TIDMWSG
RNS Number : 1311L
Westminster Group PLC
29 September 2016
29 September 2016
Westminster Group Plc:
Interim Results for the six months to 30 June 2016
Westminster Group Plc ('Westminster', the 'Company' or the
'Group'), 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, is pleased to announce its
Interim Results for the six months ended 30 June 2016.
Key Points (Financial):
-- Positive Adjusted Operating EBITDA level of GBP0.18m (2015:
GBP0.02m) and Operating Loss reduced by 82% to GBP0.18m (2015:
GBP1.00m loss);
-- Average gross margin improved to 74% (2015: 51%) due to favourable business mix;
-- Airport business has produced a strong financial performance
despite volumes still below pre Ebola levels;
-- Operating costs reduced by a further 16% with a total now 27% below those pre Ebola;
-- Loss per share reduced to 1.21p (2015: 1.83p);
-- GBP1.3m raised in June 2016 from the issue of equity to institutional investors;
-- Cash balance as at 30 June 2016 GBP0.71m (2015: GBP0.41m);
-- Shareholders' Equity GBP3.03m (2015: GBP1.87m);
-- Darwin CLN debt reduced during period and eliminated shortly afterwards.
Key Points (Operational):
-- Increasing momentum in airport security business with three
new Memoranda of Understandings (MoU's) signed with governments and
airport authorities during the period making a total of seven
signed MoU's in different regions of the world now in progress, all
of which remain live opportunities;
-- Received Letter of Intent from Middle East Civil Aviation
Authority for the provision of long term (15+ years) airport
security services at a significant international airport with
potential to expand the Group's airport security business annual
revenues to over GBP35m with significant future growth potential -
now at final negotiation stage;
-- Further long term multi-million GBP significant incremental
business relating to the above Middle East airport project
opportunity under negotiation;
-- Cargo screening service commenced in West Africa;
-- Technology Division signed MoU for large and long term Border
Security project and delivered a wide range of sales and solutions
around the world;
-- Establishing strategic Joint Venture with a European security
group opening up new opportunities on selected projects around the
world;
-- Sierra Princess completed it's sea trials in September 2016
and undertook maiden voyage, with ferry service set to commence in
Q4;
-- Strategic Review progressing well and International Advisory
Board now established. Further appointments to plc board expected
to be announced in 2016.
-- Major upgrade of the Group's websites underway and largely
completed resulting in improved profile and enquiries;
-- Westminster's ex-pat team in Sierra Leone awarded Ebola
Medals for Service in West Africa during the crisis.
Commenting on the results and current trading Peter Fowler,
Chief Executive of Westminster Group, said:
"Following two difficult and challenging years dealing with the
effects of the Ebola Crisis, the oil price collapse and other
issues I am pleased to report the first half of 2016 has shown a
strong recovery both in terms of financial performance and in
business development.
"Our financial performance during the period has shown a marked
improvement achieving a positive adjusted EBITDA which is most
encouraging given we have still not fully recovered to pre-Ebola
passenger numbers in our West Africa airport operations, although
there has been a steady improvement throughout the period.
"I am pleased to report that despite the challenges of the past
two years, our business is facing unprecedented growth prospects,
particularly with our airport security operations. Airport traffic
in West Africa is returning following the end of the Ebola Crisis
and whilst not yet back to pre-Ebola levels, is showing encouraging
signs with the addition of cargo screening services having
commenced. Significant progress is being made with the Middle East
airport project negotiations and also with other projects under
discussion. The Technology Division continues to improve, and a key
opportunity is the large border project that was announced in
February 2016. The long awaited Ferry Services are due to start in
Q4 and this remains a value generating opportunity. All this, and
the progress the business is making on numerous fronts, gives the
Board and me confidence in our transformational growth
prospects."
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
For further information please contact:
Westminster Group plc. Tel: 01295 756 300
Peter Fowler (Chief Executive)
Ian Selby (Chief Financial Officer)
S. P. Angel Corporate Finance LLP (NOMAD + Broker) Tel: 020 3470 0470
Stuart Gledhill/Lindsay Mair
Walbrook PR (Financial PR) Tel: 020 7933 8780
Tom Cooper/Paul Vann 0797 122 1972
tom.cooper@walbrookpr.com
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
Chief Executive Officer's Review
Overview
I am pleased to report a much improved financial performance
compared to the previous year. The Group achieved positive adjusted
EBITDA in the first six months of the year, after losing GBP0.9m on
a similar basis in the comparative period. This was due to a strong
performance by our airport security business that has now been
profitable since the start of March 2015. This improving revenue
combined with a lower cost base, a reduction in debt and new
institutional investment has greatly strengthened the Group's
financial position compared to that at the start of the year and
has put us on a better platform to exploit the large opportunities
now presented to the Group.
