TIDMPEN
RNS Number : 5252S
Pennant International Group PLC
12 March 2019
FOR IMMEDIATE RELEASE 12 March 2019
PENNANT INTERNATIONAL GROUP PLC
Preliminary Results for the Year Ended 31 December 2018
A Year of Delivery with Significant Progress
Positive Contribution across all Divisions; Earnings per Share
more than Double
Pennant International Group plc ("Pennant", the "Company" or the
"Group"), the AIM quoted supplier of integrated training and
support solutions, products and services which train and assist
operators and maintainers in the defence and regulated civilian
sectors globally, is pleased to announce Preliminary Results for
the Financial Year Ended 31 December 2018.
Commenting on the Group's performance, Simon Moore, Chairman,
said:
"I am delighted to report that 2018 has seen Pennant build on
the firm foundations established in 2017, delivering full-year
revenues of GBP21.07 million and operating profit of GBP3.17
million.
During the period, a number of key operational and strategic
objectives were achieved, most notably the successful completion of
two major Middle East contracts, the securing of other major
contract awards across the business, several of which are with new
customers, and the launch and subsequent sales of our innovative
new training solutions.
Post period-end, this positive trading momentum has been
maintained, complemented by the raising of over GBP2.1 million of
new share capital by way of an over-subscribed institutional
placing and the exercise of share options, and the purchase of the
Aviation Skills Partnership, the Group's first acquisition since
1999."
Financial Summary
-- Group revenues (following application of IFRS 15) of GBP21.1
million (2017: GBP18.1 million);
-- Gross profit margin was 39% (2017: 40%);
-- Profit before taxation was GBP3.2 million (2017: GBP1.8 million);
-- Earnings before interest, tax and amortisation of GBP3.3 million (2017: GBP2.1 million);
-- Profit for the year attributable to shareholders was GBP3.15
million (2017: GBP1.53 million);
-- Basic earnings per share of 9.49p (2017: 4.65p)
-- Group net assets at year-end of GBP14.04 million (2017: GBP13.33 million);
-- Net cash at year-end of GBP1.85 million (2017: GBP1.50 million); nil borrowings;
-- No final dividend recommended (2017: GBPNIL);
-- Three-year order book at year-end stood at GBP37 million (2017: GBP34 million).
Operational Summary
Contracts
-- Down-selection on major programme worth in the region of
GBP25 million to GBP30 million. Negotiations with the customer are
ongoing with a view to a contract being placed in the first half of
2019.
-- Award of a new contract in October 2018 to supply training
aids for a Qatari customer worth in the region of GBP10 million,
deliverable over 2018, 2019 and 2020.
-- The successful completion and customer acceptance of the
first tranche of devices on the Qatari contract prior to
year-end.
-- Successful rescoping of the Group's key contract with a major
UK prime contractor for electromechanical trainers and
computer-based training for the Ajax vehicle, with contract value
increased by GBP3.5 million to just under GBP12 million.
-- Delivery of all remaining training aids on both Middle East
contracts signed in 2016, with final payments received in July
2018.
-- Successful renewal of the key contract with the Canadian
government, worth circa C$30 million over five years.
-- New order secured worth in the region of C$750,000 over three
years (to June 2021) for OmegaPS consultancy services to a North
American prime contractor.
-- An order from the UK MOD for an upgrade to its virtual
parachute training systems (worth circa GBP370,000).
-- A new contract in the Middle East for technical and support
services to be provided in region.
-- An order from a new customer in the rail industry for the
re-configuration and re-deployment of a rail cab simulator (worth
circa GBP125,000).
-- Additional orders from Network Rail for control room simulators worth circa GBP50,000.
-- A new contract from a rail car builder for technical
documentation services (initial value: GBP150,000 per annum).
-- An extension to 31 March 2019 of the existing Omega PS contract with the Australian Defence Organisation.
Investment
-- The Group has continued to modernise and improve both
production and administrative facilities with investment in a
planned programme to upgrade our operations.
-- During 2018, the Group invested over GBP2 million in new
facilities, acquiring two new freehold properties and increasing
overall floorspace to circa 60,000 square feet.
