Interim Results

Pennant International Group PLC
06 September 2005

                        PENNANT INTERNATIONAL GROUP PLC
                        ANNOUNCEMENT OF INTERIM RESULTS


CHAIRMAN'S STATEMENT

Results for the first half are in line with expectations and the year to date
has seen a satisfactory order intake including the recent selection of Pennant
Training Systems Limited by BAE Systems for a multi million pound contract to
deliver a Computer Aided Learning System to a major customer.


As the result of orders received and the rescheduling of previously delayed
programmes, I am also pleased to report there will be an improvement in the
second half which should see the Group achieving expectations for 2005 as a
whole.


RESULTS AND DIVIDEND

Group profit on ordinary activities before taxation was £53,000 (June 2004:
£279,000). This includes £17,000 being the Group's share of the profits of the
joint venture with Sonovision set up in February 2005.


During the period there was a net cash outflow of £460,000 resulting from the
financing of work in progress. However, this outflow is expected to be reversed
in the second half and early in 2006. Net debt at 30 June 2005 was £769,000
(June 2004:£930,000) representing gearing of 21% (June 2004: 23%). Basic
earnings per share were 0.16p (June 2004: 0.87p).


Your Board is declaring a maintained interim cash dividend of 0.13p per share
(June 2004: 0.13p). The dividend will be paid on 18 November 2005 to
shareholders on the register at the close of business on 21 October 2005. The
shares are expected to go ex dividend on 19 October 2005.



STRATEGY


Our strategy of concentrating on the core strengths of each of the Group's
businesses, finding new customers and working to capitalise on the good
relationships with existing customers is beginning to prove successful. This
success is manifested in positive ongoing discussions with potential new
customers and a high level of tendering, particularly in the defence and rail
sectors. These discussions and the tendering activity have been in respect of
elements of work both for contracts already won by the prime contractors and
also in support of their tenders for longer term major prospects.



CURRENT TRADING AND OPERATIONS


Pennant Training Systems has traded profitably during the period and has had a
number of successes including:



•    selection for a multi million pound contract to deliver a
     Computer Aided Learning System to a major customer;

•    an extension, by one year with options for a further 2 one year 
     extensions, of the MOD enabling contract that generates significant
     income from the support of the many Pennant Training devices in use 
     throughout the UK;

•    the acceptance of two electronic classrooms supplied on time and to 
     budget, as part of the Hawk Lead in Fighter Trainer programme for the 
     South African Air Force. Production of computer based training (CBT) and
     emulation software continues into the first half of 2006.  A follow on 
     contract is expected to bring the training material up to the final 
     technical standard of the aircraft;

•    a contract to provide additional courseware for the CBT system used 
     by the Royal Australian Air Force for Hawk jet training;

•    selection, teamed with Carley Corporation, by Northrupp Grumman 
     Corporation for a contract to provide CBT development support to the
     F-35 Joint Strike Fighter programme;

•    the award of a contract to supply an Air Weapons Procedures Trainer 
     to an overseas air force.  The computer based system will emulate 
     weapons loading procedures on a variety of current aircraft; and

•    contracts to supply ten additional hand skill trainers to the 
     Royal Air Force and to supply an upgrade to CBT for a Bridge Vehicle 
     for the United States Army.


The directors believe that Pennant Training Systems products and services are
highly regarded by end users and that its relationships with customers are
excellent.


Technical Data Services has had major contract wins, principally in the rail
sector. Pennant Information Services Ltd was selected by Kawasaki Heavy
Industries Ltd to produce a full suite of maintenance manuals and training
support in connection with the railcars for Taipei City and by Kawasaki Rail
Cars Inc. to produce technical information manuals for the Boston Blue Line
train system. It also received an order from Interfleet Technology Limited for
training related to the Singapore Circle Line rail system.


Other contracts won include two e-learning packages for the Department of Work
and Pensions, the production of Flight Reference Cards for McAlpine Helicopters
and an extension to the training delivery contract from Powerfield Limited (a
Rolls Royce company) in support of their Field Electrical Power Source
equipment.