Managed Services Aviation
As previously reported, Managed Services is now the core focus
of the Group, particularly our airport security business, and we
have in recent years not only developed a robust business model
which has demonstrably added to traveller security but developed a
market presence which is gaining increasing traction with airport
and state operators around the world.
Our decision to focus on and develop long term airport security
programmes in recent years and to build the infrastructure and
presence required, can now be seen to have been both strategic and
potentially transformational for our business. Recent and tragic
events around the world have clearly demonstrated the need for
increased security around transportation and in particular aviation
and airports. Underpinning this, a UK Government initiative at the
U.N. Security Council has in recent days resulted in a unanimously
approved resolution to address threats to civil aviation and
airports calling for improved screening and security services which
bodes well for Westminster and its current initiatives.
In this respect we have been extremely active pursuing the ever
growing interest in our airport security programs and now have
seven signed Memoranda of Understanding (MoU) in various
geographical regions. Of these, one in East Africa was signed some
time ago, three were signed in 2015 and so far in 2016 three more
MoU's have been signed, including a substantial project opportunity
within the Middle East. Collectively these MoU's serve over 10
million embarking passengers annually. All these opportunities
remain active and in the Group's Annual Report issued at the end of
June 2016 we provided an update on each of these. Since that time
progress has been made on a number of fronts relating to these
signed MoU's including the Middle East airport security project
mentioned below and the Asia airport security project signed in
February 2015 which is now at contract negotiation stage with high
level follow up meetings organised for early October 2016. Other
projects are in varying stages of progress and we will continue to
provide updates on material developments.
In May 2016 we announced we had received a formal Letter of
Intent from a Civil Aviation Authority relating to one of the MoU's
previously announced for a long term airport security services
project opportunity within the Middle East. At the end of July we
announced that contract discussions were largely completed and that
we were also looking at a substantial incremental requirement
extending the scope of works. Since then we have been negotiating
with the Government concerned regarding the incremental scope of
works which has now expanded to such an extent, both in terms of
scope and value, that it has been decided that these will be dealt
with under a separate contract agreement.
Accordingly, arrangements are currently being made for high
level meetings to hopefully finalise the security services contract
and the Company is working with UK Governmental bodies and other
institutions to deal with related financing issues whilst
Westminster's business development team continues to progress
negotiations of the long term multi-million pound incremental
requirement for related services at all international airports
within the country.
This single opportunity alone has the potential to transform the
Group's airport security business annual revenues to over GBP35m
with significant future growth potential both from this and the
other opportunities the Group is pursuing. On this particular
opportunity we are working closely with the British Government and
are receiving support from some of the highest levels in government
who regard it as a major UK opportunity in the light of Brexit. On
a wider front, we continue to receive excellent British Government
support for many other opportunities through DIT and numerous
British Embassies and High Commissions around the world. This
includes organising and attending meetings in the UK and overseas
as well as lobbying on our behalf.
Whilst projects of this size and complexity are a challenge to
bring to completion each one can be transformational and several
will provide the Group with excellent growth prospects. As ever
there can be no certainty as to timing or eventual outcome, but our
increasing reputation and macroeconomic drivers provide
considerable cause for optimism.
Managed Services: Ferry Operation
Westminster's ferry business, Sovereign Ferries, has been a
lengthy and challenging project to bring to fruition not least due
to damage suffered by the flagship vessel, the Sierra Queen, prior
to operations. However, work on this long awaited and much needed
service is now close to being completed and ferry services are
expected to commence in Q4 providing a fast, professional and safe
transport link across the estuary between Freetown International
Airport and the capital.
In July 2016 we took delivery of a second vessel, the Sierra
Princess. The Sierra Princess is a fast ferry capable of
transporting up to 70 passengers in safety and air-conditioned
comfort at over 20 knots from twin 400hp inboard engines. She is
equipped with the latest navigational and safety equipment.
The Sierra Princess undertook her inaugural voyage at an event
held on 9 September 2016 at the Company's Kissy Terminal in Sierra
Leone attended by the Sierra Leone Minister of Transport &
Aviation, various other senior government figures, the Chairman,
Director General and other dignitaries from the Sierra Leone Ports
Authority, the Maritime Police and other institutions. The event
was a great success with press and local TV crews in
attendance.