-- Targeted investment in innovation has been made to further
expand the Group's market penetration, addressing gaps in the
product range and improving the overall customer proposition.
During the period, the Group invested over GBP1m in the development
of new and enhanced solutions.
-- To date six new products have been successfully launched and
orders have been secured for five of these solutions within the
first year, comprising the Basic Helicopter Maintenance Trainer,
Generic Stores Loading Trainer, Genskills Mk. 2 Virtual Aircraft
Training System and Virtual Loadmaster Training System.
Management
The Group continued to strengthen its operational management
during the period, making a number of key appointments, including a
new Chief Operating Officer to manage the Technical Training
business (an experienced operations director with a prime
contractor and military background).
On current trading and prospects, Mr Moore concluded:
"Prospects for the UK, not least due to Brexit, and the broader
global economy remain uncertain, with ongoing political and
financial pressures in defence markets and elsewhere.
However, the Group is experiencing an encouraging start to the
current financial year. The Board anticipates that the full year
results for 2019 will be significantly second-half weighted due to
the mix of products and the application of IFRS 15 to the timing of
product delivery and realisation of Group profits.
Our contracted order book, valued at more than GBP37 million,
underpins good forward visibility of revenues well into 2021, and,
when combined with the pipeline of active bids and the acquisition
of ASP, together provide an excellent basis for further achievement
in 2019 and beyond."
Enquiries:
Pennant International Group plc www.pennantplc.co.uk
Philip Walker, CEO
David Clements, Commercial &
Risk Director +44 (0) 1452 714 914
WH Ireland Limited www.whirelandcb.com
Mike Coe +44 (0) 117 945 3470
Walbrook PR (Financial PR) paul.vann@walbrookpr.com
+44 (0)20 7933 8780
Paul Vann / Tom Cooper +44 (0)7768 807631
CHAIRMAN'S STATEMENT
Year of delivery
In my statement for 2017, I advised that Pennant had undergone a
period of dynamic and transformational change, led by the new
management team, and provided guidance that the Group's trading
prospects for 2018 were positive.
The Group is reporting a record performance for 2018, with
full-year revenues and operating profits ahead of historic levels
and in-line with market expectations.
During the period under review, a number of key operational and
strategic objectives have been achieved, most notably the
successful completion of two major Middle East contracts, the
securing of other major contract awards across the business,
several of which are with new customers, and the launch and
subsequent sales of our innovative new training solutions.
Post period-end, this positive trading momentum has been
maintained, complemented by the raising of over GBP2.1 million of
new share capital by way of an over-subscribed institutional
placing and the exercise of share options, and the purchase of The
Aviation Skills Partnership Limited ("ASP"), the Group's first
acquisition since 1999.
Key financials
For the year ended 31 December 2018, the Group delivered
consolidated revenues of GBP21.07 million (2017: GBP18.07 million),
driven by the continued production and successful completion of
products on its major contracts for training colleges in the Middle
East.
The Group posted consolidated profit before tax of GBP3.18
million (2017: GBP1.81 million) which represents a significant
increase in performance and a record reported profit for the Group.
Consolidated net assets increased to GBP14.04 million (2017:
GBP13.33 million) reflecting the profitable trading.
Basic earnings per share more than doubled to 9.49p compared to
the reported earnings per share of 4.65p for the same period last
year.
Dividends
The Board fully appreciates the importance of dividend payments.
However, notwithstanding the Group's strong trading performance,
positive outlook and nil borrowings, the Directors have concluded
that it is in the Company's and shareholders' current best
interests to retain cash for working capital and investment in
accordance with plans for future growth (including securing key new
contracts and the development of the ASP business).
The Board will therefore not be recommending the payment of a
final dividend for the year ended 31 December 2018. However, it
will continue to review dividend policy throughout 2019 based on
trading performance and working capital requirements.
Governance
The Board believes in robust corporate governance. We have
worked closely with our advisors and in 2018 continued to
strengthen our governance frameworks to ensure strong,
proportionate governance throughout the Group. We have established
appropriate risk management procedures and keep key risks to the
Group under regular review. Further details of our principal risks
and uncertainties are provided in the Governance & Risks
section of the Group's 2018 Annual Report.
