Final Results

Pennant International Group PLC
18 April 2005


                         PENNANT INTERNATIONAL GROUP PLC
                    RESULTS FOR YEAR ENDED 31 DECEMBER 2004


Pennant International Group plc, listed on AIM, is a leading supplier of
technology solutions to the defence and industrial sectors, including specialist
software, technical data services and data management systems, simulation and
training systems.


CHAIRMAN'S STATEMENT

Results for the year to December 2004 were in line with expectations as revised
at the time of my Interim Statement. The first half held up well despite delays,
outside the Group's control, in programmes and contract awards but these had an
impact upon the second half and will continue to affect the first half of the
current year. I am pleased, however, to report that the rescheduling of
programmes and an increase in contract awards since the year end should see an
improvement in the second half with the Group achieving expectations for 2005 as
a whole.


RESULTS AND DIVIDEND

Group profit on ordinary activities before taxation was £103,283 (2003:
£711,498) after restructuring costs of £130,689.

As expected, there has been an outflow of cash of £1,150,565 that has resulted
from the repayment of £505,830 of loans ahead of schedule, and the unwinding of
upfront contract payments received at the end of 2003. Net debt was £358,281
(2003: net cash £140,361). Gearing was 9.6% (2003: nil)

Basic earnings per share were 0.32p (2003: 2.08p).

Your Board is recommending a final cash dividend of 0.27p per share (2003: 0.4p)
that, together with the interim dividend of 0.13p, gives a total dividend for
the year of 0.4p (2003: 0.4p). The final dividend will be paid on 27 May 2005 to
shareholders on the register at the close of business on 6 May 2005. The shares
are expected to go ex dividend on 4 May 2005.

The cash dividend reflects your Board's confidence in the future having regard
to improved trading and current prospects.


BOARD AND STRATEGY

As set out in my Interim Statement, Christopher Snook stepped up to assume the
appointment of Chief Executive with effect from 1 January 2005, taking over from
Joe Thompson who has been retained as a consultant until 31 December 2006. Your
Board has continued to review strategy in order to improve profitability and
shareholder value. The focus is to concentrate on the core strengths of each of
the Group's businesses, to identify new markets appropriate for those core
strengths and to build on the good established relationships with existing
customers by gaining a better understanding of their requirements. We are also
structuring operations in order to continue to achieve the efficiency and
quality necessary to meet customers' expectations. It is clear that the major
prime contractors are looking for longer term relationships with a smaller
number of preferred suppliers and the Group's businesses have been working to
maximise opportunities here.


CURRENT TRADING AND OPERATIONS


Training Systems

Pennant Training Systems is a provider of market-leading training solutions for
the defence, aviation and industrial markets. Its products, which are well
respected by the market, include simulation training systems, computer based
training and emulation.

Pennant Training Systems has experienced a high level of tendering activity and
has reached the final stages of selection, either in its own right or in
conjunction with prime contractors, for significant programmes that are maturing
in the short to medium term or are already funded and running. It is building
relationships for the longer term with PFI (Private Finance Initiative)
contractors with a view to securing future revenue streams. Also, there is
considerable interest shown in overseas markets for existing Pennant products.

The MOD enabling contract that generates significant income from the provision
of support to the many Pennant Training devices throughout the UK has been
extended for a year to April 2006, with an option for a further two one-year
extensions.  A number of upgrades to existing equipment have been carried out in
2004 under this contract.

Two major training devices were successfully delivered, on time and to budget,
to Westland Helicopters Ltd in support of its Lynx 300 programme. The devices
were well received by both Westland and the ultimate customer.

The largest single project running during the year was the BAE SYSTEMS Hawk
Lead-in Fighter Trainer programme for The South African Air Force; the
production phase is in progress and runs into the first half of 2006. Additional
work to bring the training material up to the final technical standard of the
aircraft is expected later this year.

The company has continued to provide support, through a BAE SYSTEMS contract, to
the Royal Australian Air Force. This contract runs until the middle of 2006 and
discussions have already begun for an extension of a further 5 years.

Technical Data Services is a major supplier of technical documentation, support
products and information systems. Its capabilities cover e-learning, technical
authoring, graphics design, technical manuals, interactive electronic technical
manuals, SGML/XML and internet/intranet publishing and on-site data services.