The Sierra Princess will be joining Sovereign's flag ship
vessel, the Sierra Queen, in providing a fast, safe and efficient
ferry service between the Tagrin, Kissy and Government Wharf
terminals either side of the Sierra Leone River estuary. The
service will not only provide a much needed professional airport
transfer service between the airport and the capital, Freetown,
with crossing times of just 20 minutes but will also provide an
efficient ferry service around the capital and further afield.
The Company has engaged an experienced marine and risk
management specialist, a highly experienced mariner with experience
of the region, who is now in-country assisting with the operations
and deployment of the vessels and who will now be providing the
management of the ferry service going forward. He has already made
significant progress in advancing both the infrastructure and
seaborne operations.
Clearly the delays in service commencement and the additional
costs arising from the delays have been both a frustration and cost
to the Group. However, this short term issue does not detract from
the expected economic demand over the 21 year term of the deal and
we remain optimistic about the long-term value of the service.
Technology Division
As outlined in the AGM Statement in June, and despite project
delays previously identified and which continue, the Technology
Division has made a positive contribution during the first half of
2016 with higher margins and a lower cost base.
In the Company's Annual Report issued at the end of June 2016 we
provided an update on projects delayed as a result of the
world-wide slump in oil prices amongst other factors, including the
US Bridge and Americas consulting projects. Whilst some small
amounts have been received on these projects these situations
remain broadly the same and these remain outside of the Company's
internal forecasts. We remain in dialogue with the relevant
counterparties and will update when further significant progress is
made.
The Company has secured orders and delivered a wide range of
products and services around the world and has also made good
progress with the potential 20 year Middle East border security
project announced in February 2016 for the provision of equipment,
training and ongoing maintenance of security screening checkpoints.
The Company successfully carried out trials and demonstrations in
relation to this project in May 2016 and due to the substantial
potential value of this contract and its own specific complexities,
is now discussing funding and deployment options with the
authorities and banks with UKEF support.
The worldwide reach of the Division is emphasised by a number of
recent contracts. By way of example, during the first six months of
2016, the Technology Division has supplied various products and
services to UK prisons; security equipment to various airports in
the UK and overseas; explosive detection equipment to a UN entity
in Somalia; supplied screening equipment to the South African
Police; as well as securing contracts with numerous other clients
as far afield as the Afghanistan, Canada, China Germany, Greece,
Indonesia, Kenya, Malaysia, Nigeria, Qatar, Romania, Singapore,
Tanzania, Turkey, the UAE and the USA.
The Division has a number of other advanced solution sales
prospects underway although as ever timing when dealing with
governments can be difficult to determine with accuracy.
Nevertheless, they are real opportunities that can provide
substantial cash flows when they are won.
2016 has seen a complete overhaul and upgrade of all our Group
websites and as part of that process a new and comprehensive
Westminster International website has been developed. This was
launched in June following a nine month build programme and is
optimised for mobile usage. Improved SEO functionality has led to
improved traffic and enquiries since commissioning.
The business continues to provide essential technical resources
to the Managed Services Division, again highlighting the vertical
integration that exists in our business.
Strategic Review
In our Annual Report we announced we are undertaking a Strategic
Review of the business to ensure the Group is well positioned to
maximise the substantial opportunities we are developing and to
successfully take the business to the next level. As part of that
review we are taking a critical look at our business including our
Board and management structures, our operations, our financing and
our advisory structure.
At Board level we have already made a number of changes to
streamline the operation whilst broadening the level of experience
and expertise to assist our expansion. We have split
responsibilities between the PLC Board responsible for overall
performance and strategy of the Group and the Operational Board
responsible for day to day management of the Group's business. We
have also formally established an International Advisory Board to
assist and advise the Group and its subsidiaries on various
international issues including governmental and client liaison,
cultural, ethnic and religious sensitivities, compliance with legal
issues, financing and general business development.
At the Company's AGM in June Sir Michael Pakenham retired from
the Board (but remains on the advisory board) and we would again
like to thank him for his support over the past years. Roger
Worrall, the Group's Commercial Director stood down from the main
board to concentrate on his duties as a member of the operational
board. Immediately following the AGM, Sir Tony Baldry joined the
Plc Board as Deputy Chairman. Sir Tony, a practising barrister, was
a Member of Parliament for 32 years stepping down in 2015. He held
various ministerial posts during that time including Minister of
State in the Ministry of Agriculture, Fisheries and Food. Sir Tony
also served as Parliamentary Under Secretary of State for the
Department of the Environment, Department of Energy and the Foreign
and Commonwealth Office with various responsibilities including
South Asia, Africa, North America and the West Indies.
