Pennant International Group plc (LON:PEN) Chief Executive Officer Phil Walker caught up with DirectorsTalk for an exclusive interview to discuss the key takeaways for investors from their latest update and whether this news represents a change in fortune for the company.
Q1: Phil, what are the key takeaways for investors on the impact of this announcement and the future prospects for Pennant International?
A1: The announcement is fantastic news for thee Group but it really has three key impacts, performance, resource & planning and a new customer so I’ll take those in turn.
From a performance perspective, in our January trading update released to the stock exchange, we announced a period-end order book of about £22 million over the next three years which included £10 million for delivering the current year. After today’s announcement, our three-year order has now grown to in excess of £32 million which includes over £13 million for this year which is about 80% of our market expectations which is a fantastic position to be in at the start of the year. Equally, importantly, it’s given us great visibility for 2023 so it’s a great place to be.
The second point, in terms of resource and planning, I think from a business point of view has been very hard to forecast the requirements and needs going forward. The Group, outside of UK, has been performing very well, growing in North American and Australasia but the UK business has suffered particularly over the last 18 months, in terms of business wins. This contract gives us visibility around resourcing requirements, facility utilisation and it secures 50 skilled jobs in the UK which is great for our team.
Leading on from that, the third impact from this which is really the most important from my perspective is morale. The business has had a real difficult period and this has been a real boost to the team across the UK and around the world to get that visibility of a major contract with a new customer. It comes on the back of a couple of smaller wins as well, we’ve won our second commercial aerospace customer which is part of our strategy to grow civil and we’ve won some more work in the rail business.
So, in terms of future prospects, this all bodes well for a prosperous period.
Q2: Do you think this news represents a change in fortunes for Pennant International?
A2: Yes, I do. I think from a business perspective, since about October 2021, we’ve seen a shift in momentum, whether it’s exiting the pandemic or people feeling more confident but there’s been a degree of optimism in the business, particularly in the management team and the Board. However, there’s been nothing tangible, no real evidence to show or justify that hard work of our employees and the business so this announcement really starts to show the dividends of what we’ve been doing. We are feeling cautiously optimistic that this news, on top of what we already have, builds a really solid foundation for this business.
I must make reference to what’s going on in Ukraine, and in the backdrop of the insurgency, it’s devastating news and very upsetting by what’s going on but ultimately, we operate in a sector that, in the medium term, will potentially be a benefactor of what’s going on.
