Pennant International provides a range of services that extend across e-Learning, Computer Based Training, Emulation and Simulation, Technical Documentation, Media Services, Cartography, Supportability Engineering Software products and related services. I have a holding in my growth portfolio (epic code: PEN)
Pennant announced their final results today for the year ended 31 December 2013. Their sales increased by 29% to £18.68m and operating profit was up substantially by 41.3% to £2,256k as operating margins increased from 11.0% last year to 12.1%.
Diluted EPS increased by 44% to 6.33p and the final dividend increased by 28.6% 1.8p making a full dividend for the year of 2.6p an increase of 30% over last year and covered 2.4x.
Free cash flow was the weak area in the results, producing an outflow of -£224k compared to FCF last year of £533k, management state this was due to "...a requirement for increased working capital during the year as major contracts progressed. Major stage payments are expected to reduce this requirement in the first half of 2014..." I can only assume that this accounts for the £1,832k increase in debtors, where the stage payments have been invoiced, but not yet received. So for the year, net cash reduced from £2,144k to £1,113k.
Management state that orders received during the year were worth in excess of £20m, which would produce an increased order book and a reasonably healthy book to bill ratio in excess of 1.07. Management in their outlook have said that "...the Group is currently actively involved in a number of significant opportunities with existing and prospective customers. These opportunities, together with the size and visibility from the current order book give confidence for the future..."
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