The Board is in discussion with several high calibre
non-executive candidates including an Audit Committee chair and
will announce appointments as appropriate.
Financial Review
At the AGM on 30 June 2016, the Group referenced being close to
EBITDA positive break even in the first half of the year. When
adjusted for the impact of Ebola the Group recorded positive EBITDA
of GBP0.18m (2015: GBP0.02m) with an unadjusted operating loss of
GBP0.18m (2015: GBP1.01m).
Revenues and Gross Margin
Revenues grew by 5% to GBP2.03m (2015: GBP1.93m). This was due
to the strong recovery in managed services revenues following the
recovery from the worst ravages of the Ebola crisis that were felt
in 2014/2015. Technology division revenues (with an inherently
lower gross margin) were lower than 2015 primarily due to certain
large items in the comparative period. This change in mix increased
overall gross margins to 73% (2015: 51%).
Operating Costs
Overall Group administrative costs fell by a further 16%
compared to 2015. When adjusted for depreciation and non-cash items
such as share option expenses the average monthly operating cost
was approximately GBP0.27m. This marks a total reduction of 27%
compared to the period before Ebola in 2014.
Operating Result
Our headline operating loss fell by 82% to GBP0.18m (2015:
GBP1.01m). When adjusted for depreciation and the ongoing impact of
Ebola on the still reduced passenger numbers the Group recorded a
pro-forma positive Operating EBITDA of GBP0.18m (2015:
GBP0.02m).
Financing Charges
Our underlying cash interest cost was GBP0.11m (2015: GBP0.04m)
reflecting the increased level of convertible debt during the
period which bore a coupon of 10% per annum. A further GBP0.54m
(2015: GBP0.01m) of non-cash financing charges arose from the
amortisation and revaluation of convertible loan notes as well as
the costs (GBP0.14m) associated with share issues, and from IFRS
related adjustments around amortisation of convertible debt.
Overall financing charges were GBP0.65m (GBP0.01m)
Cash Flow Statement
The Group's operating cash outflow was reduced by 95% to
GBP0.06m (2015: GBP1.13m) and cash conversion remained strong
reflecting the high cash generation characteristics of the business
model. This reduction was achieved by a combination of improving
revenues, gross margin performance and a lower operating cost base
and strong cash collections. A further GBP0.57m was invested in the
setup of the Sierra Leone ferry project. Working capital outflow
was reduced by approximately 90% to GBP0.03m (2015: GBP0.29m). A
further GBP0.31m arising from the settlement of the share issue
which was approved at the AGM on 30 June 16 was received on 1 July
2016.
The Group issued a further GBP0.475m of Zero Coupon Loan Notes
to Darwin Strategic raising proceeds of GBP0.38m net, which were
fully converted into equity during the period. On 3 June 2016 the
Group placed 13m shares at 10p per share with institutional
investors raising GBP1.3m gross.
Overall cash balances increased from GBP0.15m to GBP0.71m during
the period.
Balance Sheet
The Group invested a further GBP0.57m on plant and machinery
during the period, with the bulk of it attributable to investment
in the setup costs of the Sovereign Ferries project in West Africa.
Debtors were GBP1.04m including the GBP0.31m share issue proceeds
referred to above. Overall debtors were broadly in line with credit
terms with some slightly overdue items being paid in July. In line
with the treatment adopted at the end of December 2015, an
adjustment was made to offset amounts due from certain delayed
contracts against deferred incomes with there being no impact on
net assets.
The Group had two convertible loan notes outstanding at the end
of the period:
-- Convertible Secured Loan Note. This instrument has a coupon
of 10% payable quarterly in arrears, has a conversion price of 35p
and is repayable in June 2018. At the balance sheet date it had
principal of GBP2.245m (2015: GBP1.245m) outstanding, and as
required under IFRS it is carried at an amortised cost balance of
GBP2.01m (2015: GBP1.06m)
-- Zero Coupon Convertible Unsecured Loan Notes ("CULN"). This
represents the remaining amount due to Darwin Capital Limited. This
was carried at nominal value of GBP0.472m and was fully converted
into equity in July 2016.
