Annual Results Presentation 2024

APRIL 2025

FULL YEAR RESULTS TO 31 DECEMBER 2024

Copyright 20245 © Pennant International Group Plc. All other trademarks are the property of their respective owners.

- CONFIDENTIAL

3 Copyright 2025 © Pennant International Group Plc. All other trademarks are the property of their respective owners.

• 2024 results in line with market expectations

• Launched Auxilium software

• Repositioned for growth - decisive action taken, pivot towards highly scalable Software and Technical Services model

• Training Systems business streamlined

• Introduced regional operating model

• Developing 'go to market' channels

• Significantly strengthened the Board

- CONFIDENTIAL

4 Copyright 2025 © Pennant International Group Plc. All other trademarks are the property of their respective owners.

Copyright 2025 © Pennant International Group Plc. All other trademarks are the property of their respective owners.

Group aspirations:

• Auxilium software to be the systems support enterprise solution of choice

• Increase market share at an improved rate of return with a high operating cash conversion in chosen markets

GLOBAL BUSINESS

UK (HQ), Canada,

USA, Australia

100+

Employees

REVENUE

80% Defence, 10% Rail,

10% Aerospace

GEOGRAPHIES

(% REV)

53% EMEA, 27% APAC, 20% NA

To maximize operational efficiency at optimal cost

We address the market through three key segments:

Integration

Common data repository Single source of truth that ensures traceability and integrity, that support a range of global standards & specifications

Configuration

Logistic Support Analysis (LSA) improves the availability and reliability of systems, by ensuring that maintenance and support are well-planned to optimise cost

Analysis

Model-based supportability and analysis tool to make informed decisions for an

asset's life cycle support

solution

Authoring & Publishing

For rapid creation of S1000D and ATA Technical manuals, published in PDF or IETP

- CONFIDENTIAL

1. Copyright 2025 © Pennant International Group Plc. All other trademarks are the property of their respective owners.

   
   
   

   OUR SOLUTIONS IN ACTION

   "We ensure mission critical systems are where they are needed, when they are needed and that they work."

2. Copyright 2025 © Pennant International Group Plc. All other trademarks are the property of their respective owners.

Copyright 2025 © Pennant International Group Plc. All other trademarks are the property of their respective owners.

• Trading results in line with market expectations

• Adjusted EBITA of £1.2m, down 34% on prior year

• Successfully completed the delivery under a 3-year contract with Boeing Defence UK for updates to AH Mk1 Apache training equipment -revenue recognised, in the Training Systems segment, in year £3.5m (2023: £5.2m)

• Software & Services (recurring and repeatable revenue) stable at £9.6m (2023: £9.6m) and 69% of Group total

• Gross profit margin for the Period of 50% (2023: 50%)

• Capitalised investment into Auxilium software of £1.4m funded by H1 equity raise

• Post Period-end, the Group has taken actions to strengthen the balance sheet and ensure that ongoing operations are appropriately funded

  (1) Adjusted to exclude one off or non-recurring items - see next slide for reconciliation

  STATUTORY INCOME STATEMENT

  Income Statement
  £m		2024	2023
  Revenue		13.8	15.5
  Cost of sales		(6.9)	(7.8)
  Gross Profit		6.9	7.7
  	Exceptional costs	(2.3)	(0.3)
  	Profit on sale of Land & Buildings	0.2	-
  	Other administrative expenses	(7.6)	(7.5)
  Administrative expenses		(9.7)	(7.8)
  Other income		0.2	0.2
  Operating Loss		(2.6)	0.1
  Net Finance costs		(0.4)	(0.5)
  Loss before taxation		(3.0)	(0.4)
  Tax credit / (charge)		0.5	(0.6)
  Loss for the year		(2.5)	(1.0)

  RECONCILIATION BETWEEN STATUTORY & ADJUSTED RESULTS

  Reconciliation statutory to adjusted EBITA
  £m	2024
  Statutory EBITA (operating loss less amortisation charges)	(1.0)
  Restructuring expense	2.1
  Aborted transaction costs	0.2
  Share based payments	0.1
  Profit on sale of land & buildings	(0.2)
  Adjusted EBITA	1.2

  Restructuring expenses
  £m	P&L charge	Cash
  Impairment of capitalized development costs	0.8	-
  Impairment of fixed assets	0.3	-
  Write down of inventory	0.4	-
  Termination costs	0.4	0.4
  Professional fees	0.1	0.1
  Total restructuring expense	2.1	0.5

  Adjusted results

• The Pennant Board considers the adjusted results to be an important measure to exclude non-trading or non-recurring items and therefore better monitor and compare performance between reporting periods

TRAINING SYSTEMS - RESTRUCTURING RATIONALE

In house (UK) production

Service installed units

Outsource globally

• Site rationalization

• Headcount reduction

• Selective bidding

• Working capital reduction

• Improved cost efficiency

• Increased segment profit margins

• Shorter working capital cycle

• Lower business risk

Previously Future Impacts

Bespoke OEM Projects

All skills on payroll

Wide product portfolio

Core skills retained

Focused product portfolio

• Cash cost of restructuring exercise £0.5m

• Headcount reduced from 140 to circa 110 going into Q1 2025

• Estimated annual cost savings £2.0m (£1.8m from staff costs)

