Interim Results

Pennant International Group PLC
28 September 2001

                       PENNANT INTERNATIONAL GROUP PLC
                      ANNOUNCEMENT OF INTERIM RESULTS

CHAIRMAN'S STATEMENT

Two significant features have adversely affected the first half results.  The
first is on-going delays in anticipated contract awards in Software Services
and Training Systems, estimated to have cost a £475,000 contribution in the
period.  The second is the delayed completion and delivery of a major Training
Systems contract, which has caused significant additional costs, including
late delivery charges from the customer. This has led to the need for
recognition of losses of £500,000 to cover the period to full acceptance of
all deliverables.

RESULTS AND DIVIDEND

The Group loss on ordinary activities before taxation for the six months ended
30 June 2001 was £1,328,000 (2000 profit £29,000). In the light of this result
your Board considers it inappropriate for an interim dividend to be paid. Any
final dividend will be considered in the light of current trading at the time.

The delay in the major Training Systems contract, described above, has held up
receipt of cash of £1,100,000, which is now expected before the year-end.  In
consequence net debt has increased by £530,000 in the first half to a figure
of £3,310,000. Your Board has addressed this matter and satisfactory revised
facilities have been agreed with the Group's bankers.

Whilst there have been delays in contract awards and invitations to tender;
the Group businesses, by their integrated product potential, co-ordinated
efforts and partnership initiatives, have been developing relationships with
major prime contractors that offer new business opportunities.  Software
Services launched two new products in the period, OmegaPS'Publisher', which
takes data from OmegaPS to create technical publications, and
OmegaPS'Analyzer', to develop and assess maintenance plans.  Initial clients
for both products have been identified.  Data Services has extended its
capability through the company's relationship with XyEnterprise and their '
Content@' product. Content@, a content data management system, is an integral
element of OmegaPS'Publisher' and in future it will be used by Data Services
both as an in-house operational tool and in data solutions offered to
customers.  In addition, discussions are underway to establish a partnership
agreement with another specialist UK company for network portal technology to
further enhance Data Services' ability to provide solutions in this rapidly
developing environment.

Training Systems have also been active and entered into three major new
agreements.  The company has joined with Corus Rail Consultancy to pursue
opportunities for rail training systems and the first joint tender was
submitted in September 2001.  The Company is in the process of finalising a
Memorandum of Understanding with Atlantis Systems Corporation (a North
American training and simulation company, traded on the Toronto Stock
Exchange, under the symbol 'AIQ'), which will allow both companies to promote
collaborative technology development and the joint production and marketing of
products and services to the military and aerospace training and maintenance
industries. This proposed strategic alliance is designed to improve the
operational productivities of both entities, while enhancing their global
reach and the success of future associated marketing endeavours. Finally, The
Company is a member of the FORUM training consortium, led by TUV Product
Service, tendering to the Ministry of Defence for significant PPP contracts.

CURRENT TRADING AND PROSPECTS

Overall sales enquiries are good, but the awarding of contracts remains slow,
particularly the larger contracts tendered by Training Systems.  Furthermore,
a number of invitations to tender for new business across the Group, which
have been intimated by our customers, are still awaited.  Nevertheless, the
pattern is not consistent across the businesses and all market segments.

Training Systems.  The delay in completing a major contract has had the
biggest impact on this business but the problem has been addressed and a
revised schedule put into operation.  This has also led to significant senior
management changes.  In addition and due to contract award delays there has
been a 15% reduction in staff numbers.  Key activities include:

*          Post Design Services work for the Ministry of Defence continues to
be a significant activity with major update work on the Tucano Cockpit
Procedures Trainers, Weapons Loading Trainer and the Second Line Avionics
Trainer.

*          The first two Generic Flying Controls Trainers have been delivered,
site system demonstration has been completed successfully on these units and
delivery of the final two units and contract completion is expected by the
year-end.  Potential overseas clients are still showing keen interest and a
follow-on sale for a 2002 programme remains a strong possibility for this
fully developed product.

*          The Royal Australian Air Force Lead-In Fighter Computer Based
Training and Virtual Aircraft Training System is in the final stages of
completion and customer acceptance.  Meanwhile the in-service support team,
located with BAE SYSTEMS at RAAF Williamtown, is in place and operational.

*          The Training Management Information System for the E-3D Sentry
Aircrew Training Service has completed final acceptance and is now operational
with Quest Flight Training Limited on their PFI contract at RAF Waddington.

*          The Lynx Mk 7/9 helicopter Cockpit Procedures Trainer, under
contract to Thales Training & Simulation, has increased in scope and value and
is progressing on schedule.

*          Thales Training & Simulation has recently ordered a Training
Management Information Systems for their Tornado GR4 PFI programme and work on
it is underway.

