Interim Results

PENNANT INTERNATIONAL PLC
8 September 1999


PROFITS TAKE OFF FOR HIGH FLYING PENNANT INTERNATIONAL
                              
Pennant International Group, the AIM listed leading
supplier of sophisticated training systems for the
worldwide defence industry announces excellent
Interim Results for the six months ending 30th June 1999.
           
'I am pleased to report an increase of 54% in 'like for
like' operating profit for  the six months ended 30 June
1999 over the corresponding period in  1998. The  Group is
enjoying a heavy workload and this, coupled with the high
level of  enquiries  and  the significant tender activity,
is a  reflection  of  the active market place in which the
Group operates.  This and the existing  order book makes
your Board confident of continuing progress in the future.'

C.C. POWELL, Chairman.

HIGHLIGHTS

Operating Profit Up 54% at £507,000 (1998 £329,000)

Turnover Up 44% at £3,122,000 (1998 £2,171,000)

Earnings Per Share Up 47% at 5p (1998 3.4p excluding
exceptional)
    
Interim Dividend Up 17% at 1.4p (1998 1.2p)
    
Forward Order Book Up 50% at £6,000,000 (1998
£4,000,000)


CHAIRMAN'S STATEMENT

In  my first Annual Report, published earlier this year, I
indicated that  the achievements  of  1998 had created 'a
firm base for 1999 and  a  platform  for future  growth'.
The results for the first half of the current year  together
with the tendering activity for new business confirm my
expectations.

RESULTS AND DIVIDENDS
I  am  pleased  to report an increase of 54% in 'like for like'  operating
profit  for  the six months ended  30  June  1999  over  the corresponding
period in 1998.  Profit on ordinary activities before taxation was £458,000
compared with £304,000 (excluding exceptional credit £55,000)  in 1998. 
Earnings per share were 5.0p (1998 3.40p excluding exceptional credit). Your
Board is recommending an interim dividend of 1.4p per share, to be  paid on 
8th November 1999 to shareholders on the register at close of business  on
15th October 1999.

CURRENT TRADING
The year started with a healthy forward order book, which has been maintained.
As  at  1st July the forward order book had an anticipated value of £6,000,000
(1998   £4,000,000), excluding the Ministry of Defence three-year post  design
services, spares and repair contracts.  During the first half the Ministry  of
Defence renewed these contracts for a further period of three years. In the 
same  period the novation agreement referred to in our  Annual Report was
executed, completing the transfer of Post Design Services contracts from
another UK defence contractor to Pennant International.

The major contract award announced at the end of 1998 for three Generic Flying
Trainers  for the Royal Air Force, known as GenFly and valued at approximately
£3,000,000, is in work and on schedule.  The Ministry of Defence has now added
a  fourth  GenFly to the contract, raising the overall value of  the  contract
close  to  £4,000,000.   All  four units are  destined  for  RAF  Cosford  and
deliveries start in 2000.  Three Electrical Power Supply Trainers  and other
training  products  ordered  by the Ministry of defence  in  late  1998  were
delivered  on  schedule. Work  on the Aerial Delivered  Land  Mine  Disposal
Training System is progressing well and deliveries start later this year.

Work  on British Aerospace Hawk Mk100 and Mk200 programmes continues with  the
second of two installations in South East Asia completed successfully and  two
Hawk  Mk115 cockpit  simulator structures delivered  to  CAE Electronics  of
Canada.  The second major contract with British Aerospace, for the Hawk  Mk127
training  system awarded  in 1998,  has undergone  further redefinition  of
requirement  increasing the value of the contract and extending the  schedule.
The initial installation for this system is scheduled for January 2000.

BUSINESS PROSPECTS
In  my 1998 Annual Report I noted that Pennant International had entered  into
an  agreement  with partners in Europe to tender for the Ground Training  Aids
contracts  for  the EF2000  Typhoon  programme.   The  consortium,  known  as
'Aeromentor'  and comprising Alenia Difesa of Italy, STN Atlas  Elektronik  of
Germany,  Indra  BDE  of  Spain  and Pennant International,  made  public  its
intentions  with a press launch in March 1999.  Since that date the consortium
has  been working on tenders for four Ground Training Aids contracts,  two  of
which  have been submitted and two of which are due for submission this month.
In parallel Pennant International has been involved in numerous other tenders,
varying  in  size  and with some tendered and awarded during the  first  half.
These tenders offer important prospects involving new customers, some of which
are in non-aerospace defence activities.

FACILITIES AND PERSONNEL
The  new  building  acquired in late 1998 is now subject to a  99-year  lease.
Fitting  out and occupation was completed in June 1999.  The extra  space  has
provided  room  for additional staff, for certain internal reorganisations  to
take  place  and for product and programme development activities  to  expand.
The   short  term  rented accommodation  was  vacated  and  rental  agreement
terminated  in  August 1999.  During September 1999 we plan to  complete  the
acquisition  of a further 4,300 square feet facility adjacent to the  building
acquired  in 1998.  Recruiting has proceeded to plan and it has been  possible
to attract the specialist skills required.

CONCLUSION
The  Group is enjoying a heavy workload and this, coupled with the high  level
of  enquiries  and  the significant tender activity, is a  reflection  of  the
active market place in which the Group operates.  This and the existing order
book makes your Board confident of continuing progress in the future.

