TIDMPEN
RNS Number : 0645A
Pennant International Group PLC
21 September 2022
FOR IMMEDIATE RELEASE 21 September 2022
PENNANT INTERNATIONAL GROUP PLC
Interim Results for the six months ended 30 June 2022
Return to positive EBITA; business mix transformed; significant
gross margin improvement
Pennant International Group plc (AIM: PEN) ("Pennant", the
"Group" or "Company"), a leading global provider of training
technology and integrated product support solutions, announces its
Interim Results for the six months ended 30 June 2022 (the "First
Half", the "Period", or "H1 2022").
Commenting on the results, Chairman John Ponsonby said:
"I am pleased to report that the Period saw the Group return to
positive earnings before interest, taxation and amortisation as
gross margin significantly improved and costs remained under tight
control."
"As a result of management's continued efforts to deliver the
Group's strategy, we now have a leaner, more streamlined
organisation, with an increasing proportion of recurring revenues
from software and services, providing greater forward visibility
and a solid platform from which to grow the business and enhance
shareholder value."
Key points: Financial
-- oup revenues for the Period of GBP6.9 million (H1 2021: GBP
7.4 million) of which circa 65% were recurring (H1 2021: 53%
recurring);
-- 52% of revenues generated from software licensing and associated activities (H1 2021: 35%);
-- Gross margin doubles to 41% (H1 2021: 21%);
-- EBITA profit of GBP0.1 million (H1 2021: EBITA loss of GBP1.0 million);
-- EBITDA profit of GBP0.4 million (H1 2021: EBITDA loss of GBP0.7 million);
-- Loss before tax of GBP0.8 million (H1 2021: loss before tax of GBP1.7 million);
-- Net debt at Period end of GBP4.1 million (H1 2021: net debt of GBP1.9 million);
-- Trade and other receivables due at Period end of GBP5.1 million (H1 2021: GBP3.7 million);
-- Basic loss of (2.21)p per share (H1 2021: basic loss per share of (4.64)p per share);
-- Unrelieved tax losses of GBP6.7 million carried forward (H1
2021: GBP4.5 million carried forward);
-- Three-year order book at Period end stood at GBP27 million (H1 2021: GBP26 million).
Key points: Operational
-- Secured the 'Major Programme' a contract from Boeing Defence
UK Limited for the upgrade of Apache training equipment, worth
GBP8.8 million over three years.
-- Following contract award, successfully passed the initial
engineering milestone event on the Apache upgrade programme.
-- Factory acceptance achieved on the UK Helicopter programme
(overall contract value: GBP3.5 million), with the training device
delivered to the end user's site post Period end.
-- A second software and services order secured in the
commercial aerospace sector (overall order value: USD$1.7 million),
a key target market for the Group's IPS business line.
-- evelopment work completed on prototype simulator for rail
infrastructure organisation which is intended to be rolled out to
numerous sites in the future.
Post Period end highlights:
-- First 'Launch Partner' to participate in programme of testing
and product promotion for new GenS product signed in
Australasia.
-- Circa GBP1 million of orders for software and equipment
upgrades received across July and August, taking orders received
during 2022 to approximately GBP12 million.
-- GD MTE programme almost complete - all four devices have been
built and achieved factory acceptance - and will be finished before
year-end.
-- Surplus freehold site (Pennant Court) sold in August for
GBP2.1 million with proceeds used to paydown borrowings (reduced to
GBP2 million as at 20 September 2022).
Commenting on the Group's prospects, John Ponsonby added:
"We are securing new customers for our IPS software and services
lines in important adjacent sectors including commercial aerospace,
while at the same time gearing up for the launch of the new GenS
software suite next year.
"Furthermore, with the prevailing global security situation, we
are seeing real signs that defence procurement programmes are
unlocking in our key regions, with several new opportunities
already being pursued.