*          Further CBT work has been undertaken for communications network and
US military bridging courseware.

*          The company has been selected as preferred supplier for a
Mechanical Maintenance and Weapons Trainer in support of an overseas
helicopter sale. The programme has a significant value and work is due to
start later this year for delivery in 2003.

Software Services.  Software sales in the UK and Europe together with the USA,
during the period, were lower than expected, principally due to a slow-down in
major defence programmes.  Some forecast and delayed first half orders are now
expected in the second half.  Nevertheless, all major software maintenance
contracts, in all geographical regions, have been renewed and a number of
existing users have been upgrading their systems and procuring product
training courses.

*          In the UK, BAE SYSTEMS has significantly increased the number of
OmegaPS licences on a major aircraft programme.

*          In the USA, Northrop Grumman Baltimore invested in OmegaPS for
their part in the Royal Australian Air Force Wedgetail Airborne Early Warning
aircraft programme.  In July, Boeing Seattle procured OmegaPS for the same
programme.  Other OmegaPS sales, linked to the Wedgetail programme, can be
expected.

*          Also in the USA, a maintenance and support contract has been signed
with Boeing, initially for one year with a 2 year renewal option, for their
C17 Globemaster Transport Plane produced in Long Beach, California. OmegaPS
lies at the heart of the Boeing C17 Product Support Management System, and
this contract is an important stage in the development of Pennant's
relationship with Boeing.

*          In Canada, development work on the major Department of National
Defence programme continues and overall involvement on this programme has
extended into Integrated Logistic Support Consultancy with a consequent
increase in manpower and revenue.

*          As stated in the Annual Report, Pennant was selected, in March, by
the Australian Defence Force for a major software upgrade programme and has
been working subsequently to develop a detailed specification of requirement.
This work is virtually complete and is expected to lead to a contract award
later this year.  The scope of the programme has extended beyond the
Web-enabled OmegaPSi product and is anticipated to include OmegaPS'Publisher'
and OmegaPS'Analyzer', together with customisation and interfaces with other
operating systems.  In preparation for programme launch staff recruitment in
Australia and training in the UK has been implemented.

Data Services.   This business continues to trade profitably albeit at a
slightly lower turnover than originally anticipated.

*          During the period, there has been a continued drawdown on enabling
contracts with various branches of the Ministry of Defence, major defence
contractors and major prime contractors in the rail transport, oil and gas,
telecommunications and power industries.  It is encouraging that a significant
number of these enabling contracts continue to be extended in time, scope and
overall value.

*          In the aerospace industry, the successful relationship with EADS
has continued to develop with growth in activities under the framework
agreement for technical documentation work on Airbus programmes.  The second
phase of a major contract awarded by Alenia Marconi has also been completed in
the period.

*          In rail transport, work has continued on international rail
projects technical publications and training media under contract from Alstom
on programmes in the USA, the Far East and Europe.

*          A first half tender for a CBT courseware contract has recently been
awarded by Alenia Marconi Systems.  The CBT courseware will be produced in
Data Services' Manchester facility with some work sub-contracted to Pennant
Training Systems in Cheltenham.  The CBT is for part of a sophisticated
electronic warfare trainer and is for use by the Royal Netherlands Navy.

CONCLUSION

Notwithstanding the difficulties reported above, this has been a period of
intense activity in the Group with new products launched, new relationships
founded and new business opportunities identified.  As a Group, we have a
first class range of products and services backed up by excellent technology.
We are well positioned in several industries and our companies are staffed by
highly skilled and dedicated individuals.  The delayed contract awards,
particularly some of the larger contracts in Training Systems, appear to be
moving closer and it is expected that a number will come to contract in the
near future.  If these materialise as expected the Group should return to
profitability on a monthly basis towards the end of the year.

SUMMARISED CONSOLIDATED BALANCE SHEET
                                                  As at      As at      As at
                                                30 June    30 June     31 Dec
                                                   2001       2000       2000
                                                  £'000      £'000      £'000

Intangible assets                                 1,778        984      1,676
Tangible assets                                   2,780      3,041      2,892
Investments                                           6          6          6
                                                  4,564      4,031      4,574

Work in progress and debtors                       5328       5272       6331
Creditors falling due within one year           (2,776)    (2,915)    (3,044)
                                                  2,552      2,357      3,287
Net bank balance                                (1,216)       1052      (632)
Current instalments of borrowings               (1,620)    (1,687)    (1,656)

Net current assets/(liabilities)                  (284)      1,722        999

Total assets less current liabilities             4,280      5,753      5,573


Future instalments of borrowings                  (474)      (572)      (492)
Creditors falling due after one year                  0          0       (15)
                                                  3,806      5,181      5,066
Provisions for liabilities and charges                0          0          0
                                                  3,806      5,181      5,066

