Pennant set to report year in line with expectations

19th Jan 2026 13:13

(Sharecast News) - Pennant International said in an update on Monday that it expects to report full-year results for 2025 in line with market expectations, as it entered 2026 with a significantly strengthened order book and growing confidence in the delivery of its three-year strategic plan.

For the year ended 31 December, Pennant expected to report revenue of £10m, down from £13.8m in 2024, with gross margins maintained at around 50%.

The AIM-traded group said its statutory loss before tax narrowed to £2.6m from £3m a year earlier, while net debt reduced sharply to £0.2m from £2.3m following the completion of its property disposal programme and the equity subscription and shareholder loan completed in September and October.

Annual recurring revenue from its Auxilium software products rose to a record £2.4m, up from £1.9m in 2024.

Pennant said its three-year contracted order book increased to £23.3m from £15.9m, with £9.7m scheduled for delivery in 2026, equivalent to around 75% of current market expectations for 2026 revenue.

The firm also secured contract wins within its training systems segment totalling up to £9.5m over the next three years, providing improved revenue visibility.

Progress continued across the Auxilium software suite during the year, with the successful integration of GenS and Analyzer completed and released to market in the first half.

The company said it expanded Auxilium into new territories including the Czech Republic, Denmark, Germany and Finland, and into adjacent industries such as shipping, robotics and space.

Pennant said the Auxilium user base grew by 8% during the year, supporting the increase in recurring revenues, and reiterated its expectation to invest between £1.2m and £1.4m annually in product development to maintain its integrated product support software offering.

The group also highlighted progress in its go-to-market strategy, including the signing of a global OEM partner agreement with Siemens Digital Industries Software and the appointment of sales representatives in South Korea, Japan and India, which it described as key growth markets.

Pennant said the rising focus within the global defence sector on integrated product support processes positioned the business well, building on longstanding relationships with Canadian and Australian defence forces.

Looking ahead, Pennant said software annual recurring revenue was expected to exceed £3m by the end of the 2026 financial year, supporting higher group margins, and that alongside the benefits of restructuring undertaken in 2024 and 2025, management expected the group to return to break-even adjusted profit before tax in 2026.

The company also expected to achieve positive operating cash flow, allowing ongoing investment in product development to be internally funded.

"2025 was a reset year for the Group following the major restructure of the training systems business," said chief executive Phil Walker.

"While unexpected delays to contract awards presented challenges and impacted performance, we made significant progress in delivering our strategic plan and converting orders."

He added that the group entered 2026 "with confidence, underpinned by a robust pipeline and clear market opportunities."

At 1157 GMT, shares in Pennant International were up 5% at 21p.

Reporting by Josh White for Sharecast.com.