Final Results

Pennant International Group PLC
2 May 2001

2nd May 2001



                       Pennant International Group plc,


 The Aim listed specialist in computer based training systems and logistical
support and data management software for the defence industry today announces
its preliminary results for the year ended 31st December 2000.

Highlights

  * Pre tax profit after exceptionals £231,000

  * Final Dividend 2.8p per share making a total of 4.2p for the year (1999:
    4.2p )

  * Acquisitions, loss-making at the time of purchase, successfully
    integrated and now profitable.

'The acquisition and establishment of our new logistics software and data
services divisions have been a particular success. Loss making businesses have
been turned around and this has resulted in exciting new opportunities for
Pennant. Across the group we now have strength in depth and a high level of
enquiries and tenders for new business. The residual effects of the defence
industry slow down continue to affect trading in our training systems company
but we expect a steady improvement in this area of our business.'

Joe Thompson, Chief Executive.

SUMMARY CHAIRMAN'S STATEMENT (Full text follows)

'We remain confident for further business development and growth. The broad
range of products we can now offer and the favourable reaction from customers
is already resulting in an increased number of significant enquiries. The
successful re-organisation and integration of the Solvera plc subsidiaries
which were acquired in December 1999 enables us to offer complementary
products and services in the field of Integrated Logistic Support to customers
worldwide, not just in defence and aerospace but also oil and gas, power,
transportation information technology and telecommunications. The company's
prospects remain good and I expect to see a return to a much higher level of
activity in the near future.' Christopher Powell, Chairman.

Full Chairman's Statement and financial details follow:

For further information, please contact:

Joe Thompson, Pennant International Group Plc:          Tel: [phone]

Ken Rees, Winningtons:                                  Tel: [phone]

                                                      Mobile: [phone]

Mike Coe, Rowan Dartington:                              Tel: [phone]

PENNANT INTERNATIONAL GROUP plc


CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2000

_____________________________________________________________________________


The principal achievements of 2000 have been significant product development
by Pennant Training Systems Limited and the successful reorganisation and
integration of the subsidiaries of Solvera plc, acquired in December 1999, now
trading as Pennant Information Services Limited and Pennant Information
Services Inc. Significant cost reductions have been achieved and the Group is
now able to offer complementary products and services in the broad field of
Integrated Logistic Support to customers worldwide, principally those in
defence and aerospace, but also in the oil & gas, power, transportation,
information technologies and telecommunications industries. The acquisitions
taken as a whole, which were loss making at the time of purchase, became
profitable during the group's first year of ownership.


Results and dividends

Group profit on ordinary activities before taxation, and after exceptional
items of £481,000 for the year ended 31 December 2000, was £231,000. Your
Board is recommending a final dividend of 2.8p per share which, together with
the interim of 1.4p, makes a total of 4.2p for the year (1999: 4.2p). The
final dividend is payable on 15 June 2001 to shareholders on the register on
11 May 2001.


On 29 March 2000 a placing of 1,066,000 Ordinary Shares at £1.875 was
completed raising £1,845,000 net of expenses. This has reduced gearing from
71% after the acquisition in December 1999 to 55% at 31 December 2000 and
funded capital expenditure and additional working capital.


Trading

In my interim statement I referred to a number of items which had an impact on
profits for the period to 30 June 2000. Pennant Information Services Inc. made
a loss of approximately £130,000 before exceptionals in the first half,
against management expectations of breakeven, but achieved a comparable profit
of £135,000 in the second half. Exceptional reorganisation costs for both the
UK and US acquisitions, originally estimated at £200,000 in total, amounted to
£334,000 in the first half and £481,000 for the full year. I am pleased to say
that these additional costs have resulted in greater ongoing savings than
expected. Profits in Pennant Training Systems Limited were reduced by
approximately £120,000 pending the outcome of negotiations between the
company, the prime contractor and the ultimate customer in respect of
additional work carried out on a major contract. I am pleased to report a
satisfactory outcome to these negotiations.

Development expenditure of £740,000 has been capitalised. This planned
expenditure to develop generic products relates to three items. First, the
operating system software for a core training systems product, CBT&VATS. This
generic media delivery and student management system is network ready and can
be employed in a variety of training applications. Secondly, the GenFly
product including the platform, which was provisionally written off in the
first half, and development of the systems software. Thirdly, development of
the new generation training management information system. There has been
significant interest in these products and further orders are expected in the
coming months.