Called up share capital and share premium         4,614      4,625      4,614
account
Reserves                                          (808)        556        452
                                                  3,806      5,181      5,066



CONSOLIDATED PROFIT AND LOSS ACCOUNT


                                   Notes       Six        Six      Six     Year
                                            months     months   months    ended
                                             ended      ended    ended   31 Dec
                                           30 June    30 June  30 June    2000
                                              2001       2001     2000    £'000
                                             £'000      £'000    £'000
                                                            
Turnover
Continuing operations                        5,280               7,501   14,194
Acquisitions                         2           5                   0        0
                                                        5,285    7,501   14,194

Operating Profit
Continuing operations                      (1,205)                 486      911
Acquisitions                         2        (12)                   0        0
                                                      (1,217)      486      911

Exceptional item                                            0    (334)    (481)
Profit on ordinary activities
before interest                                       (1,217)      152      430
Interest                                                (111)    (123)    (198)
Profit on ordinary activities
before taxation                                       (1,328)       29      232
Taxation                             3                     75        0     (57)
Profit attributable to ordinary
shareholders                                          (1,253)       29      175
Ordinary dividends                                          0    (112)    (337)
Amount transferred to/(from)
reserves                                              (1,253)     (83)    (162)
                                                      
Earnings per share                   4

Basic                                                (15.59p)    0.39p    2.25p
Diluted                                              (14.92p)    0.37p    2.15p

Statement of Total Recognised
Gains and Losses

(Loss)/profit for the period                          (1,253)       29      175
Currency translation differences
on foreign currency net
investments                                               (7)        0     (24)
                                                          
                                                      (1,260)       29      151


CONSOLIDATED CASH FLOW

                                                 Six months   Six          Year
                                                      ended   months      ended
                                                    30 June     ended    31 Dec
                                                       2001   30 June      2000
                                                      £'000      2000     £'000
                                                                £'000

Cash flow from operating activities                     138     (161)     (485)
Returns on investment and servicing of finance        (111)     (123)     (199)
Taxation                                                  0         0     (249)
Capital expenditure                                   (115)     (156)     (956)
Acquisitions                                          (219)         0         0
Equity dividends                                      (223)     (195)     (307)
Cash Outflow before Financing                         (530)     (635)   (2,196)

Financing
Issue of ordinary share capital                           0     1,857     1,845
Other financing                                        (54)      (91)     (201)
Increase/(decrease) in net cash                       (584)     1,131     (552)

Reconciliation of net cash flow to movement in
net debt

Increase/(decrease) in net cash                       (584)     1,131     (552)
Cash to repurchase debt                                 104       156       293
New loans and hire purchase contracts                  (50)      (64)      (91)
Debt acquired with subsidiary undertakings                0         0         0
Movement in net debt in period                        (530)     1,223     (350)

Net debt at beginning of period                     (2,780)   (2,430)   (2,430)
Net debt at end of period                           (3,310)   (1,207)   (2,780)


Reconciliation of operating profit to cash flow
from operating activities

Operating profit                                    (1,217)       486       911
Exceptional item                                          0     (334)     (481)
Depreciation                                            230       229       438
Amortisation of intangible assets                       117        47        95
(Profit)/loss on sale of fixed assets                   (4)       (2)         1
Decrease/(Increase) in work in progress and           1,003     (157)   (1,216)
debtors
Increase/(decrease) in creditors                         15     (430)     (206)
Other movements                                         (6)         0      (27)
                                                        138     (161)     (485)

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 2000 annual report and financial statements. The balance sheet at 31
December 2000 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 auditors' opinion on the financial statements
was unqualified.

2.           In January 2001 the Group acquired the remaining 15% of the
shares in Pennant Information Services Inc. for £35000. This company is now a
wholly owned subsidiary.

In April 2001 the Group set up a wholly owned subsidiary in Australia, Pennant
Australasia Pty Ltd, which acquired the defence business of Logistics Pty Ltd
for £184000. The   figures shown in the profit and loss account as turnover
and operating loss from acquisitions represent the results of Pennant
Australasia Pty Ltd for the period since acquisition.

3.           The taxation credit for the period is based on the estimated
credit for the full year.

4.           The calculation of earnings per share is based on profit
attributable to the shareholders and weighted average number of shares as set
out below:

                                           Six months   Six months        Year
                                                ended        Ended        Ended
                                              30 June      30 June       31 Dec
                                                 2001         2000         2000

Profit attributable to shareholders      £(1,253,000)      £29,000     £175,000

Basic weighted average number of shares       8036000      7514714      7779694

Employee share options                         362000       345368       362000

Diluted weighted average number of            8398000      7860082      8141694
shares


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