Technical training solutions company Pennant International reported a decrease in profits for 2017 on Monday, despite achieving revenue growth over the year.
The AIM-traded company's pre-tax profits fell 5% to £1.8m compared to 2016, while revenues grew 5% to £18.1m over the same period due to continued production and delivery of work on contracts in the Middle East.
The increase in revenues was offset by administrative costs however, which saw a 6% increase to £5.4m as the company paid out £125,000 in costs associated with the termination of the former chief executive's contract.
The company reported zero debt and net cash of £1.5m at year end, a drop of 57% against the previous year.
Philip Walker, chief executive of Pennant International, said: "The group has continued to meet contractual milestones, delivering products and services, and securing payments in line with all performance obligations, which is testament to the dedication and hard work of all employees and the resilience of the business, enabling the positive momentum of the business as a whole to be maintained."
Throughout the year highlights for the company included engaging in the second phase of a contract with an unnamed Middle Eastern customer worth over £7m, a renewed a contract with RNAS Yeovilton for another five years estimated to be worth £1.25m and the securing of A$3.5m through a two year contract extension with BAE Systems Australia.
In a statement, Pennant said it was "well placed to maximise opportunities" despite uncertainty in the global economy and budgetary pressures on worldwide defence markets, an important market for the company.
Simon Moore, chairman of Pennant International, said: "We are experiencing an encouraging start to the current financial year and anticipate that the full year results for 2018 will be first-half weighted owing to the adoption of IFRS 15. Prospects remain positive. The contracted order book, valued at more than £34 million, underpins good forward visibility of revenues well into 2020."
IFRS 15 is the new International Financial Reporting Standard 15 is a set of requirements for the reporting of financial results, which includes stipulations such as revenue recognition based upon product delivery rather than production.
As of 1454 GMT, Pennant International's shares
were down 5.26% at 79.11p.