I also referred to tender activity being at a satisfactory level, albeit some
major programmes were experiencing delays. This has continued and effected the
second half and more significantly the start of the current year. The delays
have occurred mainly as a result of changes within the Defence Procurement
Agency, the awaited publication of the Defence Training Review and
consolidation amongst the prime contractors. In particular, a major export
order for a training system where the prime contract, which was expected to be
signed in March 2001, was subject to delay at the last minute. Notwithstanding
these factors significant enquiries are being received, and negotiations
taking place, with a much broader customer base than hitherto. Pennant
Training Systems Limited is the operating subsidiary primarily affected as a
result of the substantial nature of its contracts. Manning levels are being
adjusted accordingly. This subsidiary has also been adversely affected by an
under recovery of overheads amounting to £270,000 on a Ministry of Defence
contract where problems occurred towards the end of the contract with tooling
and components supplied by an engineering sub-contractor. Alternative sourcing
and production methods have overcome the problem with a much improved end
product. A further order is expected shortly for operational enhancements to
the developed product.


Your Board is pleased with the trading levels being achieved by the UK and US
acquisitions and is confident of significant contributions from these
activities in the future. In support of this confidence the Group is at an
advanced stage of negotiation for the acquisition of the freehold of the
Southampton property occupied by Pennant Information Services Limited. The
property is expected to provide cost-effective accommodation for the
foreseeable future. In January 2001 we purchased the minority interest in
Pennant Information Services Inc. making the company a wholly owned
subsidiary. Pennant Information Services Limited was down-selected by the
Australian Department of Defence to provide software and related services to
all three services of the Armed Forces. To support full contract award later
this year, the group has formed a new subsidiary, Pennant Australasia Pty
Limited, which itself has purchased the defence division of Logistics Pty
Limited based, in Melbourne, Australia, on 17 April 2001.


Prospects

The group's trading performance for 2001 will be significantly affected by the
current delays in contract awards being experienced by Pennant Training
Systems Limited. Your Board believes these to be largely of a timing nature
which are expected to affect the first half of the year more significantly
than the second half. The current number of significant enquiries from a much
broader customer base than hitherto gives confidence for a return to a higher
level of activity in the near future. These delays whilst they continue, will
have an adverse effect on the company's trading performance. As a result
management expectations for the first half are breakeven at best. At this
stage it is your Board's intention to maintain the interim dividend for 2001
provided the improved business prospects show through as firm orders. Pennant
Information Services Limited is trading satisfactorily and Pennant Information
Services Inc. is expected to make an overall contribution for the year.


As a result of the delay in confirmed orders in Pennant Training Systems
Limited, work in progress is converting to cash in the first half of the year
thereby reducing overall gearing.


Conclusion

The acquisitions have been a great success and placed the group in a position
to offer integrated solutions to its increasing numbers of customers
throughout the world. The ability to offer integrated logistic support with a
solid background in the demanding defence and aerospace industries is creating
new opportunities in other industries. This, together with the newly developed
products, gives your Board confidence in the future.


Finally, a thank you to shareholders for supporting the placing in March 2000
and to my colleagues and all staff for their efforts throughout the year.


Christopher Powell

Chairman

1 May 2001






PENNANT INTERNATIONAL GROUP plc


GROUP PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 31 DECEMBER 2000
                                                            2000          1999
                                                               £             £
Turnover
Continuing operations                                  7,256,468     7,118,732
Acquisitions                                           6,937,753             -
                                                       _________     _________
                                                      14,194,221     7,118,732
Cost of sales                                        (7,912,322)   (3,100,487)
                                                         _______       _______

Gross profit                                           6,281,899     4,018,245
Administration expenses                              (5,370,457)   (2,910,7170
                                                        ________      ________

Operating profit
Continuing operations                                    600,904     1,107,528
Acquisitions                                             310,538             -
                                                        ________      ________
                                                         911,442     1,107,528

