Pennant International Reports H1 2025 Loss Amid Strategic Software Push and Siemens Deal

Pennant International H1 2025: Lower revenue, deeper loss, but software strategy gathers pace

Pennant International has posted a tougher first half while pushing harder into higher margin software and services. Revenue fell to £4.5 million (H1 2024: £7.4 million) and the Group recorded an adjusted loss before tax of £1.8 million. Statutory loss before tax was £2.2 million, with a basic loss per share of 5.21p.

Management’s focus is clear: keep investing in the Auxilium software suite, broaden distribution, and lean into recurring revenue. A new global partner deal with Siemens to sell GenS (part of Auxilium) arrived just after period end – a notable validation of the product set.

Headline numbers investors should know

Revenue	£4.5 million (H1 2024: £7.4 million)
Gross margin	44% (H1 2024: 48%)
Adjusted loss before tax	£1.8 million
Statutory loss before tax	£2.2 million
Basic loss per share	5.21p
Annual Recurring Revenue (ARR)	£2.3 million (2024: £1.9 million)
Net debt (excl. leases)	£2.1 million
Cash and cash equivalents	£0.7 million at 30 June 2025
Total assets	£12.8 million
Capitalised Auxilium investment	£0.6 million in H1

Note: Pennant will not pay an interim dividend.

What moved the dial in H1: segment and regional trends

Software and services now 87% of Group revenue

• Systems Support Software: £1.2 million (flat year-on-year). Conversion of legacy users to Auxilium hit 50% by period end. The timing of sales was impacted by customers awaiting the integrated Q2 release.
• Technical Services: £2.7 million (H1 2024: £3.7 million). The step-down mainly reflects the completed Australia Defence Force conversion project that contributed £0.5 million in the prior period and slower awards in UK Rail.
• Combined, Software and Services delivered £3.9 million and 87% of Group revenue – evidence of the strategic mix shift management wants.

Training Systems reset shows in the numbers

• Training Systems revenue dropped to £0.6 million (H1 2024: £2.5 million) after the conclusion of the Apache programme in 2024.
• Following last year’s restructuring, the focus is now on modifications, retrofits, and overhauls to the installed base – with management flagging an “active pipeline” expected to support stronger H2 order intake.

Regional mix: EMEA softer, Americas steady

• EMEA: £1.6 million (H1 2024: £4.1 million) – the Apache wind-down explains most of the change.
• Americas: £1.6 million (H1 2024: £1.4 million) – supported by re-tendered Canadian Department of National Defence service contracts.
• APAC: £1.3 million (H1 2024: £1.9 million) – reflecting completion of the ADF contract.

Auxilium and the Siemens deal: why it matters

Auxilium is Pennant’s suite of Integrated Product Support (IPS) and Integrated Logistics Support (ILS) tools – software that helps owners of complex kit manage data, drive equipment availability and comply with standards. In H1, Pennant integrated GenS with Analyzer and released the combined solution in Q2, adding features like advanced scenario modelling for mission readiness.

• Customer transition: 50% of the installed base is now on Auxilium.
• ARR milestone: £2.3 million of ARR, up from £1.9 million – a first for the Group to exceed £2 million.
• Go-to-market build-out post period end: a global OEM partner agreement with Siemens Digital Industries Software to distribute GenS within its Teamcenter Service Lifecycle Management suite; new sales representatives in South Korea (Win-Tek), Japan (Eva Aviation) and India (Velentra Solutions).

My take: this is the crux of the equity story. If Siemens starts placing Auxilium into its Teamcenter base, Pennant’s reach expands significantly without the same cost of direct sales. It does not guarantee bookings, but it is a strong endorsement in a niche where credibility matters.

Cash, debt, property and the proposed equity raise

Net debt excluding leases was £2.1 million at 30 June 2025. Cash and cash equivalents were £0.7 million, and the Group had a bank overdraft of £2.734 million at period end.

• Property disposals: the programme launched in September 2024 is complete, realising £3.1 million of gross proceeds. Of this, £2.0 million was received in H1 and £1.1 million after the period. The RNS notes a net gain versus fair value.
• Proposed equity raise: an underwritten direct subscription to raise £1.25 million (before expenses) at 21.5p by existing shareholders. Results are expected to be announced by 22 September 2025.
• Overdraft headroom: the overdraft limit reduces from £2 million to £1 million on 1 November 2025. Management expects the subscription proceeds to facilitate that reduction and fund Auxilium development.

The going concern note is frank: even after the proposed raise, the Group remains reliant on Training Systems awards. That is a key dependency and a risk investors should weigh.

Outlook: pipeline and guidance

• Contracted revenue for the full year sits at approximately £9 million.
• The Board has a “high level of confidence” in delivering full-year revenue of not less than £10 million and says trading is in line with current market expectations.
• GenFly with the UK Ministry of Defence: negotiations are progressing well with the aim to secure an award before year end.
• Additional Training Systems opportunities: advanced talks on multi-year sole-source contracts with existing customers. Including GenFly, advanced bids exceed £10 million.

In short, H2 is busy. Converting a portion of the advanced bids list is pivotal for cash, sentiment and the Group’s repositioning.

My view: the good, the bad, and what to watch

Positives

• Clear strategic shift: Software and Services now 87% of revenue, with ARR at £2.3 million and half the customer base transitioned to Auxilium.
• Siemens partnership: meaningful channel expansion and third-party validation for GenS.
• Balance sheet actions: property disposals completed for £3.1 million; proposed £1.25 million subscription to shore up working capital.

Negatives

• Top-line pressure: revenue down sharply year-on-year and gross margin back to 44%.
• Losses widened: adjusted loss before tax of £1.8 million and statutory loss before tax of £2.2 million.
• Reliance on contract awards: going concern still linked to Training Systems wins; overdraft limit reduces in November, keeping time pressure on conversions.

What to watch next

• GenFly award timing and size.
• Conversion of the >£10 million advanced bids into signed contracts, particularly sole-source deals with existing customers.
• Evidence of Siemens-led pipeline building for GenS and further Auxilium channel appointments.
• ARR progression and pace of remaining customer migrations to Auxilium.

Bottom line

This was a messy first half operationally, but strategically it nudged Pennant further toward a software-led, higher margin model. If management lands GenFly and a couple of the sole-source Training Systems contracts while Siemens begins to deliver Auxilium traction, the investment case strengthens. Until then, the shares carry execution risk alongside the promise of a more recurring, scalable business model.

Jargon buster: ARR is annual recurring revenue from subscriptions and maintenance. IPS/ILS are software and processes that support maintenance, logistics and availability of complex equipment.