Technical Data Services benefits from a number of enabling and framework
agreements with the MOD, other Government bodies and major contractors that
generate a significant and continuing revenue stream. The MOD contracts have
been extended to March 2007 with an option to extend for a further 2 years.

New customers have been won, particularly in the Rail sector, with significant
orders for technical manuals and training from Kawasaki in the USA and Japan and
from Interfleet Technology Limited in the UK.  Work has also been carried out
for BT in both the telecommunications and IT arenas and e-learning products have
been developed for the Department of Work and Pensions.. There is significant
additional business potential from these customers.


New Joint Venture -Pennant Sonovision ITEP Limited

This 50:50 joint venture company was set up in February 2005 as a logical
progression to the teaming agreement signed between Pennant and Sonovision-ITEP
SAS in 2003 and in response to the requirements of European projects in the
aerospace and defence sectors involving French and UK companies. It will
initially concentrate on providing technical data services for programmes for
Airbus aircraft, including the A380, A400M and A350. The joint venture company
will be based in Filton, Bristol the UK headquarters of Airbus.


Software Services

Pennant's OmegaPS product is a world leading supportability engineering software
suite that is widely used by defence forces and defence contractors around the
world.

In Australia, the product has been developed for the Australian Defence
Organisation in a programme running through 2003 and 2004. The product was
accepted in March 2005 and is due to be rolled out across Australian Defence
Force establishments later in the year. Pennant has a support contract to assist
the introduction and implementation generating revenues through until 2009.

In Canada, Pennant provides consultancy services to the Canadian Department of
National Defence (DND), first to support the ten year rollout of a SAP R/3
management system, that includes OmegaPS, to the three branches of the armed
forces and, secondly to support the use of OmegaPS throughout the DND.

In addition Software Services has a significant annual maintenance income from
support contracts for the OmegaPS applications in use by contractors and
government departments in many countries.

These revenue streams are augmented by new licence sales to new and existing
customers. In 2004 sales were made to, among others, Northrop Grumman in the
USA, Blohm & Voss in Germany, Mercedes Benz in Canada and BAE SYSTEMS in
Australia.


PROSPECTS

As outlined above Pennant Training Systems, in particular, has a pipeline of
significant opportunities. These have to be won and are subject to competition
and to schedules that may be changed, but they are well advanced in the
procurement cycle and are expected to mature in the short to medium term. A
number of these opportunities are with existing customers with whom we have good
relationships and to whom we have previously demonstrated our ability to deliver
a reliable product on time and to budget.

The Technical Data Services business has opportunities to develop follow-on
potential with its substantial new customers. Also, there are major
opportunities with existing customers such as BAESYSTEMS and General Dynamics.
The new joint venture company is expected to contribute as it builds its
relationships with Airbus and other customers.

Software Services has a number of potential product sales to build on its firm
base of consultancy and maintenance revenues.


CONCLUSION

2004 was a tough year and business will continue to be tough and competitive.
Nevertheless, the Group has a clear strategy and high quality committed staff.
The Group's businesses are positioned to take advantage of opportunities as they
arise. Order intake in 2005 has started well with some good contract wins in the
first quarter that underpin the second half of 2005 running into 2006. Also,
there are significant real prospects in the pipeline following major programme
wins by our largest customers. These factors give your Board confidence for
progress in the future.

Finally, my sincere thanks to my colleagues and all employees for their sterling
efforts and to Joe Thompson for his valuable contribution to the Group.


Christopher Powell
Chairman


For further information contact:

Christopher Snook, Chief Executive, Pennant International Group plc on 01452
714914

Barrie Newton, Rowan Dartington & Co, Limited on 0117 933 0011


GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2004
                                                                                               2004                2003
                                                                                                  £                   £

Turnover                                                                                 11,550,645          11,879,580

Cost of sales                                                                           (7,332,524)         (7,064,508)

Gross profit                                                                              4,218,121           4,815,072
Administration expenses                                                                 (4,035,503)         (4,165,665)
Other operating income                                                                            -               5,616

Operating profit                                                                            182,618             655,023

Profit on sale of property                                                                        -             163,729