"With a stable contracted order book, good forward visibility of
revenues over the next three years, and a leaner, optimised
organisational structure, the Board is confident about the Group's
future prospects."
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
Enquiries:
Pennant International Group www.pennantplc.co.uk
plc
Philip Walker, CEO
David Clements, Commercial &
Risk Director +44 (0) 1452 714 914
WH Ireland Limited (Nomad and https://www.whirelandplc.com/capital-markets
Broker)
Mike Coe
Sarah Mather +44 (0) 20 7220 1666
Walbrook PR (Financial PR) pennant@walbrookpr.com
Paul Vann +44 (0)20 7933 8780
Tom Cooper Mob: +44 (0)7768 807631
Pennant International Group plc
Interim Report for the six months ended 30 June 2022
Chairman's Statement
Results and dividend
On behalf of the Board of Directors, I can report that the Group
recorded r evenues for the Period of GBP6.9 million which were
lower than the equivalent period in 2021 (H1 202 1: GBP7.4 million)
as the GD MTE entered its final stages and with the Apache
programme yet to ramp up.
Encouragingly, EBITA was positive, at GBP0.1 million, which
represents a substantial improvement over the EBITA loss of GBP1.0
million recorded for the comparable period in 2021. This turnaround
is a result of sustained administrative cost savings implemented in
earlier periods combined with a much-improved gross margin.
The gross profit margin for the Period increased to 41% (H1
2021: 21%) due to the improved sales mix, comprising software
licensing income and consultancy fees and taking into account the
much-reduced impact from the GD MTE programme.
This resulted in a significantly reduced pre-tax loss for the
Period of GBP 0.8 million which compares with a pre-tax loss of
GBP1.7 million in H1 2021.
Administrative costs for the Period were GBP3.6 million (H1
2021: GBP3.2 million), with the increase being associated with
inflationary cost pressures and an increased amortisation charge in
the period arising from an increased software intangible asset
(predominantly the GenS development programme).
At the Period-end net debt stood at GBP4.1 million (H1 2021: net
debt of GBP1.9 million), reflecting significant cash outflows as
various programmes entered their final stages during the First
Half, but with reduced borrowings expected throughout the second
half following the sale of Pennant Court and as invoices are raised
and paid.
Total assets at the Period end were GBP21.9 million (H1 2021:
GBP20.6 million).
The basic loss per share for the Half Year was (2.21)p compared
to a loss of (4.64)p for the same period last year.
A minimal effective tax rate is expected for the full year due
to unrelieved tax losses of GBP6.7 million which have been carried
forward at the Half Year (H1 2021: GBP 4.5 million ) and with
R&D tax credit claims in progress.
The Group's three-year order book increased during the Period,
closing at GBP27 million (H1 2021: GBP26 million) and is scheduled
for delivery as follows: GBP6.3 million in H2 2022, GBP12.2 million
in 2023, GBP6.8 million in 2024 and the balance in H1 2025. The net
increase in the order book (which stood at GBP22 million at 31
December 2021) is largely attributable to the award of the Apache
contract during the Period.
The Directors have concluded that it continues to be in the best
interests of the Company and its shareholders to retain cash at
this time for expected working capital requirements. The Board will
therefore not be declaring an interim dividend but will continue to
review the Group's dividend policy based on performance, cash
generation and working capital and investment requirements .
I would like to thank all Pennant employees, who have worked
tirelessly during the First Half, drawing on Pennant's long
heritage to deliver our impressive breadth of products and
capabilities.
Board Appointment
I am pleased to report that Michael Brinson has been appointed
as the Group's Chief Financial Officer, an executive director
position, with effect from 1 January 2023.
Mr Brinson, a chartered management accountant and currently the
Group's Director of Finance (a non-Board role), joined the Group in
2020 from Leonardo Helicopters, where he was a senior executive
within the company's UK finance team. Since joining Pennant, he has
been instrumental in re-organising the Group's global financial
operations, hugely improving management information and
forecasting, and providing strategic direction on finance matters
across the Group.
