TIDMWSG
RNS Number : 3971D
Westminster Group PLC
31 January 2018
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014
Westminster Group Plc
('Westminster', the 'Group' or the 'Company')
Trading Update
Westminster Group Plc (AIM: WSG), a leading supplier of managed
services and technology based security solutions, is pleased to
provide a trading update on its business activities based on
unaudited management accounts for the 12 months ending 31 December
2017.
The Group expects to report a 23% increase in revenues to
GBP5.4m in 2017, an increase of GBP1.0m on the GBP4.4m reported for
2016. The EBITDA loss for the year is expected to be in line with
the Board's expectations at around GBP1.2m, of which GBP0.7m arose
from the discontinued ferry operations in Sierra Leone.
Managed Services Division
In December we announced that legal and commercial negotiations
regarding the major long-term project opportunity within the Middle
East had been completed apart from a few minor commercial and
contractual issues yet to be agreed. We are awaiting notification
from the client on the completion of its final internal approval
process, which could happen at any time. We believe this final
approval process is imminent, but with any potential project of
this size and complexity there can never be certainty of timing or
outcome.
Our Managed Services Division is the key focus of the Group and
we have signed a number of Memorandums of Understanding (MoU) with
governments and airport authorities in our target markets, several
of which were added in 2017. In addition to the Middle East
potential contract discussed above, we expect to see at least one
of these MoU's converted into a signed contract in 2018. As
previously announced, due to the confidential nature of such
projects and commercial sensitivity, we are no longer announcing
any individual MoU when signed and we will update the market on
material developments as appropriate.
Our aviation security business in West Africa has performed well
as the post Ebola recovery continues. There has been passenger
growth across all airlines apart from Air France, with some of
these passengers being picked up by their code-share airline, KLM.
Our embarking passenger numbers in December at c.11,000 represent a
record December since the commencement of our contract. For the
full year we had c.111,000 embarking passengers, an increase of 14%
on the c.97,000 embarking in 2016. Several new airlines have
started services towards the end of 2017, and we are expecting
Turkish Airlines to commence a new route to Istanbul in Q1
2018.
Unaudited revenues in 2017 for the Managed Services Division
amounted to GBP3.6m, an increase of 28% on the GBP2.8m achieved in
2016.
We continue to secure contracts to assist airport authorities
around the world with their equipment and training needs, and we
plan to expand our training team in 2018 to meet the demand for
their services.
Technology Division
The Group's Technology Division is expected to report increased
revenues in 2017 to GBP1.8m, an increase of c10% on the GBP1.6m
achieved in 2016. There have been fewer large, higher margin sales
in 2017 and as a result the gross profit margin for the Technology
Division was down to 19% in 2017, compared with 40% in 2016. As a
result of the lower margins, the Division is expected to report a
broadly break-even EBITDA result for 2017 compared to an EBITDA
profit of GBP273,000 in 2016.
The Technology Division continues to receive a high level of
interest and enquiries from around the world for its technology
products and solution offerings and the Board believes a planned
expansion of the sales team will produce a marked improvement in
this Division's performance going forward.
Ferry Operations
Our Interim Results Announcement in September 2017 noted that
the Board had taken the decision to exit the ferry service in
Sierra Leone. An agreement was reached with Sea Coach Express at
the end of September to operate the Sovereign Ferries service
between the airport and Freetown and this service is now fully
operational. Sea Coach Express has taken over the Sierra Princess
and has added other vessels to expand the Sovereign fleet, offering
travellers a greatly enhanced service. We continue to operate the
ferry terminals in Sierra Leone in accordance with our 21-year
agreement and we are jointly promoting the Sovereign Ferries
service with Sea Coach Express. We will continue to receive
revenues from passengers travelling to and from our terminals.
We are exploring options for disposal of the Sierra Queen.
Sovereign Ferries had assets of GBP2.6m on its balance sheet at the
end of September 2017, including GBP1.5m for the Sierra Queen, and
the Board has taken the decision to write these down to nil at 31
December 2017. The costs associated with the exit from the ferry
operations are expected to be treated as exceptional exit costs in
the Company's full year results.
Cash and Funding
At 31 December 2017, the Group had a cash balance of GBP0.4m,
with a further GBP87,500 received earlier this month from the
exercise of 875,000 warrants.
At 30 January 2018, the cash balance was still approximately
GBP0.4m however the Company expects to announce further details in
respect of a small fundraising later this morning in order to
provide additional working capital and to support new contract
opportunities.
As mentioned in our December Project Opportunity Update, plans
are in place to raise the required funds to support investment in
the new Middle East project and other potential new Managed
Services contracts, details of which will be announced later in Q1
2018.
Chairman and Board
With an increasing volume of high level and governmental
meetings around the world being undertaken in progressing our many
Managed Services opportunities, and to help deliver on our
strategic goals, Sir Tony Baldry is moving from Non-Executive to
Executive Chairman with immediate effect. The Board will be further
strengthened in due course with new Non-Executive Directors who
will broaden and strengthen the Board's knowledge and
expertise.
Outlook
The anticipated new Managed Services contract award in the
Middle East will represent a major step forward towards achieving
the Group's strategic objectives, and as mentioned with our Interim
Results in September 2017, we expect to be investing in the
business in 2018 and beyond to deliver future growth.
For further information, please contact:
Westminster Group Plc Media enquiries via Walbrook PR
Rt. Hon. Sir Tony Baldry - Chairman
Peter Fowler - Chief Executive Officer
Martin Boden - Chief Financial Officer
S. P. Angel Corporate Finance LLP (NOMAD & Joint Broker)
Stuart Gledhill 020 3470 0470
Lindsay Mair
Caroline Rowe
Beaufort Securities Limited (Joint Broker)
Elliot Hance 020 7382 8300
Walbrook (Investor Relations)
Tom Cooper 020 7933 8780
Paul Vann 0797 122 1972
tom.cooper@walbrookpr.com
Notes:
Westminster Group plc is a specialist security and services
group operating worldwide through an international network of
agents and offices in over 50 countries.
Westminster's principal activity is the design, supply and
on-going 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 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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