Pennant International reports record gross profit margin

21st Jun 2024 12:49

(Sharecast News) - Pennant International reported a successful return to operating profit in its final results on Friday, achieving a record gross profit margin.

The AIM-traded systems support and training solutions company reported group revenue of £15.5m, up from £13.7m in 2022, and a gross profit margin of 50%, up from 42% the prior year.

Its EBITA profit rose to £1.4m from £0.5m year-on-year, while it narrowed its loss before tax to £0.4m from the prior year's £1.4m.

Pennant also achieved an operating profit of £0.1m, swinging from the operating loss of £1m recorded in 2022.

Basic losses per share came in at 2.53p, slightly higher than the 2.45p loss per share in 2022.

The firm carried forward unrelieved tax losses of £6.8m, down from £7.1m in the previous year, and had group net assets of £9.8m at year-end, compared to £10.7m in 2022.

Net debt increased to £1.9m from £0.4m, reflecting investment in the IPS suite, and no final dividend was recommended.

Operationally, Pennant reported significant strides with a £1.4m investment in proprietary software products.

European revenue growth was strong, bolstered by the £9m Boeing Defence United Kingdom Apache upgrade programme, which remained on schedule and within budget, with final deliveries expected in September.

The acquisition of Track Access Productions in April last year expanded Pennant's rail offerings, contributing £0.16m in profit before tax within about nine months.

Additionally, the release of version two of GenS in May 2023 led to the first commercial sale in June 2023.

The company also entered a strategic partnership with Aquila Learning to integrate its ALaRMS system into Pennant's software suite, enhancing capabilities for shared customers.

Since the period ended, Pennant raised £1.36m to support working capital and investment in the IPS suite.

Ian Dighé was appointed chairman, succeeding Philip Cotton, while the company embarked on an investment phase to integrate its three IPS applications - GenS, Analyzer and R4i - into a comprehensive solution.

"I'm pleased to report my first set of results as chairman of Pennant, highlighting significant group-wide progress with a return to operating profit and record gross margins," said chairman Ian Dighé.

"We continue to invest in, and develop, our leading suite of services and solutions, helping our customers maximise their operational efficiency, whilst pursuing a group strategy that focuses on higher value, higher margin, recurring software and services revenues."

At 1128 BST, shares in Pennant International were up 6.21% at 25.49p.

Reporting by Josh White for Sharecast.com.