In accordance with Schedule 2(g) of the AIM Rules, Mr Michael
John Brinson, aged 35, holds or has held in the past five years the
following directorships and partnerships:
Current directorships Directorships within last five
years
- Leonardo Futureplanner (Trustee)
Ltd
---------------------------------
There is no further information required to be disclosed in
respect of the above appointment pursuant to Rule 17 and Schedule 2
(g) of the AIM Rules for Companies.
Operational Commentary
During the Period, management implemented a re-structuring of
the Group's operations into three key regions, comprising: UK &
Europe; North America; Australasia. The purpose of this change is
to better implement the Group's objective of delivering the full
spectrum of its products and services in each territory and moving
away from particular business lines being centred on certain
regions, thereby enabling the overall business to grow.
Each region made a significant contribution during the Period as
follows:
Revenue by Region GBP m
UK & Europe 2.7
------
North America 2.4
------
Australasia 1.8
------
Total 6.9
------
A key strategic focus for management is to continue to increase
the proportion of the Group's revenues which derive from software
and related activities. For the first time in a reported period,
these activities comprised a majority (52%) of Group turnover as
set out in the table below. Across the board, circa 65% of revenues
during the Period were of a recurring nature.
Revenue by business line Non-recurring Recur-ring Total
(GBP m)
Engineered-to-order (Technical
Training) 1.4 - 1.4
-------------- ----------- ---------
Generic Products (Technical
Training) 0.4 - 0.4
-------------- ----------- ---------
Technical Services (Technical
Training) - 1.5 1.5
-------------- ----------- ---------
Software Licences (IPS) 0.6 - 0.6
-------------- ----------- ---------
Software Maintenance (IPS) - 0.8 0.8
-------------- ----------- ---------
Software Services (IPS) - 2.2 2.2
-------------- ----------- ---------
Total 2.4 4.5 6.9
-------------- ----------- ---------
Commentary is provided on each business line (IPS and Technical
Training) below.
Integrated Product Support (IPS)
The Group's IPS business line centres on Pennant's two
proprietary software product suites, OmegaPS and R4i. OmegaPS is a
sophisticated logistics data tool; R4i provides its users with a
dynamic, S1000D-compliant technical documentation solution.
In addition, the IPS business provides long-term recurring
consultancy, support and maintenance services on both software
suites to its many customers, which include the Canadian and
Australian defence departments and their respective supply
bases.
The Period saw continued demand for these products and related
consultancy, with a second commercial aerospace customer secured
and further pipeline opportunities identified for that sector
together with private space exploration and electric engines.
Product Investment
Capital investment continued in the OmegaPS successor product,
'GenS' to realise the vision of a cutting-edge, end-to-end solution
for customers' data and documentation needs.
GenS represents the next generation of Logistics Support
Analysis/Logistics Product Data technology, with a modern,
easy-to-use interface and functionality, deployable 'on premise' or
as a software as a service. GenS, when combined with the R4i S1000D
Technical Publishing suite will transform customers' Integrated
Product Support capabilities into a truly integrated digital
capability and reduce programme delivery costs.
During the Period, various potential 'launch partners' were
approached to participate in a programme of testing and product
promotion for GenS. The first such partnership was signed shortly
after Period-end with a major OEM in Australasia.
Looking Forward
The IPS sales pipeline is strong (currently assessed in excess
of GBP20 million) and the Group expects the acquisition of new
customers to continue during the second half and beyond, with
multiple opportunities in the United States, Canada and Australia.
As the new regional operational model takes effect, increasing IPS
opportunities in the UK and Europe is a top priority.
Technical Training
The Technical Training business line focuses on the design and
build of generic and platform-specific training technologies and
the provision of related technical and support services for the
defence, aerospace, rail and other safety critical industries.
