Business Update

Pennant International Group plc (AIM:PEN), the systems support software and training solutions company, provides the following business update.

Conclusion of Property Disposal Programme

The Company is pleased to report that the sale of the final two freehold units at Staverton Connection (Units D1 and D2) has now completed on a sale-and-leaseback basis.

The aggregate sale consideration for the final two units is £1.125 million (excluding VAT). Pennant remains in occupation of the two units under a full repairing lease which has been entered into for a five-year term, with a three-year 'tenant only' break clause. The annual rent is £95,000 (exclusive of VAT, utilities and related outgoings).

The net proceeds of the final property sales will be applied to reducing the Group's overdraft borrowings and, after associated expenses, the transaction has realised a small loss against book value as at 31 December 2024.

This transaction successfully concludes the property disposal programme launched in September 2024 which has realised £3.2 million in gross sale proceeds in line with the programme's objectives.

Trading update

The Company is seeing increased interest in its products and services and, together with a growing pipeline of opportunities for 2025 and beyond, the Q2 2025 outcome of the UK Government's defence spending review augurs well for the remainder of the financial year and in the medium term.

Negotiations with the Ministry of Defence on the GenFly technology upgrade contract are progressing well and Pennant looks forward to announcing formal contract award, scheduled for Q3 of the current financial year.

As expected, 2025 revenue is anticipated to be significantly second-half-weighted, particularly noting the likely award date for the GenFly contract and delayed project work through Q2 within the Company's Track Access (rail) business.

While the expected conversion of the software sales pipeline has shifted into H2, the campaign to migrate legacy OmegaPS users to Auxilium (via GenS subscriptions) is proceeding to plan and, when combined with new subscription sales, Pennant's annual recurring revenue (ARR) attributable purely to software subscriptions and maintenance now exceeds £2m for the first time in the Group's history.

The Directors remain confident that the Group will meet market expectations for the full year, with the second half revenue weighting achievable through the continued delivery of existing contracts, execution of Pennant's 'go to market' strategy for the Auxilium suite, and successful conversion of the GenFly contract (which is expected to contribute circa 15% of 2025 revenue).

A further trading update will be provided in August ahead of the Interim Results.