During the period 13m new ordinary shares were issued to
institutional investors raising GBP1.3m gross. Associated with this
issue Hargreave Hale received 5 million detachable warrants over
10p ordinary shares. These warrants have a life of 3 years from
date of grant and have an exercise price of 12p each. A further
6,659,567 ordinary 10p shares were issued on the conversion of
GBP775,000 of CULN.
At the balance sheet date shareholders' funds stood at GBP3.03m
(2015: GBP1.87m).
Outlook
In terms of operations, our Managed Services Division continues
to show strong growth and, in 2016 so far, has signed three more
Memoranda of Understanding, bringing the total number of signed
airport security MoU's the Company is working on to seven which
collectively serve over 10 million embarking passengers annually.
We continue to expand our opportunities in this respect with
further airports and authorities around the world expressing
interest in Westminster's solutions. Negations are well advanced
with the Middle East long term airport security services project
opportunity and this is helping to drive incremental and large
opportunities. We have the support of the UK Government and are
working with them and other institutions on related financing
issues.
In June we announced we were in dialogue with potential joint
venture (JV) partners for certain large scale projects whereby the
JV partner can bring added value through financing support and
regional presence in new strategic locations as well as bringing to
Westminster added language and cultural enhancements. I am pleased
to report that we have now agreed overall terms with a European
security group and we are in the process of setting up a Joint
Venture company in Europe, opening up new project opportunities in
different parts the world.
I am pleased to be able to report that our long awaited ferry
services are expected to commence operations in Q4 providing a
fast, professional and safe transport link across the estuary
between Freetown International Airport and the capital. Despite
setbacks, not least the damage to our flag ship the Sierra Queen we
reported on in April this year (now rectified), we have made
significant progress in developing the infrastructure and terminals
in preparation for the service. Our vessels are now being prepared
for operations and our latest addition, the Sierra Princess,
undertook her maiden voyage in September 2016.
Our Technology Division continues its recovery and has delivered
a wide range of sales and solutions around the world and, in
addition, is progressing a number of sizeable project opportunities
including the border security project for which it signed a MoU in
February 2016 which has now significantly expanded in scope.
We continue to receive excellent British Government support
through DIT and numerous British Embassies and High Commissions
around the world and this includes organising and attending
meetings in the UK and overseas as well as lobbying on our behalf.
Following a UK Government initiative, the U.N. Security Council has
in recent days unanimously approved its first ever resolution to
address threats to civil aviation and airports calling for improved
screening and security services and this bodes well for
Westminster.
As indicated above, despite the challenges of the past two
years, Westminster is facing excellent growth prospects,
particularly with our airport security operations. Airport traffic
in West Africa is returning following the end of the Ebola Crisis
and whilst not yet back to pre-Ebola levels is showing encouraging
signs with the addition of cargo screening services having
commenced. Significant progress is being made with the Middle East
airport project negotiations and also with other projects under
discussion. The Technology Division continues to improve, and a key
opportunity is the large border project that was announced in
February 2016. The long awaited Ferry Services are due to start in
Q4 and this remains a value generating opportunity.
I am pleased to report therefore that, despite the challenges of
the past two years, our business is facing unprecedented growth
prospects, particularly with our airport security operations. Added
impetus has come in September 2016 from the United Nations Security
Council following a British Government initiative. With this, and
the progress the business is making on numerous fronts, it gives
the Board and me confidence in our transformational growth
prospects.