The business continues to be underpinned by sole source and enabling contracts
with the MOD and a number of prime contractors


Joint Venture - Pennant Sonovision -ITEP Ltd

The joint venture's first period of trading, providing technical data services
to Airbus, has been successful and profitable. Premises have been obtained in
Filton, Bristol and the company is building its relationships with Airbus and UK
suppliers to Airbus.


Software Services:  Product sales have been made to new customers including:
Qantas Defence Services, Australian Aerospace Ltd, Oerlikan Contraves AG,
Rheinmetal Defence Electronics GmbH, Quorum Logistic Support Limited and Bath
Iron Works (part of General Dynamic's naval operations).


In Canada, Pennant continues to provide consultancy and support services in
respect of the use of OmegaPS products throughout the Department of National
Defence (DND). In this regard a major support contract with DND has been
extended to September 2006 with options for 4 further years.


In Australia, the new development of Pennant's OmegaPS, Publisher and Analyser
software for the Australian Defence Organisation was accepted in March 2005.
Since then further paid enhancements have been undertaken. The product will be
rolled out to Australian Defence Force establishments later in the year. Pennant
has a support contract generating revenues through until 2009.



CONCLUSION


The Group's performance in the first half has been in line with expectations and
the order intake has been satisfactory underpinning the second half of 2005 and
into 2006. We are working closely with both existing and new customers to secure
work for the medium term. The Group's cash position remains satisfactory and the
balance sheet is strong. These factors give your Board confidence for the
future.




Christopher Powell
Chairman




            Pennant International Group plc
            CONSOLIDATED PROFIT AND LOSS ACCOUNT

                                                               Six months        Six months              Year
                                                                    ended             ended             ended
                                                                  30 June           30 June            31 Dec
                                                                     2005              2004              2004
                                                  Notes             £'000             £'000             £'000

Turnover

Group and share of joint venture                                    5,298             6,368            11,551
Less: Share of joint venture                          2              (82)                 0                 0
Group turnover                                                      5,216             6,368            11,551


Cost of sales                                                     (3,138)           (3,960)           (7,333)


Gross profit                                                        2,078             2,408             4,218


Net operating expenses                                            (2,000)           (2,090)           (4,035)


Operating profit                                                       78               318               183

Share of joint venture's operating profit             2                17                 0                 0


Profit on ordinary activities before interest                          95               318               183

Interest                                                             (42)              (39)              (80)

Profit on ordinary activities before taxation

                                                                       53               279               103

Taxation                                              3               (3)                 0               (2)

Profit attributable to ordinary shareholders                           50               279               101

Ordinary dividends declared                                          (87)             (128)             (170)

Amount transferred to reserves                                       (37)               151              (69)

Earnings per share                                    4

Basic                                                               0.16p             0.87p             0.32p
Diluted                                                             0.14p             0.81p             0.29p

Statement of Total Recognised
Gains and Losses
Profit for the period                                                  50               279               101
Currency translation differences on foreign
currency net investments                                               24               (9)              (56)
                                                                    
                                                                       74               270                45



Pennant International Group plc
SUMMARISED CONSOLIDATED BALANCE SHEET

                                                 As At          As at              As at              As at
                                  Note         30 June        30 June            30 June             31 Dec
                                                  2005           2005               2004               2004
                                                 £'000          £'000              £'000              £'000
Fixed assets

Intangible assets                                                 966              1,132              1,060
Tangible assets                                                 2,598              2,745              2,671
Investment in joint venture       2
     Share of gross assets                          86
     Share of gross liabilities                   (67)
                                                                   19                  0                  0
Investments                                                         6                  6                  6

                                                                3,589              3,883              3,737
Current assets

Stocks                                                            631                844                511
Debtors                                                         2,457              2,671              1,720
Cash at bank and in hand                                          355                314                815

                                                                3,443              3,829              3,046


Creditors: amounts falling due within one year                (2,320)            (2,601)            (2,003)


Net current assets                                              1,123              1,228              1,043

Total assets less current liabilities                           4,712              5,111              4,780


Creditors: amounts falling due after more than one year          (995)            (1,114)            (1,050)

Provisions for liabilities and charges                              0                  0                  0