Profit on ordinary activities before interest                                               182,618             818,752
Interest receivable and similar income                                                        6,332              13,005
Interest payable                                                                           (85,667)           (120,259)

Profit on ordinary activities before taxation                                               103,283             711,498

Tax on profit on ordinary activities                                                        (2,457)            (46,340)

Profit on ordinary activities after taxation attributable to members of the parent          100,826             665,158
undertaking - retained

Dividends                                                                                 (128,000)           (128,000)

Deficit (2003 retained profit) for the year                                                (27,174)             537,158

Earnings per share
Basic                                                                                         0.32p               2.08p
Diluted                                                                                       0.29p               1.93p



GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31 DECEMBER 2004
                                                                                                2004               2003
                                                                                                   £                  £

Profit for the financial year                                                                100,826            665,158
Currency translation differences on foreign currency net investments                        (56,289)            (7,386)

Total gains and losses recognised since last annual report                                    44,537            657,772



GROUP BALANCE SHEET
AS AT 31 DECEMBER 2004

                                                                                               2004                2003
                                                                                                  £                   £

Fixed assets
Intangible assets                                                                         1,060,569           1,273,960
Tangible assets                                                                           2,670,671           2,628,813
Investments                                                                                   6,135               6,135

                                                                                          3,737,375           3,908,908
Current assets
Stocks                                                                  510,860                                 514,165
Debtors                                                               1,719,936                               2,204,782
Cash at bank and in hand                                              1,242,152                               1,965,649

                                                                      3,472,948                               4,684,596

Creditors: amounts falling due within one year                      (2,516,960)                             (3,687,326)

Net current assets                                                                          955,988             997,270

Total assets less current liabilities                                                     4,693,363           4,906,178

Creditors: amounts falling due after more than one year                                 (1,050,091)         (1,179,443)

Provisions for liabilities and charges                                                            -                   -

                                                                                          3,643,272           3,726,735

Capital and reserves
Called up share capital                                                                   3,045,400           3,045,400
Share premium                                                                             3,563,504           3,563,504
Profit and loss account                                                                 (2,965,632)         (2,882,169)

Shareholders' funds                                                                       3,643,272           3,726,735



GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2004
                                                                                                2004               2003
                                                                                                   £                  £

Net cash (outflow)/inflow from operating activities                                          (7,917)          1,726,030

Returns on investments and servicing of finance                                             (79,335)          (107,254)

Taxation                                                                                    (19,202)            (3,248)

Capital expenditure                                                                        (222,588)            263,300

Acquisitions and disposals                                                                         -          (127,200)

Equity dividends                                                                           (169,600)                  -

Cash (outflow)/inflow before financing                                                     (498,642)          1,751,628

Financing                                                                                  (651,923)          (385,244)

(Decrease)/increase in cash                                                              (1,150,565)          1,366,384



NOTES TO THE FINANCIAL STATEMENTS 
FOR THE YEAR ENDED 31 DECEMBER 2004

Earnings per share

Earnings per share has been calculated by dividing the profit attributable to
shareholders by the weighted average number of ordinary shares in issue during
the year as follows:


                                                                                            2004                  2003
                                                                                               £                     £

Profit after tax attributable to shareholders                                            100,826               665,158

                                                                                          Number                Number

Weighted average number of ordinary shares in issue during the year                   32,000,000            32,000,000
Diluting effect of share options                                                       2,564,500             2,495,500

Diluted average number of ordinary shares                                             34,564,500            34,495,500

Earnings per share                                                                             p                     p

Basic                                                                                       0.32                  2.08

Diluted                                                                                     0.29                  1.93



Annual Report

The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2004 or 2003.  The financial
information for 2003 is derived from the statutory accounts for 2003 which have
been delivered to the Registrar of companies.  The auditors have reported on the
2003 accounts; their report was unqualified and did not contain a statement
under section 237(2) or (3) of the Companies Act 1985.  The statutory accounts
for 2004 will be finalised on the basis of the financial information presented
by the Directors in this preliminary announcement and will be delivered to the
Registrar of companies following the Company's Annual General Meeting.



                      This information is provided by RNS
            The company news service from the London Stock Exchange