Peter Fowler
Chief Executive Officer
Condensed consolidated statement of comprehensive income for the
six months ended 30 June 2016
6 months 6 months Year
to 30 to 30 to 31
June June Dec
2016 2015 2015
Note Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------------- ----- ---------- ---------- --------
Revenues 2,033 1,933 3,359
Cost of sales (539) (952) (1,403)
GROSS PROFIT 1,494 981 1,956
--------------------------------------- ----- ---------- ---------- --------
Administrative expenses (1,675) (1,988) (3,606)
LOSS FROM OPERATIONS (181) (1,007) (1,650)
--------------------------------------- ----- ---------- ---------- --------
Analysis of Operating Result
Depreciation & Amortisation (113) (78) (171)
Highlighted Costs including Impact
of Ebola (252) (946) (1,043)
--------------------------------------- ----- ---------- ---------- --------
Proforma Operating EBITDA (Loss) from
ongoing operations 184 17 (436)
--------------------------------------- ----- ---------- ---------- --------
Financing gains / (charges) 6 (649) (8) (338)
LOSS BEFORE TAXATION (830) (1,015) (1,988)
--------------------------------------- ----- ---------- ---------- --------
Taxation - - (7)
LOSS AND TOTAL COMPRENSIVE INCOME
ATTRIBUATBLE TO EQUITY SHAREHOLDERS (830) (1,015) (1,995)
--------------------------------------- ----- ---------- ---------- --------
LOSS PER SHARE (pence) 5 (1.21) (1.83) (3.49)
--------------------------------------- ----- ---------- ---------- --------
Condensed consolidated statement of financial position at 30
June 2016
6 months 6 months Year
to 30 June to 30 June to 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
------------------------------- ------ ----------- ----------- ----------
Goodwill 397 397 397
Assets in the Course of
Construction 0 282
Other intangible assets 32 9 34
Property, plant and equipment 4,799 3,137 4,343
TOTAL NON-CURRENT ASSETS 5,228 3,825 4,774
--------------------------------------- ----------- ----------- ----------
Inventories 123 96 57
Trade and other receivables 1,040 2,857 484
Cash and cash equivalents 709 414 150
--------------------------------------- ----------- ----------- ----------
TOTAL CURRENT ASSETS 1,872 3,366 691
--------------------------------------- ----------- ----------- ----------
TOTAL ASSETS 7,100 7,191 5,465
--------------------------------------- ----------- ----------- ----------
Share capital 8,311 5,650 6,345
Share premium 9,243 9,153 9,170
Merger relief reserve 299 299 299
Share based payment reserve 427 220 258
Equity Reserve on CLN 186 181 219
Revaluation reserve 134 134 134
Retained earnings (15,568) (13,772) (14,739)
--------------------------------------- ----------- ----------- ----------
TOTAL SHAREHOLDERS' EQUITY 3,032 1,865 1,686
--------------------------------------- ----------- ----------- ----------
Embedded Derivative
Borrowings 2,594 2,128 2,587
Deferred tax liabilities 53 53 53
--------------------------------------- ----------- ----------- ----------
TOTAL NON-CURRENT LIABILITIES 2,648 2,181 2,640
--------------------------------------- ----------- ----------- ----------
Deferred Income 9 2,037 -
Trade and other payables 1,411 1,108 1,139
--------------------------------------- ----------- ----------- ----------
TOTAL CURRENT LIABILITIES 1,420 3,145 1,139
--------------------------------------- ----------- ----------- ----------
TOTAL LIABILITIES 4,067 5,326 3,779
--------------------------------------- ----------- ----------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 7,100 7,191 5,465
--------------------------------------- ----------- ----------- ----------
Condensed consolidated statement of cash flows for the six
months ended 30 June 2016
6 months 6 months Year
to 30 June to 30 June to 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
----------------------------------------------------- ----- ----------- ----------- ----------
LOSS BEFORE TAXATION (830) (1,015) (1,988)
Adjustments 7 798 166 589
Net changes in working capital 7 (30) (285) 209
Equity settlement payment - - 60
----------------------------------------------------- ----- ----------- ----------- ----------
NET CASH USED IN OPERATING ACTIVITIES (62) (1,134) (1,130)
----------------------------------------------------- ----- ----------- ----------- ----------
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (567) (1,316) (2,642)
Purchase of intangible assets - (282) (27)
Net Proceeds from disposal of fixed assets - - 25
NET CASH USED IN INVESTING ACTIVITIES (567) (1,598) (2,644)
----------------------------------------------------- ----- ----------- ----------- ----------
FINANCING ACTIVITIES:
Gross proceeds from the issue of Ordinary Shares 1,301 - -
Settlement of AGM equity issue received 1 July 2016 (311) - -
Costs of the share issue (40) - -
Gross proceeds from the issue of Loan Notes 475 2,155 3,155
Borrowing Repayments (33) - -
Cost of loan note issue (92) (158) (280)
Interest Paid (111) (31) (131)
NET CASH FROM FINANCING ACTIVITIES 1,189 1,966 2,744
----------------------------------------------------- ----- ----------- ----------- ----------