Board changes
During the year under review there have been a number of Board
changes. With effect from 1 April 2018 Gary Barnes was appointed as
Finance Director and John Ponsonby was appointed Non-Executive
Director and Chair of the Strategy Committee. Further details on
both new Board members can be found in the Governance & Risks
section of the 2018 Annual Report.
Christopher Powell, Non-Executive Director and Chair of the
Audit Committee is due to retire by rotation at the next Annual
General Meeting ("AGM"). After more than 25 years of service to the
Group, Mr Powell has confirmed that he will not be standing for
re-election.
On behalf of the Board, I would like to take this opportunity to
recognise Christopher for his long service and significant
contribution to the Company. Christopher has been integral to the
Group's success over the years, being key to the Company's
admission to AIM over 20 years ago, overseeing the award of the
Group's 'game-changing' contract for training devices at RAF
Cosford, leading the acquisition of the OmegaPS business, and many
other critical contributions. Following his retirement as a
Director at the AGM, we anticipate that we will engage Christopher
from time to time on strategic matters, drawing on his extensive
knowledge and experience.
On 24 September 2018, Timothy Rice, who was due to retire by
rotation at the next AGM confirmed that he would not be standing
for re-election and it was agreed that Mr Rice would leave the
Company with immediate effect. On behalf of the Board, I would like
to thank Tim for his contribution to the Company.
Our people
As always, I would also like to take this opportunity to thank
to thank Philip Walker, his executive team and all Pennant staff
across the Group for their hard work and dedication throughout the
year. Their continued commitment and drive to ensure that the
business delivers the high-quality solutions that our customers
require and expect, operating under tight timescales, are key
factors in maintaining and enhancing the ongoing and longstanding
relationships we have with our customers.
Brexit
The Board has carried out a review of its customer and supplier
base and continues to monitor developments in relation to Brexit
and its potential impact on the Group.
Pennant has no significant contracts with customers in EU member
states (other than the UK itself), and no material direct suppliers
within the EU. Whilst the ultimate form Brexit will take remains
unclear, the Group presently expects that Brexit will have only a
minimal effect on its trading. However, the Board will continue to
monitor closely the political and economic situation as it develops
and any potential impact Brexit may have on the wider supply chain
and the business environment generally.
Outlook and future developments
The Board is pleased with the healthy organic growth achieved
across the Group in 2018, and is looking to build on this positive
momentum by continuing to implement the Group's strategy, however,
we recognise that prospects for both the UK and the broader global
economy remain uncertain; there are political and financial
pressures in defence markets and beyond.
The key risks faced by Pennant have been carefully considered by
the Board and our assessment of these risks and the mitigations and
controls we are deploying in response are set out in the 2018
Annual Report. However, Pennant is nimble, agile and responsive, so
is well placed to address these challenges as they arise.
The Group is experiencing an encouraging start to the current
financial year and anticipates that the full year results for 2019
will be significantly second-half weighted due to the mix of
products and the application of IFRS 15.
Our contracted order book, currently valued at more than GBP37
million, underpins good forward visibility of revenues well into
2021, and when combined with the pipeline of active bids, and the
acquisition of ASP, together provide a solid platform to deliver
further progress in 2019 and beyond.
Simon Moore
Chairman
CHIEF EXECUTIVE'S REVIEW
Significant progress by Pennant
In the 2017 Annual Report, I outlined my confidence that the
implementation of operational improvements coupled with the
continued investment in infrastructure, people and products had
provided a firm platform to drive future growth.
I am delighted to report that this confidence was well-founded
as 2018 saw the Group make significant progress, delivering
impressive results for the year and continuing to successfully
implement its strategy. The Group overcame all the key challenges
it faced and was able to focus on contract delivery which generated
revenues for the year of GBP21.1 million (up 17%), an operating
profit of GBP3.2 million (up 75%) and an operating margin of 15%
(2017: 10%).
Across all units we have seen major new orders secured, with
every division and every territory in which we operate making a
positive contribution to overall performance.