The Period saw good progress on the Group's systems engineering
contracts:
-- Apache upgrade: The Period saw contract award and programme
commencement for the Apache programme, a contract worth GBP8.8
million over three years. The first engineering event was held and
passed during the First Half.
-- GD MTE: with the build of all four devices complete, the
first two devices were delivered to the end user's site during the
First Half.
-- UK Helicopter programme : Under this contract with a UK OEM
(worth c. GBP3.5 million), Pennant was required to convert a real
helicopter airframe into a systems trainer. The completed training
device was delivered to the end user's site during the First
Half.
Development work was also completed on a prototype simulator for
a rail infrastructure organisation which is intended to be rolled
out to numerous sites in the future.
Looking Forward
The Group has seen defence procurement activity increase during
and after the Period, particularly in relation to new and upgraded
vehicle platforms in the UK, and this aligns well with Pennant's
training systems engineering capabilities.
Furthermore, to complement its existing suite of generic
training aids, the Group is in the process of identifying (and will
then develop) modular, graphically engaging systems trainers which
will build and expand upon its current proprietary software
emulation frameworks. An engine systems trainer of such a type has
already been developed and sold.
The sales pipeline for the Technical Training business line is
very healthy, currently assessed to be circa GBP30 million.
Post Period End Updates
A number of significant items have been achieved since
Period-end:
-- GD MTE: The programme is almost complete and, as previously
stated, will be finished before year-end.
All four devices have been built and achieved factory
acceptance, with the final device being shipped to the end user's
site today. Two devices have already achieved site acceptance (the
final stage of customer acceptance testing), and the remaining two
will undergo site acceptance testing imminently.
-- UK Helicopter programme : The training device achieved site
acceptance in July and the programme is effectively finished with
all major milestones invoiced and paid.
-- Sales: circa GBP1 million of orders for software and
equipment upgrades were received across July and August, taking
orders received during 2022 to a total of GBP12 million.
-- Facilities : with all devices built on the GD MTE and the UK
Helicopter programme, the demand for space has significantly
decreased, and the rationalisation of the Group's facilities
arrangements has continued. Pennant Court, being surplus to
requirements, was sold in August for GBP2.1 million and the
proceeds used to paydown the overdraft, while the Stevenage office
lease was terminated during the same month. Material savings are
expected for 2023 from reduced property running costs, rates and
depreciation.
-- Cash : the Group's net debt is currently GBP2 million (with
an overdraft limit of GBP3 million). Following the completion of
various programme milestones, invoices totalling GBP1.8 million
(excluding VAT) have been raised since the start of August, for
payment on 30 day terms, of which GBP0.7 million has already been
received.
Outlook
We are securing new customers for our IPS software and services
lines in important adjacent sectors including commercial aerospace,
while at the same time gearing up for the launch of the new GenS
software suite next year.
Furthermore, with the prevailing global security situation, we
are seeing real signs that defence procurement programmes are
unlocking in our key regions, with several new opportunities
already being pursued.
As a result of management's efforts to re-orient the business,
we have a leaner organisation, with increasing software and
recurring services revenues; the platform is now in place to grow
the business and enhance shareholder value.
With a Period-end contracted order book of GBP27 million with
good forward visibility, a healthy sales pipeline containing
opportunities worth over GBP50 million, and a leaner, optimised
organisation, the Board is confident about the Group's future
prospects.