C.C. Powell
Chairman
8th September 1999


For further information, contact:
Joe Thompson, Chief Executive, Pennant International plc: Tel: [phone]
Barrie Newton, Rowan Dartington:                          Tel: [phone]
Ken Rees, Winningtons:                                    Tel: [phone]
                                                       Mobile: [phone]


Consolidated Profit & Loss Account
                                       Six       Six         Year
                                    months    months        ended
                                     ended     ended     
                                   30 June   30 June   31 December
                                      1999      1998          1998 
                      Notes          £'000     £'000         £'000
                       

Turnover                              3122      2171          4973
                                   ________________________________

Operating Profit                       507       329           712

Exceptional item                         0        55             0
                                   ________________________________

Profit on ordinary                              
activities before interest             507       384           712
Interest                               -49       -25           -71
                                   ________________________________

Profit on ordinary                     
activities before taxation             458       359           641
Taxation                      2       -128       -91          -164
                                   ________________________________

Profit for the period                  330       268           477
Preference dividends                     0        -7            -7
                                   ________________________________

Profit attributable                    
to ordinary shareholders               330       261           470
Ordinary dividends
Special dividend                         0      -250          -250
prior to flotation
Ordinary dividend                      -92       -79          -237
                                    _______________________________

Amount transferred to reserves         238       -68           -17
                                    _______________________________


Earnings per ordinary share 3         5.00p     4.28p         7.41p
Earnings per ordinary share           5.00p     3.40p         6.55p
(excluding exceptional item)
Fully diluted earnings per            4.82p     4.10p         7.12p
ordinary share
Dividend per share                    1.40p     1.20p         3.60p

Summarised Consolidated Balance Sheet

                                        As at    As at        As at
                                      30 June  30 June   31December 
                                         1999     1998         1998
                                        £'000    £'000        £'000

Fixed assets                             2997     2049         2555
                                      _____________________________
Stock, work in progress and              2211     1729         1962
debtors
Creditors falling due within            -1326     -802        -1079
one year                              _____________________________
                                          885      927          883
Net bank balance                         -392       80         -232
Current instalments of borrowings        -219     -207         -242
                                      _____________________________

Net current assets                        274      800          409
                                      _____________________________

Total assets less current liabilities    3271     2849         2964


Future instalments of borrowings         -616     -403         -547
                                      ______________________________

                                         2655     2446         2417
Provisions for liabilities and charges      0        0            0
                                      ______________________________

                                         2655     2446         2417
                                      ______________________________


Called up share capital and share        2160     2160         2160
premium account
Reserves                                  495      286          257
                                      ______________________________

                                         2655     2446         2417
                                      ______________________________


Consolidated cash flow
                                 Six months   Six months         Year
                                      ended        ended        ended
                                    30 June      30 June  31 December 
                                       1999         1998         1998
                                      £'000        £'000        £'000

Cash flow from operating activities     592         -506          -80
Returns on investment and               -49          -32          -78
servicing of finance
Taxation                                  0          -98         -253
Capital expenditure and                -437         -120         -435
investing activities             _____________________________________

                                        106         -756         -846
                                 _____________________________________

Equity dividends paid                  -158         -273         -352
Financing
Issue of ordinary share capital           0         1000         1000
Expenses of issue of ordinary             0         -241         -241
share capital
Other financing                        -108          -82         -224
                                 _____________________________________

Decrease in net cash                   -160         -352         -663
                                 _____________________________________

Reconciliation of net cash flow to
movement in net debt
Decrease in net cash                   -160         -352         -663
Cash to repurchase debt                 108           83          223
New hire purchase contracts             -46          -61         -135
New loans                              -108            0         -246
                                 _____________________________________

Movement in net                        -206         -330         -821
debt in period

Net debt at beginning                 -1021         -200         -200
period
Net debt at end of period             -1227         -530        -1021
                                 _____________________________________


Reconciliation of operating profit
to cash flow from operating activities

Operating profit                        507          329          712
Exceptional item                          0           55            0
Depreciation                            122          101          210
Amortisation of                          28           16           33
intangible assets
(Profit)/loss on                          0           -2            1
sale of fixed assets
Increase in stock,                     -249         -885        -1188
work in progress and debtors
Increase/(decrease) in creditors        184         -120          152
                                   ____________________________________

                                        592         -506          -80
                                   ____________________________________
                   

Notes:

1.  This interim statement, which is neither audited nor reviewed, has  been 
prepared on the basis of the accounting policies set out in the Group's 1998
annual report and financial statements.  The balance  sheet at 31 December
1998 and  the results for the year then ended  have been abridged from the
Group's annual report and financial  statements which has been filed with the
Registrar of  Companies:  the  auditor's  opinion on  the  financial 
statements  was  unqualified.
  
2. The taxation charge for the period is based on the estimated charge  for 
the full year.

3. The  calculation of earnings per share is based on the weighted  average 
number of shares in issue of 6,600,000 (1998 - 6,266,667) and the  profit
after taxation  of £330,000 (1998 - £268,000).  Fully diluted earnings  per 
share allow for the exercise of all outstanding options and are calculated on 
the profits after taxation of £330,000 (1998 - £268,000) and on 6,852,500
(1998  6,530,667) ordinary shares.
  
4. This announcement is being circulated to all shareholders of  the Company,
and copies will be available to the public at the  Company's Registered Office
at Pennant Court, Staverton Technology Park, Cheltenham GL51 6TL.