Financial review
The key financial performance indicators are noted below.
The gross profit margin for the period was 39% (2017: 40%)
reflecting the consistent mix of products and services delivered
across the two years.
The operating margin has significantly increased to 15% (2017:
10%) due to effective management of central costs and the benefits
of an improved operational model following the re-organisation of
UK operations at the start of 2018.
Cash generated in operations amounted to GBP5.0 million (2017:
cash used in operations GBP1.0 million), reflecting the achievement
of contractual delivery on major programmes. The Group has nil
borrowings and at the year-end had cash balances of GBP1.8 million
(2017: GBP1.5 million).
The Group's tax position shows a tax charge of GBP32,712 (2017:
GBP275,409), representing an effective tax rate of 1% (2017: 15%).
The Group has unrelieved tax losses carried forward of GBP5.3
million (2017: GBP0.3 million).
Research and Development tax credits claimed in the UK during
the year amounted to GBP1.9 million (2017: GBP0.3 million) and
further claims on current projects are expected to be made during
2019.
The order book at the year-end stood at GBP37 million (2017:
GBP34 million), of which GBP19 million of revenue (2017: GBP13
million) is scheduled for recognition within one year. Of the total
order book, 51% (2017: 65%) is denominated in sterling and 36%
(2017: 30%) is denominated in Canadian dollars. Any movement of
sterling to the Canadian dollar would potentially impact the
OmegaPS business.
The Company's balance sheet remains strong, and post year-end
the Company raised GBP2.1 million from an issue of new shares.
These funds will be used to support the acquisition of ASP, to
continue investing in product development and for working capital
requirements.
Divisional performance
All business units have contributed to the Group's profitable
performance and new orders have been secured in each division.
Divisional financial performance is set out below and further
information about the business of each division is provided in the
'About Pennant' section of this document.
Technical Training
The Group's Technical Training division (formerly known as
Training Systems) is focused on the design and build of generic and
platform-specific training solutions and the provision of related
technical and support services.
The Technical Training division continues to be the main driver
of revenues within the Group and has delivered an excellent
performance. Revenues for the year were strong at GBP16.8 million
(2017: GBP13.6 million) as a direct result of the successful
delivery of major Middle East contracts.
2018 2017
GBPm GBPm
Revenue 16.8 13.6
------ ------
Divisional Contribution 2.9 1.4
------ ------
Revenues from the Technical Training division were predominantly
generated from product sales, which accounted for 80% of the
divisional revenue, with the balance generated from technical and
support services.
The contribution from Technical Training accounted for 90% of
the Group's operating profit for the period (2017: 78%).
During the year, the Group made significant investment in
preparation for further growth expected to be driven by future
contract awards. To complement this, the division has been
re-organised internally to maximise its potential to secure and
deliver new orders.
Integrated Logistics Support (ILS)
The Group's ILS division (formerly known as Software Services)
focuses on the development of the OmegaPS LSAR software product and
the provision of consultancy, training and support services in
relation thereto.
The division had a solid year with revenues and contribution
being maintained at similar levels to the prior year:
2018 2017
GBPm GBPm
Revenue 4.3 4.4
------ ------
Divisional Contribution 0.3 0.4
------ ------
Revenues from the ILS division in both 2017 and 2018 were
primarily generated from consultancy services (60%) and long-term
software maintenance agreements (15%). This contracted, recurring
revenue is integral to the Group's forward visibility and quality
of earnings.
The ILS division accounted for 10% of the Group's net profit for
the period.
During the period, the Group secured a new consulting services
contract with the Canadian government, worth up to C$30m, for the
use and optimisation of Pennant's OmegaPS suite of supportability
software.
Aviation Skills Partnership
Post year-end, the Group made its first acquisition since 1999
with the purchase of the Aviation Skills Partnership (ASP). ASP is
focused on the promotion, facilitation and delivery of aviation
skills training, promoting the establishment of, and then managing,
aviation skills academies. The first such academy, International
Aviation Academy - Norwich, operates from Norwich International
Airport. Three more academies are in the process of being
established and are expected to come online from 2020.
