generated from operations was £1.4 million (Interim 2013: cash used £0.55 million). The cash balance at the end of the period was £1.9 million (Interim 2013: £ 1.2 million).

Your Board is declaring a 12.5% increase in the interim dividend to 0.9p per share (Interim 2013:  0.8p) .The interim dividend will be paid on 3 October 2014 to shareholders on the register at close of business on 19 September 2014. The ex- dividend date is expected to be 17  September 2014.

Highlights

·     A new contract with a value of approximately £1.3 million for the supply of ab -initio training aids to the Oman Military Training College.

·     Successful delivery and installation of two maintenance trainers for the AW159 Wildcat helicopter under a contract with Agusta Westland. Negotiation is at an advanced stage for an additional contract with a value of £1.7 million to update the trainers to the latest specification of the helicopter.

·     Positive progress towards the renewal of the contract with the Canadian Department of National Defence (DND) to maximise the use of Pennant's OmegaPS suite of software within the DND to manage the through-life costs of complex assets. The existing contract has been extended while negotiations continue. The new contract is expected to have a potential value of approximately CAD 20 million over 5 years.

·     Continued successful progress on the major contract with BAE Systems Australia Limited to supply and support a suite of training aids for the Australian Defence Force. During the period the focus has been on in-country support, delivery of media for inclusion in computer aided instruction modules, and the manufacture of two Generic Flying Controls Trainers (Genfly) and two Integrated Avionics Maintenance Trainers for delivery in 2015.

·     Sales of new licences for the use of the Group's Integrated Logistic Support Software product, OmegaPS, to a number of customers world-wide.

 

 

Outlook 

The pipeline is active and there has been significant on-going dialogue with a broad spread of potential customers on a number of significant opportunities particularly in the defence and rail sectors. While the timing of these opportunities is generally outside our control, the Group's good relationships with its customers and its strong balance sheet provide a firm position from which to build and realise the opportunities as they arise.

 

  

C C Powell
Chairman

 

  

 

PENNANT INTERNATIONAL GROUP plc

CONSOLIDATED INCOME STATEMENT for the six months ended 30 June 2014

 


Notes

Six months ended 30 June 2014

Six months ended 30 June 2013

Year ended 31 December 2013



Unaudited

Unaudited

Audited



£

£

£

Revenue


9,574,431

9,827,811

18,676,969

Cost of sales


(6,076,492)

(6,532,155)

(12,226,023)

Gross profit


3,497,939

3,295,656

6,450,946






Administrative expenses


(2,315,806)

(2,152,635)

(4,195,236)

Operating profit


1,182,133

1,143,021

2,255,710






Finance costs


(5,922)

(5,181)

(11,733)

Finance income


2,066

2,209

2,651

Profit before taxation


1,178,277

1,140,049

2,246,628






Taxation

2

(264,000)

(266,000)

(550,830)

Profit for the period


914,277

874,049

1,695,798






Earnings per share

3




Basic


3.47p

3.31p

6.43p

Diluted


3.41p

3.27p

6.33p

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 June 2014

 



Six months ended 30 June 2014

Six months ended 30 June 2013

Year ended 31 December 2013



Unaudited

Unaudited

Audited



£

£

£

Profit attributable to equity holders of the parent


 

914,277

 

874,049

 

1,695,798

Other comprehensive income:





Exchange differences on translation of foreign operations


 

 

(22,947)

 

 

1,251

 

 

(189,217)

Comprehensive income attributable to equity holders of the parent


 

 

891,330

 

 

875,300

 

 

1,506,581



PENNANT INTERNATIONAL GROUP plc

CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2014

 


30 June 2014

30 June 2013

31 December 2013


Unaudited

Unaudited

Audited


£

£

£

Non-current assets




Goodwill

952,315

970,735

946,749

Other intangible assets

127,289

93,087

128.174

Property plant and equipment

1,926,365

1,831,311

1,910,187

Available-for-sale investments

3,700

3,700

3,700

Deferred tax asset

34,186

36,392

33,490

Total non-current assets

3,043,855

2,935,225

3,022,300





Current assets




Inventories

4,000

13,340

4,000

Trade and other receivables

5,251,638

5,797,189

5,750,546

Cash and cash equivalents

1,886,979

1,171,500

1,156,950

Total current assets

7,142,617

6,982,029

6,911,496





Total assets

10,186,472

9,917,254

9,933,796





Current liabilities




Trade and other payables

2,794,846

3,013,127

3,010,744

Current tax liabilities

302,467

593,652

243,930

Obligations under finance leases

6,548

4,418

8,171

Deferred revenue

282,418

319,236

326,116

Total current liabilities

3,386,279

3,930,433

3,588,961





Net current assets

3,756,338

3,051,596

3,322,535





Non current liabilities




Obligations under finance leases

37,069

47,567

36,229

Deferred revenue

-

5,470

-

Deferred tax liabilities

126,854

110,340

121,866

Total non-current liabilities

163,923

163,377

158,095





Total liabilities

3,550,202

4,093,810

3,747,056





Net assets

6,636,270

5,823,444

6,186,740





Equity




Share capital

1,401,400

1,400,000

1,400,000

Share premium

5,600

-

-

Capital redemption reserve

200,000

200,000

200,000

Treasury shares

(459,288)