Net change in cash and cash equivalents 559 (766) (1,030)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 150 1,180 1,180
CASH AND EQUIVALENTS AT OF PERIOD 709 414 150
----------------------------------------------------- ----- ----------- ----------- ----------
Condensed consolidated statement of changes in equity for the
six months ended 30 June 2016
Share
Merger based Equity
Share Share relief payment Reserve Revaluation Retained
capital premium reserve reserve on CLN reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
AS OF 1 JANUARY
2016 6,345 9,170 299 258 219 134 (14,739) 1,686
Issue of new shares 1,966 109 - - - - - 2,075
Costs of new share
issue - (36) - - - - - (36)
Arising in the
Period - - - 170 (33) - - 137
Share based payments - - - - - - - 0
TRANSACTIONS WITH
OWNERS 1,966 73 - 170 (33) - - 2,176
---------------------- --------- --------- --------- --------- --------- ------------ ---------- --------
Loss for the period (830) (830)
AS AT 30 JUNE 2016 8,311 9,243 299 428 186 134 (15,569) 3,032
---------------------- --------- --------- --------- --------- --------- ------------ ---------- --------
AS OF 1 JANUARY
2015 5,515 9,039 299 141 47 134 (12,757) 2,418
Issue of new shares 135 114 - - - - - 249
Arising in the
Period - - - 79 134 - - 213
TRANSACTIONS WITH
OWNERS 135 114 - 79 134 - - 462
---------------------- --------- --------- --------- --------- --------- ------------ ---------- --------
Loss for the period - - - - - - (1,015) (1,015)
AS AT 30 JUNE 2015 5,650 9,153 299 220 181 134 (13,772) 1,865
---------------------- --------- --------- --------- --------- --------- ------------ ---------- --------
AS OF 1 JANUARY
2015 5,515 9,039 299 141 47 134 (12,757) 2,159
Issue of shares
for cash 40 20 - - - - - 60
Share based payment
charge - - - 76 - - - 76
Exercise of share
options 1 - - (1) - - - -
Lapse of share
options - - - (13) - - (13) -
Warrants issued
with loan notes - - - 55 - - - 55
Bonus Issue 114 (114) - - - - - -
CLN conversion 675 225 - - (39) - - 861
Loan notes issued - - - - 211- - - 211
TRANSACTIONS WITH
OWNERS 830 131 - 117 172 - 13 1263
---------------------- --------- --------- --------- --------- --------- ------------ ---------- --------
Total Comprehensive Income for
the Year (1,995) (1,995)
AS AT 31 DECEMBER
2014 6,345 9,170 299 258 219 134 (14,739) 1,686
---------------------- --------- --------- --------- --------- --------- ------------ ---------- --------
Notes to the condensed consolidated financial statements for the
six month period ended 30 June 2016
1. General information and nature of operations
Westminster Group Plc (the "Company") and its subsidiaries
(together the "Group") design, supply and provide on-going support
for advanced technology security, safety, fire and defence
solutions to a variety of government and related agencies,
non-governmental organisations and mainly blue chip commercial
organisations. The Group currently operates through a network of
agents located in 48 countries. Agents typically generate sales
leads and work with the Group in preparing tender documentation.
The majority of the agents are based in the Middle East, the Far
East and Africa. The Company was incorporated on 7 April 2000 and
is domiciled and incorporated in the United Kingdom and is listed
on the AIM Market of the London Stock Exchange.
2. Basis of preparation
These unaudited condensed consolidated interim financial
statements are for the six months ended 30 June 2013. The Group has
not adopted the reporting requirements of International Accounting
Standard (IAS) 34 'Interim Financial Reporting'. They have been
prepared following the recognition and measurement of principles of
IFRS as adopted by the European Union. The statements do not
include all of the information required for full annual financial
statements and should be read in conjunction with the consolidated
financial statements of the Group for the year ended 31 December
2015.
The condensed consolidated interim financial statements have
been prepared in accordance with the accounting policies adopted in
the last annual financial statements, which were for the year ended
31 December 2015.
This condensed consolidated interim financial statement for the
six months ended 30 June 2016 has neither been audited nor reviewed
by the Group's auditors. The financial information for the year
ended 31 December 2015 set out in this interim report does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. The statutory accounts for the year ended 31
December 2015 have been reported on by the Company's auditors and
delivered to the Registrar of Companies. The report of the auditors
was unqualified and did not contain a statement under section
498(2) or 498(3) of the Companies Act 2006.
3. Going concern
These interim financial statements are prepared on a going
concern basis. In assessing whether the going concern assumption is
appropriate, management have taken into account all relevant
available information about the future. As part of its assessment,
management have taken into account the profit and cash forecasts,
the continued support of the shareholders and bondholders and
Directors and management ability to affect costs and revenues.