Cost of fundamental reorganisation                     (481,042)             -
                                                        ________      ________
Profit on ordinary activities before interest            430,400     1,107,528
Interest receivable and similar income                    28,500         3,689
Interest payable                                       (227,120)     (106,563)
                                                        ________      ________

Profit on ordinary activities before taxation            231,780     1,004,654

Tax on profit on ordinary activities                    (56,525)     (262,106)
                                                        ________      ________
Profit on ordinary activities after taxation             175,255       742,548
attributable to members of the
parent undertaking

Dividends                                               (337,512     (292,740)
                                                        ________      ________
Retained (loss)/profit for the year                    (162,257)       449,808
                                                        ________      ________
Earnings per share                                         2.25p        11.07p


The profit and loss account has been prepared on the basis that all operations
are continuing operations.





STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

FOR THE YEAR ENDED 31 DECEMBER 2000


                                                                  2000    1999
                                                                     £       £
Profit for the financial year                                  175,255 742,548
Currency translation differences on foreign currency net       (24,328)       -
investments
                                                               ________ ________
Total gains and losses recognised since last annual report     150,927 742,548
                                                               ________ ________






PENNANT INTERNATIONAL GROUP plc


GROUP BALANCE SHEET

AS AT 31 DECEMBER 2000

                                                          2000            1999
                                                             £               £
Fixed assets
Intangible assets                                    1,676,229       1,031,152
Tangible assets                                      2,891,742       3,111,857
Investments                                              6,135           6,135
                                                   ___________      __________
                                                     4,574,106       4,149,144
Current assets
Stocks                                               1,016,893       1,015,109
Debtors                                              5,313,588       4,099,746
Cash at bank and in hand                             1,153,375         767,422
                                                      ________        ________
                                                     7,483,856       5,882,277
Creditors: amounts falling due
within one year                                    (6,484,752)     (6,008,099)
                                                      ________        ________
Net current assets/(liabilities)                       999,104       (125,822)
                                                      ________        ________
Total assets less current liabilities                5,573,210       4,023,322
Creditors: amounts falling due
after more than one year                             (507,645)       (616,616)
                                                      ________        ________
                                                     5,065,565       3,406,706
                                                      ________        ________
Capital and reserves
Called up share capital                              1,847,200       1,634,000
Share premium                                        2,766,592       1,134,348
Profit and loss account                                451,773         638,358
                                                      ________        ________
Shareholders' funds
                                                     5,065,565       3,406,706
                                                      ________        ________



The financial statements were approved by the Board on 1 May 2001.

C C Powell                    J M Waller

Director                    Director






PENNANT INTERNATIONAL GROUP plc


BALANCE SHEET

AS AT 31 DECEMBER 2000

                                                          2000            1999
                                                             £               £
Fixed assets
Tangible assets                                         31,415               -
Investments                                          4,886,795       4,886,795
                                                      ________        ________
                                                     4,918,210       4,886,795
Current assets
Debtors                                              2,995,028       1,690,346
Cash at bank                                           973,319         274,291
                                                      ________        ________
                                                     3,968,347       1,964,637
Creditors: amounts falling due
within one year                                    (3,732,964)     (3,586,235)
                                                      ________        ________
Net current assets/(liabilities)                       235,383     (1,621,598)
                                                      ________        ________
Total assets less current liabilities                5,153,593       3,265,197
                                                      ________        ________
Capital and reserves
Called up share capital                              1,847,200       1,634,000
Share premium                                        2,766,592       1,134,348
Profit and loss account                                539,801         496,849
                                                      ________        ________
Shareholders' funds                                  5,153,593       3,265,197
                                                      ________        ________



The financial statements were approved by the Board on 1 May 2001.