J M Ponsonby
Chairman
PENNANT INTERNATIONAL GROUP plc
CONSOLIDATED INCOME STATEMENT for the six months ended 30 June
2022
Notes
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
------------------------- --------------- --------------- -------------
GBP000s GBP000s GBP000s
------------------------- --------------- --------------- -------------
Revenue 6,945 7,427 15,965
------------------------- --------------- --------------- -------------
Cost of sales (4,110) (5,837) (11,609)
------------------------- --------------- --------------- -------------
Gross profit 2,835 1,590 4,356
------------------------- --------------- --------------- -------------
Administration expenses (3,558) (3,222) (6,709)
------------------------- --------------- --------------- -------------
Other income 50 - 203
------------------------- --------------- --------------- -------------
Operating (loss) (673) (1,632) (2,150)
------------------------- --------------- --------------- -------------
Finance costs (137) (64) (329)
------------------------- --------------- --------------- -------------
Finance income - - -
------------------------- --------------- --------------- -------------
(Loss) before taxation (810) (1,696) (2,479)
------------------------- --------------- --------------- -------------
Taxation 2 - - 865
------------------------- --------------- --------------- -------------
(Loss) for the
period (810) (1,696) (1,614)
------------------------- --------------- --------------- -------------
Earnings per share 3
------------------------- --------------- --------------- -------------
Basic (2.21p) (4.64p) (4.41p)
------------------------- --------------- --------------- -------------
Diluted (2.21p) (4.64p) (4.41p)
------------------------- --------------- --------------- -------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2022
Six months Six months
ended 30 ended 30 Year ended
June 2022 June 2021 31 December
Unaudited Unaudited 2021 Audited
----------- ----------- --------------
GBP000s GBP000s GBP000s
----------- ----------- --------------
(Loss) attributable to equity
holders of the parent (810) (1,696) (1,614)
Other comprehensive income:
Exchange differences on
translation of foreign operations 364 (90) (64)
----------------------------------- ----------- --------------
Net revaluation gain - - 353
----------------------------------- ----------- --------------
Deferred tax credit - property,
plant and equipment and
intangibles - - (156)
----------------------------------- ----------- ----------- --------------
(Loss) attributable to
equity
holders of the parent (446) (1,786) (1,481)
----------- ----------- --------------
PENNANT INTERNATIONAL GROUP plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June
2022
Six months Six months Year ended
ended 30 ended 30 31 December
June 2022 June 2021 2021
audited Unaudited Audited
GBP000s GBP000s GBP000s
----------- ----------- -------------
Non-current assets
----------- ----------- -------------
Goodwill 2,546 2,428 2,403
----------- ----------- -------------
Other intangible assets 4,681 5,178 5,081
----------- ----------- -------------
Property plant and equipment 5,817 5,719 6,009
----------- ----------- -------------
Right of use asset 567 736 661
----------- ----------- -------------
Deferred tax asset 836 91 850
----------- ----------- -------------
Total non-current assets 14,447 14,152 15,004
----------- ----------- -------------
Current assets
----------- ----------- -------------
Inventories / work-in-progress 1,347 1,930 865
----------- ----------- -------------
Trade and other receivables 5,146 3,661 4,528
----------- ----------- -------------
Cash and cash equivalents 585 749 901
----------- ----------- -------------
Current tax asset 330 99 330
----------- ----------- -------------
Total current assets 7,408 6,439 6,624
----------- ----------- -------------
Total assets 21,855 20,591 21,628
----------- ----------- -------------
Current liabilities
----------- ----------- -------------
Trade and other payables 4,780 4,379 3,595
----------- ----------- -------------
Current tax liabilities 89 83 367
----------- ----------- -------------
Obligations under finance
and operating leases 191 193 209
----------- ----------- -------------
Bank overdraft 4,741 2,676 4,441
----------- ----------- -------------
Deferred consideration
on acquisition 335 355 432
----------- ----------- -------------
Total current liabilities 10,136 7,686 9,044
----------- ----------- -------------
Net current (liabilities) (2,728) (1,247) (2,420)
----------- ----------- -------------
Non-current liabilities
----------- ----------- -------------
Obligations under finance
and operating leases 444 600 529
----------- ----------- -------------
Deferred tax liabilities - 192 -
----------- ----------- -------------
Contingent consideration
on acquisition 419 1,141 789
----------- ----------- -------------
Warranty provisions 122 122 122
----------- ----------- -------------
Total non-current liabilities 985 2,055 1,440
----------- ----------- -------------