Operational review
Our mission is to generate sustainable long-term growth for the
business. In order to deliver this objective, we continue to invest
in areas that we consider are the main drivers for business success
and to ensure the business has the tools and flexible skilled
workforce required to deliver new, major and complex contracts.
Infrastructure
The Group has continued to modernise and improve facilities with
investment in a planned programme to upgrade our operations. During
2018 the Group invested over GBP2 million in new facilities,
acquiring two new freehold properties and increasing overall
floorspace to circa 60,000 square feet.
This increased footprint provides the foundation to bid for and
deliver additional and larger scale programmes in the future.
People
Our employees remain core to our future business success.
Without talented people, there are no product innovations or
technical solutions.
During 2018, we strengthened and grew the teams across our UK,
Canadian and Australian operations with significant investment made
in senior skills and we made a number of strategic appointments
designed to improve operational delivery and manage risk
including:
-- a new Chief Operating Officer to manage the Technical
Training business (an experienced operations director with a prime
contractor and military background), commencing in role post
period-end;
-- a new Chief Operating Officer for the ILS business (an
internal candidate with excellent product knowledge and creditable
service with the Canadian Navy, a key user of OmegaPS), to succeed
the present incumbent, Brian MacDonald from the second half of
2019;
-- a new Head of Programmes for Technical Training (an
experienced manager of training-related programmes at several prime
contractors) to focus on effective programme delivery.
On behalf of the Board, I would like to thank Mr MacDonald for
his exemplary service to the Group as the present Canadian COO over
the last 15 years and to recognise his huge contribution in
building the OmegaPS business (particularly its consultancy
services) into the key division of the Group that it is today.
Brian will continue to work with the Group in a strategic advisory
role.
Innovation
In line with the Group's core strategic objective, investment in
innovation has been targeted to expand the Group's market coverage,
addressing gaps in the product range and improving the overall
customer proposition. During the period, the Group invested over
GBP1m in the development of new and enhanced solutions.
To date six new products have been successfully launched and
orders have been secured for five of these solutions within the
first year, comprising the Basic Helicopter Maintenance Trainer,
Generic Stores Loading Trainer, Genskills Mk 2, Virtual Aircraft
Training System and Virtual Loadmaster Training System.
The Company anticipates that it will continue to invest in new
solutions during 2019 and beyond. The Group has an active pipeline
of potential product innovations and improvements that are going
through an assessment process with a view to obtaining funding
approval if a business case is proven. Together, these new products
offer the potential for further significant growth.
Contracts
New contract awards, amendments and achievements during the year
are set out below:
-- Award of a new contract in October 2018 to supply training
aids for Qatar worth in the region of GBP10 million, deliverable
over 2018, 2019 and 2020.
-- The successful completion and customer acceptance of the
first tranche of devices on the Qatar contract prior to
year-end.
-- Successful rescoping of the Group's key contract with a major
UK prime contractor for electromechanical trainers and
computer-based training for the Ajax vehicle, with contract value
increased by GBP3.5 million to just under GBP12 million.
-- Delivery of all remaining training aids on both Middle East
contracts signed in 2016, with final payments received in July
2018.
-- Successful renewal of the key contract with the Canadian
government, worth circa C$30 million over five years.
-- New order secured worth in the region of C$750,000 over three
years (to June 2021) for OmegaPS consultancy services to a North
American prime contractor.
-- An order from the UK MOD for an upgrade to its virtual
parachute training systems (worth circa GBP370,000).
-- A new contract in the Middle East for technical and support
services to be provided in region.
-- An order from a new customer in the rail industry for the
re-configuration and re-deployment of a rail cab simulator (worth
circa GBP125,000).
-- Additional orders from Network Rail for control room simulators worth circa GBP50,000.
-- A new contract from a rail car builder for technical
documentation services (initial value: GBP150,000 per annum).
-- An extension to 31 March 2019 on the existing Omega PS contract with the Australian Defence Organisation.
Implementing the strategy
The underlying strengths of Pennant - our long-term customer
relationships, our specialist services and our quality-assured
reputation - remain the solid foundations of our proposition.
Through its continued investment in infrastructure, people and
products, the Company has enhanced its ability to deliver future
growth.
