AGM Trading Update

RNS Number : 5862R

Westminster Group PLC

30 June 2015

 

30 June 2015

Westminster Group Plc:

AGM Trading Update

Westminster Group Plc ('Westminster' or the 'Company'), the AIM listed supplier of managed services and technology based security solutions to governments and government agencies, non-governmental organisations (NGO's) and blue chip commercial organisations worldwide, today updates on its activities and trading to date for the current financial year.

The Company expects Technology division revenues for the first half of 2015 ("H1 2015") to be ahead of the equivalent period in 2014 while Managed Services revenues are expected to be below those in the prior year.  The latter resulting from the Ebola crisis which started to impact financial performance from July 2014 onwards. Aggregate revenues are therefore expected to be slightly below those in the first half of 2014.

The Group has reduced its overheads which are currently circa 18% less than those in the first half of 2014 and its operating loss is expected to be comparable to the same period last year.  It should be noted that the majority of the expected loss in H1 2015 has arisen from the reduction in gross margin due to lower passenger numbers and thus security fees generated by our West African airport operations, and without the impact of Ebola, the Group would have expected to be approximately break-even for H1 2015.  These results exclude the expected positive impact of the ferry service which is expected to become operational in July.

·     Recovery from the Ebola outbreak - We are pleased to report that a combination of improving passenger numbers and a lower cost base has seen the airport contract resume delivering a positive contribution to the Group in the last few months of this year.  This excludes the impact of Kenya Airways resumption of flights at the start of June and today's scheduled resumption by Air France. We have been informed that new and existing operators are looking at commencing services into the region during the summer of 2015. Screening of freight remains a significant opportunity when the Ebola crisis has abated.

·     The 200 seat Flagship Ferry Vessel was purchased in March and delivered to the country in April and a very successful high profile launch ceremony attended by the vice president and key national and international organisations was held on 11 June.  Final logistical and infrastructure arrangements are now being put in place and it is expected to be operational in July, following an inaugural trip with the presidential party.  This service has been well received locally and additional service opportunities around charter and cargo have been identified. 

·    The Technology division has won product orders in excess of £1.5m (2014: £0.6m) including the US bridge contract where work is expected to commence in July 2015. The Division has progressed several major sales opportunities (including several in Mexico with the support of UK Trade & Industry, UK Export Finance and the franchise partner).  Work has commenced on the $4.4m Americas consulting contract announced in December 2014 and initial cash from this has been received. We are being strongly supported by the UK High Commission in country.  The Division continues to provide infrastructure support to the Managed Services division, particularly around the setting up of the Sovereign Ferries operation in Sierra Leone. In addition to the previously announced order book the Division is seeking to progress several very large prospects, and whilst these are prudently not included in internal plans until very close to signature, they are highly indicative of the interest we and our partners are generating.

·    The Group improved its cash resources to support investment plans and augment working capital by the issue of £2.32m of convertible loan notes in April, of which £0.25m were subsequently converted into equity.

·     Agreement has been reached in principle with the vendors of CTAC Limited.  This is a full and final agreement, subject to contract regarding amounts due from the vendors of CTAC which was acquired in April 2010. Resolution is expected in July 2015 and further details will be provided at that point. 

·    The Managed Services airport pipeline has expanded in quantum and priority prospects have increased significantly since 2014. Both the Asian and East African opportunities under signed MoU's are included in this and both have advanced during the period and further progress is expected as they move through their respective governmental processes.

The Group has the following targets for the rest of the year:

·     Commence commercial operations for the ferry service, building on the momentum of the post Ebola recovery and increasing passenger volumes.

·     Sign a further airport managed services contract as well as growing and progressing the sales pipeline.

·     Technology Division to deliver substantial amount of the order backlog and win further new large deals as well as growing run rate business. We are targeting commencing 2016 with a substantial order book which will improve visibility on revenues.

·     Win business in the Americas directly and through franchise partners; continue to build stronger links with governments, UK Export Finance, UK Trade and Industry and others.

·     Use cash flows from customer contracts to reduce the remaining £1.4m of convertible loan note from Darwin Strategic where prudent to do so, to best manage dilution.

 

For further information please contact:

Westminster Group plc.	Tel: [phone]
Peter Fowler (Chief Executive)
Ian Selby (Chief Financial Officer)
SP Angel Corporate Finance LLP (NOMAD and Broker)	Tel: [phone]
Stuart Gledhill/Katy Birkin
Walbrook PR (Financial PR) Tom Cooper/Paul Vann	Tel: [phone]  0797 122 1972
	[e-mail]

Notes:

Westminster Group plc is a leader in the supply of system solutions and products to the security, defence, fire protection and safety markets worldwide.

Westminster's principal activity is the design, supply and ongoing support of advanced technology security solutions, encompassing a wide range of surveillance, detection, tracking and interception technologies and the provision of long term managed services contracts such as the management and running of complete security services and solutions in airports, ports and other such facilities together with the provision of ferry services, manpower, consultancy and training services. The majority of its customer base, by value, comprises governments and government agencies, non-governmental organisations (NGO's) and blue chip commercial organisations.  For further information please visit www.wsg-corporate.com  

 

END

 

 

TSTLKLLLEQFLBBQ