Total liabilities 11,121 9,741 10,484
----------- ----------- -------------
Net assets 10,734 10,850 11,144
----------- ----------- -------------
Equity
----------- ----------- -------------
Share capital 1,836 1,832 1,832
----------- ----------- -------------
Share premium 5,367 5,348 5,345
----------- ----------- -------------
Capital redemption reserve 200 200 200
----------- ----------- -------------
Retained earnings 1,900 2,595 2,687
----------- ----------- -------------
Translation reserve 590 200 226
----------- ----------- -------------
Revaluation reserve 841 675 854
----------- ----------- -------------
Total equity 10,734 10,850 11,144
----------- ----------- -------------
PENNANT INTERNATIONAL GROUP plc
CONSOLIDATED STATEMENT OF CASH FLOWS for the six months ended 30
June 2022
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
--------------- --------------- -------------
Net cash generated
/ (used in) from operating
activities 47 230 (127)
Investing activities
--------------- --------------- -------------
Payment for acquisition
of subsidiary, net
of cash acquired (559) (536) (549)
--------------- --------------- -------------
Purchase of intangible
assets (341) (260) (966)
--------------- --------------- -------------
Purchase of property
plant and equipment (13) (48) (134)
--------------- --------------- -------------
Proceeds from disposal
of property, plant
and equipment - - 22
--------------- --------------- -------------
Net cash used in investing
activities (913) (844) (1,627)
--------------- --------------- -------------
Financing activities
--------------- --------------- -------------
Proceeds from sale
of ordinary shares 26 64 60
--------------- --------------- -------------
Net (repayment of)
obligations under
operating lease (103) (121) (309)
--------------- --------------- -------------
Net cash used in financing
activities (77) (57) (249)
--------------- --------------- -------------
Net (decrease) in
cash and cash equivalents (943) (671) (2,003)
--------------- --------------- -------------
Cash and cash equivalents
at beginning of period (3,540) (1,453) (1,453)
--------------- --------------- -------------
Effect of foreign
exchange rates 327 197 (84)
--------------- --------------- -------------
Cash and cash equivalents
at end of period (4,156) (1,927) 3,540
--------------- --------------- -------------
PENNANT INTERNATIONAL GROUP plc
STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June
2022
Share Share Capital Retained Translation Revaluation Total equity
capital premium redemption earnings reserve reserve
reserve
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------- ------------- ------------ ------------ ------------ ------------ -------------
At 31 December
2020 1,822 5,295 200 4,243 290 683 12,533
------------- ------------- ------------ ------------ ------------ ------------ -------------
(Loss) for the
year - - - (1,614) - - (1,614)
------------- ------------- ------------ ------------ ------------ ------------ -------------
Other
comprehensive
(loss) /
income - - - - (64) 197 133
------------- ------------- ------------ ------------ ------------ ------------ -------------
Total
comprehensive
income 1,822 5,295 200 2,629 226 880 11,052
------------- ------------- ------------ ------------ ------------ ------------ -------------
Issue of new
shares 10 50 - - - - 60
------------- ------------- ------------ ------------ ------------ ------------ -------------
Recognition of
share-based
payment - - - 32 - - 32
------------- ------------- ------------ ------------ ------------ ------------ -------------
Transfer from
revaluation
reserve - - - 26 - (26) -
------------- ------------- ------------ ------------ ------------ ------------ -------------
At 31 December
2021 1,832 5,345 200 2,687 226 854 11,144
------------- ------------- ------------ ------------ ------------ ------------ -------------
(Loss) for the
year - - - (810) - - (810)
------------- ------------- ------------ ------------ ------------ ------------ -------------
Other
comprehensive
income - - - - 364 - 364
------------- ------------- ------------ ------------ ------------ ------------ -------------
Total
comprehensive
income 1,832 5,345 200 1,877 590 854 10,698
------------- ------------- ------------ ------------ ------------ ------------ -------------
Issue of new
shares 4 22 - - - - 26
------------- ------------- ------------ ------------ ------------ ------------ -------------
Recognition of
share-based
payment - - - 10 - - 10
------------- ------------- ------------ ------------ ------------ ------------ -------------
Transfer from
revaluation
reserve - - - 13 - (13) -
------------- ------------- ------------ ------------ ------------ ------------ -------------
At 30 June
2022 1,836 5,367 200 1,900 590 841 10,734
------------- ------------- ------------ ------------ ------------ ------------ -------------
PENNANT INTERNATIONAL GROUP plc
NOTES TO THE FINANCIAL INFORMATION for the six months ended 30
June 2022
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 2022.