                                                                3,717              3,997              3,730

Called up share capital and share premium account               6,609              6,609              6,609
Reserves                                                      (2,892)            (2,612)            (2,879)

Shareholders' funds                                             3,717              3,997              3,730





Pennant International Group plc
CONSOLIDATED GROUP CASH FLOW

                                                               Six months        Six months             Year
                                                                    ended             ended            ended
                                                                  30 June           30 June           31 Dec
                                                                     2005              2004             2004
                                                     Notes          £'000             £'000            £'000

Cash flow from operating activities                                 (208)             (705)              (8)
Returns on investment and servicing of finance                       (42)              (39)             (79)
Taxation                                                             (38)                 0             (19)
Capital expenditure                                                  (31)             (198)            (222)
Investment in joint venture                              2            (5)                 0                0
Equity dividends                                                     (87)             (128)            (170)

Cash Outflow before Financing                                       (411)           (1,070)            (498)

Financing
     Issue of ordinary share capital                                    0                 0                0
     Other financing                                                 (49)             (582)            (652)

Decrease in net cash                                                (460)           (1,652)          (1,150)


Reconciliation of net cash flow to movement in net debt

Decrease in net cash                                                (460)           (1,652)          (1,150)
Cash to repurchase debt                                                49               582              652
New loans and hire purchase contracts                                   0                 0                0

Movement in net debt in period                                      (411)           (1,070)            (498)

Net debt at beginning of period                                     (358)               140              140
Net debt at end of period                                           (769)             (930)            (358)



Reconciliation of operating profit to cash flow from
operating activities

Operating profit                                                       78               318              183
Depreciation                                                          106                82              191
Amortisation of intangible assets                                     101               125              207
Profit on sale of fixed assets                                        (1)                 0             (11)
(Increase)/decrease in work in progress and debtors                 (857)             (796)              482
Increase/(decrease) in creditors                                      349             (442)          (1,011)
Other movements                                                        16                 8             (49)
                                                                    (208)             (705)              (8)


Pennant International Group plc
Notes to Interim Statement


1.  This interim statement, which is neither audited nor reviewed, has been 
    prepared on the basis of the accounting policies set out in the Group's
    2004 annual report and financial statements, revised to incorporate the
    provisions of FRS21. As a result the ordinary dividends noted in the
    consolidated profit and loss account are those declared in the respective
    periods. The balance sheet at 31 December 2004 and the results for the year 
    then ended have been abridged from the Group's annual report and financial 
    statements which has been filed with the Registrar of Companies: the 
    auditors' opinion on the financial statements was unqualified.


2.  On 14 February 2005 the Group invested £5000 to acquire 50% of the ordinary 
    shares of Pennant Sonovision ITEP Limited a joint venture company. The
    investment has been accounted for using the gross equity basis. The 
    consolidated profit and loss account includes the Group's share of the 
    profits of the joint venture while the Group's share of the gross assets 
    and gross liabilities is shown in the consolidated balance sheet.


3.  The taxation charge relates to the Group's share of the profits of the 
    joint venture. There is no charge in respect of the profits of the Group as
    no charge is expected for the full year.


4.  The calculation of earnings per share is based on the profit attributable 
    to the shareholders and the weighted average number of shares as set out 
    below:


                                                          Six months         Six months               Year
                                                               ended              ended              ended
                                                             30 June            30 June             31 Dec
                                                                2005               2004               2004
                                                                   £                  £                  £


Profit attributable to shareholders                           50,000            279,000            101,000

                                                              Number             Number             Number
Basic weighted average number of shares                   32,000,000         32,000,000         32,000,000

Employee share options                                     2,844,500          2,385,500          2,564,500

Diluted weighted average number of shares                 34,844,500         34,385,500         34,564,500

                                                             p/share            p/share            p/share
Basic                                                           0.16               0.87               0.32
Diluted                                                         0.14               0.81               0.29


This announcement is being circulated to all shareholders of the Company and
copies will be available to the public at the Company's Registered Office at
Pennant Court, Staverton Technology Park, Cheltenham GL51 6TL



For further information contact:

Christopher Snook, Chief Executive, Pennant International Group Plc 
on 01452 714 914

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


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