The Board is confident that Pennant can continue to increase
revenues through organic growth and will continue to explore ways
to complement this with acquisitions.
The achievements of the year, together with operational
improvements implemented across the Group and our healthy pipeline,
provide a firm platform for future success.
Philip Walker
CEO
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 31 December 2018
Notes 2018 2017
Continuing operations GBP GBP
Revenue 21,069,223 18,069,960
Cost of sales (12,806,223) (10,906,992)
----------------- --------------------
Gross profit 8,263,000 7,162,968
Administrative expenses (5,093,520) (5,356,895)
----------------- --------------------
Operating profit 3,169,480 1,806,073
Finance costs (1,700) (2,693)
Finance income 10,857 5,371
----------------- --------------------
Profit before taxation 3,178,637 1,808,751
Taxation (charge) / credit 1 (32,712) (275,409)
----------------- --------------------
Profit for the year attributable to
the equity
holders of the parent 3,145,925 1,533,342
================= ====================
Earnings per share
Basic 9.49p 4.65p
Diluted 8.67p 4.30p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2018
Notes 2018 2017
GBP GBP
Profit for the year attributable
to the equity
holders of the parent 3,145,925 1,533,342
Items that may be reclassified to
profit or loss
Exchange differences on translation
of foreign operations (34,086) (85,055)
Total comprehensive income for the
period attributable to the equity
holders of the parent 3,111,839 1,448,287
============ =============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER
2018
Notes 2018 2017
GBP GBP
Non-current assets
Goodwill 951,939 962,133
Other intangible assets 1,660,292 231,048
Property, plant and equipment 6,889,346 3,702,851
Deferred tax assets 198,432 310,699
------------- -------------
Total non-current assets 9,700,009 5,206,731
------------- -------------
Current assets
Inventories 1,923,639 74,629
Trade and other receivables 5,184,533 10,153,650
Cash and cash equivalents 1,848,954 1,502,655
Total current assets 8,957,126 11,730,934
Total assets 18,657,135 16,937,665
Current liabilities
Trade and other payables 4,478,039 2,932,857
Current tax liabilities 42,247 80,600
Obligations under finance leases 5,350 4,945
Total current liabilities 4,525,636 3,018,402
Net current assets 14,131,499 8,712,532
Non-current liabilities
Obligations under finance leases 20,383 26,895
Trade and other payables 23,105 6,325
Deferred tax liabilities - 307,916
Warranty provisions 50,000 250,000
------------- -------------
Total non-current liabilities 93,488 591,136
------------- -------------
Total liabilities 4,619,124 3,609,538
Net assets 14,038,011 13,328,127
============= =============
Equity
Share capital 1,685,177 1,647,177
Share premium account 3,168,870 2,677,571
Capital redemption reserve 200,000 200,000
Retained earnings 8,225,321 7,982,360
Translation reserve 297,926 332,012
Revaluation reserve 460,717 489,007
Total equity 14,038,011 13,328,127
============= =============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2018
Capital
Share Share redemption Retained Translation Revaluation Total equity
capital Premium reserve earnings reserve reserve
(see below) (see (see below) (see below)
below)
---------- ------------- ----------- ------------- ------------- ------------- -----------------
GBP GBP GBP GBP GBP GBP GBP
At 1 January
2017 1,649,277 2,685,971 200,000 6,347,343 417,067 517,297 11,816,955
Profit for
the year - - - 1,533,342 - - 1,533,342
Other
comprehensive
income - - - - (85,055) - (85,055)
---------- ------------- ----------- ------------- ------------- ------------- -----------------
Total
comprehensive
income 1,649,277 2,685,971 200,000 7,880,685 332,012 517,297 13,265,242
Cancellation
of B and C
shares (2,100) (8,400) - - - - (10,500)
Recognition
of share
based
payment - - - 73,385 - - 73,385
Transfer from
revaluation
reserve - - - 28,290 - (28,290) -
At 1 January
2018 1,647,177 2,677,571 200,000 7,982,360 332,012 489,007 13,328,127
Total
Comprehensive
Income for
the year - - - 3,145,925 - - 3,145,925
Tax relating
to other
comprehensive
income - - - 116,407 - - 116,407
