Pennant cuts revenue expectations after MoD contract delay

(Sharecast News) - Pennant International warned on Friday that its full-year revenue was now expected to fall below market expectations after a key Ministry of Defence contract was pushed back to 2026 or later due to new internal approval processes.

In a trading update for the six months ended 30 June, the AIM-traded software and training systems company reported a sharp drop in revenue to £4.5m from £7.4m a year earlier.

Gross margins narrowed slightly to 45%, while adjusted losses before tax widened to £1.7m from £0.4m.

The group previously expected the GenFly technology upgrade contract to contribute up to 15% of full-year revenue, with an award anticipated in August.

However, Pennant now said the deal was unlikely to be finalised before the fourth quarter at the earliest.

"While it is disappointing that the GenFly contract will start later than expected, we will push to secure the award as soon as possible, while keeping focus on implementing our Auxilium strategy to achieve long-term growth in our software and services segments," said CEO Phil Walker.

"It was pleasing to see the early fruits of these efforts in the achievement of record-level annual recurring revenue during the first half."

Recurring annual revenue from the Auxilium software suite and related maintenance had grown to £2.1m, with further sales opportunities and new distribution partners expected to support growth into 2026 and beyond.

Contracted revenues for 2025 currently stood at around £9m.

Pennant said it would publish its interim results on 16 September.

At 1219 BST, shares in Pennant International were down 12.06% at 24.62p.

Reporting by Josh White for Sharecast.com.