C C Powell                    J M Waller

Director                    Director








PENNANT INTERNATIONAL GROUP plc


GROUP CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2000

                                                 Notes        2000         1999
                                                                 £            £
Net cash outflow (1999 inflow) from                  1
operating activities                                     (484,744)      680,242
Returns on investments and servicing of finance      2   (198,620)    (102,874)
Taxation                                                 (248,818)     (60,442)
Capital expenditure                                  2   (955,747)    (763,938)
Acquisitions and disposals                           2           -  (1,447,234)
Equity dividends paid                                    (307,617)    (256,029)
                                                          ________     ________
Cash outflow before financing                           (2,195,546  (1,950,275)

Financing                                            2   1,643,066    2,101,494
                                                          ________     ________

Decrease (1999 increase) in cash                     4   (552,480)      151,219
                                                          ________     ________






PENNANT INTERNATIONAL GROUP plc


NOTES TO THE GROUP CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2000

1     Reconciliation of group operating profit to net cash      2000      1999
      inflow
      from operating activities                                    £         £
      Operating profit                                       911,442 1,107,528
      Exceptional item                                     (481,042)         -
      Depreciation                                           438,164   273,130
      Loss on sale of tangible fixed assets                      604     3,144
      Amortisation of intangible fixed assets                 95,079    55,258
      Increase in stocks                                     (1,784) (380,937)
      Increase in debtors                                (1,213,842) (1,054,820)
      Decrease (1999 increase) in creditors                (206,131)   676,939
      Other movements                                       (27,234)         -
                                                          __________ ___________
      Net cash outflow (1999 inflow) from operating        (484,744)   680,242
      activities
                                                             _______   _______

2     Analysis of cash flows for headings netted                2000      1999
      in the cash flow statement                                   £         £
      Returns on investments and servicing of finance
      Interest received                                          440     3,689
      Interest paid                                        (227,120) (106,563)
      Currency translation profit                             28,060         -
                                                             _______   _______
      Net cash outflow for returns on investments          (198,620) (102,874)
      and servicing of finance                               _______   _______

      Capital expenditure
      Payments to acquire intangible fixed assets          (740,000)  (19,875)
      Payments to acquire tangible fixed assets            (250,927) (762,769)
      Receipts from sales of tangible fixed assets            35,180    18,706
                                                             _______   _______

      Net cash outflow for capital expenditure             (955,747) (763,938)
                                                             _______   _______

      Acquisitions and disposals
      Purchase of subsidiary undertakings                          - (1,096,895)
      Net overdrafts acquired with subsidiary undertakings         - (350,339)
                                                             _______ _________

      Net cash outflow for acquisitions and disposals              - (1,447,234)
                                                             _______ _________
      Financing
      Issue of ordinary share capital                      1,998,750   615,950
      New loans and hire purchase contracts                   90,941 1,866,017
      Repayment of hire purchase and finance leases        (199,894) (131,319)
      Repayment of loans                                    (93,425) (241,995)
      Expenses paid in connection with share issue         (153,306)   (7,159)
                                                             _______ _________
      Net cash inflow from financing                       1,643,066 2,101,494
                                                             _______ _________





PENNANT INTERNATIONAL GROUP plc


NOTES TO THE GROUP CASH FLOW STATEMENT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2000

3 Analysis of net debt
                                                              Other
                                     1 January       Cash  non-cash 31 December
                                          2000       flow   changes        2000
                                             £          £         £           £

Cash in hand and at bank               767,422    385,953             1,153,375
Bank overdraft                       (846,770)  (938,433)           (1,785,203)
                                               __________
                                                (552,480)
Hire purchase due within one year    (133,457)    108,953  (48,595)    (73,099)
Hire purchase due after one year      (75,442)          -    48,595    (26,847)
Loans due within one year          (1,600,532)     93,425  (75,915) (1,583,022)
Loans due after one year             (541,174)          -    75,915   (465,259)
                                       _______    _______ _________     _______
                                   (2,429,953)  (350,102)         - (2,780,055)
                                     _________    _______ _________     _______


4 Reconciliation of net cash flow to movement in net           2000        1999
debt
                                                                  £           £
Decrease (1999 increase) in cash in the year              (552,480)     151,219
Cash to repurchase debt                                     293,319     373,314
                                                            _______     _______
Change in net debt resulting from cash flows              (259,161)     524,533
New loans and hire purchase contracts                      (90,941) (1,866,017)
Debt acquired with subsidiary undertakings                        -    (69,155)
                                                          _________    ________
Movement in net debt in the year                          (350,102) (1,410,639)
Opening net debt                                        (2,429,953) (1,019,314)
                                                           ________    ________
Closing net debt                                        (2,780,055) (2,429,953)
                                                           ________    ________