Management regularly forecast results, financial position and cash
flows for the Group. Whilst the Group's financial performance
improved significantly in the first half of 2016 the Group
maintains contingency plans in the event that business performance
targets and associated cash flows are not achieved. A worst case
forecast for the twelve months to 30 September 2017 has been
prepared which includes revenues from the run rate of smaller
contracts, continuation of major existing contracts such as the
West African airport contract and from the Sovereign Ferries
operation, where a sensitivity of a go live date in the fourth
quarter of 2016 has now been reflected. Should the associated
margin and cash targets not be met, the Group's options could
include cost reductions and realisations of non-core assets which
could reduce net debt as well as potential further issues of either
equity or debt to existing or new shareholders or loan note
holders. Incremental wins of large contracts including Managed
Services have been excluded from this analysis as have any needs
for incremental financing around setup costs on such contracts,
although financing arrangements are expected to available through
joint venture and other partners for certain setup costs of the
advanced Middle East airport security prospect. The directors
believe that based on the strong financial dynamics of incremental
Managed Services contracts that they should be able to secure
financing and are in discussions with various potential debt and
equity providers. Based upon these projections the Group has
adequate working capital for the 12 months following the date of
signing these interim financial statements. For this reason they
continue to adopt the going concern basis in preparing these
interim financial statements.
Basis of consolidation
The Group financial statements consolidate those of the Group
and its subsidiary undertakings drawn up to 30 June 2016.
Subsidiaries are entities over which the Group has the power to
control the financial and operating policies so as to obtain
benefits from their activities. The Group obtains and exercises
control through voting rights. Consolidation is conducted by
eliminating the investment in the subsidiary together with the
parent's share of the net equity of the subsidiary.
4. Functional and presentational currency
The financial information has been presented in pounds sterling,
which is the Group's presentational currency. All financial
information presented has been rounded to the nearest thousand.
5. Loss per share
Earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year. For diluted
earnings per share the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential
ordinary shares. Only those outstanding options that have an
exercise price below the average market share price in the year
have been included. For each period the issue of additional shares
on exercise of outstanding share options would decrease the basic
loss per share and therefore there is no dilutive effect.
The weighted average number of ordinary shares is calculated as
follows:
6 months 6 months Year
to 30
to 30 June June to 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
000 000 000
----------- ---------- ----------
Issued ordinary shares
Start of period 63,455 55,165 55,145
Effect of shares issued during
the period 4,946 164 2,029
Weighted and diluted average
basic number of shares for
period 68,401 55,329 57,174
=========== ========== ==========
6. Financing Costs
Six months Six Months Year
to 30 to 30 ended
June June 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ----------- ----------
Bank Borrowings 1 (0) (1)
Interest Payable on Convertible Loan Notes (112) (41) (121)
Underlying Finance Costs (111) (41) (122)
Revaluation of embedded derivative - 48 -
Adjustment in relation to Amortised Finance
Cost on Convertible Loan Notes (538) (56) (216)
Impact of IFRS on Financing Costs (538) (8) (216)
Net Finance Costs (649) (8) (338)
----------- ----------- ----------
7. Cash flow adjustments and changes in working capital
The following non-cash flow adjustments and adjustments for
changes in working capital have been made to loss before tax to
arrive at operating cash flow:
6 months 6 months Year
to 30 to 31
to 30 June June Dec
2016 2015 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ---------- --------
Adjustments:
Depreciation, amortisation and impairment
of non-financial assets 113 78 171
Finance Charge / (Gain) 649 8 338
(Profit) / loss on disposal of non financial
assets - - 4
Share-based payment expenses 36 79 76
Total adjustments 798 165 589
----------- ---------- --------
Net changes in working capital:
Decrease/(increase)in inventories (66) (24) 15
Decrease /(Increase) in trade and other receivables (245) (813) 1,625
(Decrease)/increase in trade and other payables 281 551 (1,431)
Total changes in working capital (30) (285) 209
----------- ---------- --------
8. Cash flow adjustments and changes in working capital
In July 2016 the remaining GBP472,500 of loan notes due to
Darwin were converted into 3,993,798new ordinary 10p shares
9. Approval of interim financial statements
The interim financial statements were approved by the Board of
Directors on 28 September 2016.
10. Copies of Interim Financial Statements
A copy of the interim financial statement is available on the
Company's website, www.wsg-corporate.com and from the Company's
registered office, Westminster House, Blacklocks Hill, Banbury,
Oxfordshire, OX17 2BS.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEIFIAFMSEIU
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