(390,382)

(459,288)

Retained earnings

5,363,114

4,274,967

4,897,637

Translation reserve

125,444

338,859

148,391

Total equity

6,636,270

5,823,444

6,186,740

 



 

PENNANT INTERNATIONAL GROUP plc

CONSOLIDATED STATEMENT OF CASH FLOWS for the six months ended 30 June 2014

 

 


Notes

Six months ended 30 June 2014

Six months ended 30 June 2013

Year ended 31 December 2013



Unaudited

Unaudited

Audited



£

£

£

Net cash generated from/(used in) operating activities

4

 

1,411,072

 

(549,950)

 

165,319






Investing activities





Interest received


2,066

2,209

2,651

Proceeds of sale of property, plant and equipment


-

1,000

1,000

Purchase of intangible assets


(41,271)

(22,310)

(94,603)

Purchase of property plant and equipment


(144,388)

(108,253)

(298,089)

Net cash used in investing activities


(183,593)

(127,354)

(389,041)






Financing activities





Proceeds from issue of 'B' shares


7,000

-

-

Dividends paid


(473,800)

(369,797)

(581,110)

Purchase of own shares for treasury


-

-

(68,906)

Proceeds of sale of treasury shares


-

4,125

4,125

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


(783)

22,782

15,197

Net cash used in financing activities


(467,583)

(342,890)

(630,694)






Net increase/(decrease) in cash and cash equivalents


 

759,896

 

(1,020,194)

 

(854,416)






Cash and cash equivalents at beginning of period


1,156,950

2,173,237

2,173,237

Effect of foreign exchange rates


(29,867)

18,457

(161,871)

 

Cash and cash equivalents at end of period


 

1,886,979

 

1,171,500

 

1,156,950

 


PENNANT INTERNATIONAL GROUP plc

STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2014

 


Share capital

Share premium

Capital

redemption

reserve

Treasury shares

Retained earnings

Translation reserve

Total equity


£

£

£

£

£

£

£

At 1 January 2013

1,400,000

-

200,000

(402,690)

3,771,398

337,608

5,306,316

Total comprehensive income for the year

-

-

-

-

1,695,798

(189,217)

1,506,581

Recognition of share based payment

-

-

-

-

19,734

-

19,734

Purchase of own shares for treasury

-

-

-

(68,906)

-

-

(68,906)

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

-

-

-

-

(581,110)

-

(581,110)

At 31 December 2013

1,400,000

-

200,000

(459,288)

4,897,637

148,391

6,186,740

Issue of 'B' shares

1,400

5,600

-

-

-

-

7,000

Total comprehensive income for the half year

-

-

-

-

914,277

(22,947)

891,330

Recognition of share based payment

-

-

-

-

25,000

-

25,000

Dividends paid

-

-

-

-

(473,800)

-

(473,800)

At 30 June 2014

1,401,400

5,600

200,000

(459,288)

5,363,114

125,444

6,636,270

 


PENNANT INTERNATIONAL GROUP plc

NOTES TO THE FINANCIAL INFORMATION for the six months ended 30 June 2014

 

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 2014. These are anticipated to be consistent with those applied in the Group's latest annual audited financial statements for the year ended 31 December 2013. 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 2013 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 2014.

 

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 2014

Six months ended 30 June 2013

Year ended 31 December 2013


£

£

£

Earnings




Net profit attributable to equity shareholders

 

914,277

 

874,049

 

1,695,798





Number of shares

Number

Number

Number

Weighted average number of ordinary shares

 

26,322,261

 

26,389,136

 

26,382,834

Diluting effect of share options

488,956

316,443

391,185

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

 

 

26,811,217

 

 

26,705,579

 

 

26,774,019



 

4.  Cash generated from operations

 


Six months ended 30 June 2014

Six months ended 30 June 2013

Year ended 31 December 2013


£

£

£

Profit for the period

914,277

874,049

1,695,798

Finance income

(2,066)

(2,209)

(2,651)

Finance costs

5,922

5,181

11,733

Income tax expense

264,000

266,000

550,830

Depreciation of property, plant and equipment

129,131

96,399

206,098

Amortisation of other intangible assets

41,881

34,345

71,269

Profit on disposal of property, plant and equipment

-

(435)

(435)

Share-based payment

25,000

7,500

19,734

Operating cash flows before movement in working capital

1,378,145

1,280,830

2,552,376





Decrease/(increase) in receivables

498,908

(1,878,452)

(1,831,809)

Decrease in inventories

-

-

9,340

(Decrease)/increase in payables

(215,898)

137,437

135,054

Decrease in deferred revenue

(43,698)

(28,561)

(27,151)

Cash generated from/(used in) operations

 

1,617,457

 

(488,746)

 

837,810





Tax paid

(200,463)

(56,023)

(660,758)

Interest paid

(5,922)

(5,181)

(11,733)

Net cash generated from/(used in) operations

 

1,411,072

 

(549,950)

 

165,319

 

 

 

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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