• Property sales will serve to improve our current ratio from c.50% to c.90% by H1 2025

  ADJUSTED EBITA MARGIN BRIDGE
  
  
  

  • Downturn in Training Systems demand leading

    to unrecovered overheads

  • Restructuring exercise undertaken in Q4 has removed £2m of costs from the business which will protect profit margins in 2025

  • Boeing Apache contract was high gross margin

  • Bullish on future margins due to

    • Cost reduction exercise completed

    • Bids on Training System contracts are aftermarket and therefore lower material content

    • Continued growth of high margin Software and Services segment

• UK freehold land & buildings (£3.0m) reclassified to current assets in accordance with IFRS 5

• Training assets impaired following restructuring exercise undertaken in H2

• Net working capital -£0.3m (2023: -£0.5m)

  Operating Cash Flow
  £m	2024
  Operating cash before changes in working capital	0.4
  Changes in working capital	(0.2)
  Tax received	0.4
  Interest paid	(0.4)
  Net cash from operations	0.2

  CASH GENERATION IN THE YEAR

  • Positive cash generation from operations highlights management's focus

    on working capital discipline

  • Cash cost of restructuring exercise £0.5m

  • Further investment in the development of our integrated Auxilium software £1.4m (2023: £1.5m)

    Reconciliation of net debt
    £m	2024
    Opening net debt	(1.9)
    Net cash from operations	0.2
    Net cash used in investing activities	(1.6)
    Net cash from financing activities	1.1
    FX	0.1
    Closing net debt	(2.3)

  • Equity raise £1.35m (existing shareholders) net of fees to fund the continued product development program

  • Operating within the HSBC overdraft facility limit of £3.5m (2023: £4m)

  • Post balance sheet events have strengthened the balance sheet

    • Completion of the sale of UK properties, £2m cash proceeds net of costs (profit on disposal of £0.1m)

    • Renewal of the existing HSBC overdraft facility on an unsecured basis (following the bank's release of charges on the UK property assets) up to an available limit of £2m

      SEGMENTAL REVENUE PERFORMANCE

      Revenue
      £m	2024	2023	Movement
      Software licenses & products	0.4	1.1	(0.7)
      Software maintenance	1.9	1.6	0.3
      Technical services	7.3	6.9	0.4
      Software & Services	9.6	9.6	-
      Engineered solutions	3.6	5.2	(1.6)
      Generic products	0.6	0.7	(0.1)
      Training Systems	4.2	5.9	(1.7)
      Total Revenue	13.8	15.5	(1.7)

• Revenues contributed by the Software and Services CGU remained flat at £9.6 million year over year and represented 69% of the total revenue for the period (2023: 62%)

• The reduction in Training Systems revenue is explained by the successful completion of the Apache program

• HSBC overdraft facility carries interest at

  2.50% (2023: 2.50%) plus the bank's base rate

• Cash costs of finance are consistent with prior year

• The tax credit in 2024 includes:

  Tax credit	£'000
  Current tax credit	249
  Current tax prior year adjustment	44
  Deferred tax credit current year	182
  Deferred tax charge prior year adjustment	(13)
  Exchange difference	4
  Total tax credit	466

  • R&D claims under UK incentive plans

  • Release of deferred tax liabilities relating to change in use of UK land & buildings

  • Deferred tax credit in Pennant America Inc. due to temporary timing differences

• The Group has total unrelieved UK tax losses carried forward of £7.0 million (2023: £6.8 million)

2023 Actual

2025 Estimate

Average

140

Headcount

Aggregate Cost

£9.3 million

p.a.

Unit Cost p.a.

£66k per head

110

£7.5 million

£68k per head

21% reduction £1.8m p.a.

saving

Retention of highly skilled team members

Copyright 2025 © Pennant International Group Plc. All other trademarks are the property of their respective owners.

• Winning higher margin after market contracts

• Servicing installed base

Recurring, Repeatable & Predictable Revenue

Systems Support Software Technical Services

Organic

• Expanding reseller, agent and partnership relationships to globally expand market channel beyond UK, North America and Australia

• Enhancing support software functionality, including upgrades to support portal and customer tools

  Opportunities

• Adding coverage of the global standards

• Up and downstream software products capable of integration

• Accessing opportunities in adjacent territories and / or markets with

embedded customers

23% CAGR 2024-2027

Cumulative Net New Users

• Auxilium software - Q1 licence sales on track

• New pricing model

• Continued investment in Auxilium, customer experience and business winning

• Go to market - developing indirect channel model in new markets and new territories

• Cross selling opportunities with applications integrated into holistic solution

  2025 2026 2027

  Direct Indirect

  Relies on Partnerships

  OUTLOOK FY25

  • As per market expectations, expecting a return to a positive (modest) PBT following completion of restructuring exercise

  • Strong conversion of operating profit to operating cash

  • Implementing go to market strategies to service new territories and markets

  • Auxilium Q1 license sales on track

  • Revenue in the training segment will reduce due to the successful completion of the Apache program. Training segment rationalisation completed.

- CONFIDENTIAL

25 Copyright 2025 © Pennant International Group Plc. All other trademarks are the property of their respective owners.

Penn nt

Maximizing operational efficiency

Copyright 2025 © Pennant International Group Plc. All other trademarks are the property of their respective owners.