These accounting policies are drawn up in accordance with
International Financial Reporting Standards (IFRSs) in conformity
with the requirements of the Companies Act 2006.
The comparative figures for the year ended 31 December 2021 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-quoted 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 2022.
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 does not take into account the potentially
diluting effect of share options as this impact would be
antidilutive to the losses attributable to equity shareholders.
Six months ended Six months ended Year ended 31
30 June 2022 30 June 2021 December 2021
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
--------------------------------- ---------------------- ---------------
Earnings
--------------------------------- ---------------------- ---------------
Net (loss) attributable
to equity shareholders (810) (1,696) (1,614)
--------------------------------- ---------------------- ---------------
Number of shares Number Number Number
--------------------------------- ---------------------- ---------------
Weighted average
number of ordinary
shares 36,674,834 36,543,371 36,591,864
--------------------------------- ---------------------- ---------------
Diluting effect of
share options 1,939,043 1,819,043 1,746,543
--------------------------------- ---------------------- ---------------
Weighted average
number of ordinary
shares for the purpose
of dilutive earnings
per share 38,613,877 38,362,414 38,338,407
--------------------------------- ---------------------- ---------------
Earnings per share
(basic) (2.21p) (4.64p) (4.41p)
--------------------------------- ---------------------- ---------------
Earnings per share
(diluted) (2.21p) (4.64p) (4.41p)
--------------------------------- ---------------------- ---------------
4. Cash generated from operations
Six months Six months ended Year ended
ended 30 June 2021 31 December 2021
30 June 2022 Unaudited Audited
Unaudited
GBP000s GBP000s GBP000s
-------------- ----------------- ------------------
(Loss) for the
period (810) (1,696) (1,614)
-------------- ----------------- ------------------
Finance costs 137 64 329
-------------- ----------------- ------------------
Income tax credit - - (865)
-------------- ----------------- ------------------
Withholding tax - - 38
-------------- ----------------- ------------------
Depreciation
of property,
plant and equipment 215 234 460
-------------- ----------------- ------------------
Depreciation
of right of use
assets 84 93 243
-------------- ----------------- ------------------
Amortisation
of other intangible
assets 741 652 1,366
-------------- ----------------- ------------------
Effect of land
and buildings
revaluation - - (117)
-------------- ----------------- ------------------
R&D tax credit (50) - (157)
-------------- ----------------- ------------------
Share-based payment 10 40 32
-------------- ----------------- ------------------
Operating cash
flows before
movement in working
capital 327 (613) (285)
-------------- ----------------- ------------------
(Increase) /
decrease in receivables (618) 1,223 356
-------------- ----------------- ------------------
(Increase) /
decrease in inventories (482) (849) 216
-------------- ----------------- ------------------
Increase / (decrease)
in payables 1,262 358 (525)
-------------- ----------------- ------------------
Cash generated
from / (used
in) operations 489 119 (238)
-------------- ----------------- ------------------
Tax (paid) /
received (278) 175 440
-------------- ----------------- ------------------
Interest paid (164) (64) (329)
-------------- ----------------- ------------------
Net cash generated
from / (used
in) operations 47 230 (127)
-------------- ----------------- ------------------
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