Adjustment
on initial
application
of IFRS 15 - - - (3,151,644) - - (3,151,644)
Other
comprehensive
income - - - - (34,086) - (34,086)
---------- ------------- ----------- ------------- ------------- ------------- -----------------
Total
comprehensive
income 1,647,177 2,677,571 200,000 8,093,048 297,926 489,007 13,404,729
Issue of New
Ordinary
Shares 38,000 491,299 - - - - 529,299
Recognition
of share
based
payment - - - 103,983 - - 103,983
Transfer from
revaluation
reserve - - - 28,290 - (28,290) -
-----------------
At 31 December
2018 1,685,177 3,168,870 200,000 8,225,321 297,926 460,717 14,038,011
========== ============= =========== ============= ============= ============= =================
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2018
Notes 2018 2017
GBP GBP
Net cash from operations 5,012,123 (988,536)
------------ --------------
Investing activities
Interest received 10,857 5,371
Purchase of intangible assets (1,583,760) (227,108)
Purchase of property, plant and equipment (3,561,439) (1,282,088)
Proceeds from sale of assets held for sale
Proceeds on disposal of property, plant - 575,000
& equipment 1,600 -
Net cash used in investing activities (5,132,742) (928,825)
------------ --------------
Financing activities
Proceeds from sale of ordinary shares 529,299 -
Cancellation of B & C Shares - (10,500)
Net funds from obligations under finance
leases (4,647) (4,187)
Net cash from/(used in) financing activities 524,652 (14,687)
------------ --------------
Net increase/(decrease) in cash and cash
equivalents 404,033 (1,932,048)
Cash and cash equivalents at beginning
of year 1,502,655 3,517,541
Effect of foreign exchange rates (57,734) (82,838)
Cash and cash equivalents at end of year 1,848,954 1,502,655
============ ==============
Abbreviated notes to the consolidated financial statements for
the year ended 31 December 2018
1. Taxation
2018 2017
(GBP) (GBP)
Recognised in the income statement
Current UK tax expense - 52,218
Foreign tax 103,819 34,385
Adjustment in respect of prior tax years
foreign 9,770 -
In respect of prior years 5 (3,511)
-------------------------- ------------------
113,594 83,092
Deferred tax expense relating to origination (84,463) 189,398
and reversal of temporary differences
Deferred tax prior year adjustment 3,581 -
Exchange rate difference - 2,919
Total tax expense 32,712 275,409
========================== ==================
Reconciliation of effective tax rate
Profit before tax 3,178,641 1,809,751
-------------------------- ------------------
Tax at the applicable rate of 19.00%
(2017: 19.25% 604,199 348,378
Income not taxable for tax purposes (598,812) -
Tax effect of expenses not deductible
in determining taxable profit 88,885 19,788
Additional deduction for R&D expenditure (365,604) (77,974)
Foreign tax credits 30,125 2,250
Share Option deduction (79,933) -
Effect of different tax rates of subsidiaries
operating in other jurisdictions 21,329 -
Effect of lower rate of deferred tax (9,852) 8,853
Losses arising not recognised in deferred
tax - (40,612)
Deferred tax not recognised 340,001 (2,169)
Effect of adjustments for prior years 13,351 -
Temporary differences not recognised
in computation (10,977) 16,895
------------------
Total tax expense 32,712 275,409
========================== ==================
2. Publication of non-statutory accounts
The financial information set out in this preliminary
announcement does not constitute statutory accounts as defined in
the Companies Act 2006.
The statement of financial position at 31 December 2018 and
income statement, statement of changes in equity, statement of cash
flows and associated notes for the year ended have been extracted
from the Company's 2018 financial statements upon which the auditor
opinion is unqualified.
Copies of the 2018 Annual Report and Accounts will be
distributed to shareholders shortly and will be available on the
Company's website: www.pennantplc.co.uk. Further copies may be
obtained by contacting the Company Secretary at Pennant Court,
Staverton Technology Park, Cheltenham GL51 6TL.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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