TIDMWSG
RNS Number : 1076W
Westminster Group PLC
14 August 2020
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')
Interim Results for the six months to 30 June 2020
Westminster Group Plc (AIM: WSG), a leading supplier of managed
services and technology-based security solutions, announces its
unaudited interim results for the six months ended 30 June
2020.
Financial Highlights:
-- Group revenues up 24% to GBP7.0 million (H1 2019: GBP5.6 million).
-- EBITDA moves from loss to a profit of GBP0.89 million (H1 2019: loss of GBP0.05 million).
-- Profit before tax of GBP0.24 million (H1 2019: Loss before tax of GBP0.79 million).
-- Earnings per share 0.16p profit (H1 2019: Loss of 0.58p).
-- Operationally cash positive in first half.
-- Administration expenses unchanged from H1 2019 at GBP2.3
million despite additional costs from acquisition of Euro-Ops, new
joint ventures and increasing revenue.
-- GBP3m financing facility and GBP1.75 million equity sharing
agreement entered in January 2020.
-- Reduced the Group's convertible loan notes by GBP561,250 to
GBP1,683,750, maturity date for the balance extended to 1 May 2021.
As at 30 June 2020 there was GBP1,590,000 outstanding.
-- Increased stockholding by circa GBP0.4 million to deal with increased sales demands.
-- Cash balance of GBP1.6 million at 30 June 2020 (30 June 2019: GBP0.3 million).
Operational Highlights:
-- The COVID-19 pandemic has demonstrated the value of the
Group's business model with multiple revenue streams from various
sources around the world providing resilience to regional
issues.
-- Significant increase in product sales worldwide, more than
offsetting reductions in other parts of the business.
-- Ghana port operations continued to operate and deliver revenues throughout the crisis period.
-- CAA, Aviation Security Quality Assurance Framework audit
graded Westminster's training as 'Outstanding' in all areas
audited.
-- Provided a leading global investment management corporation
with a range of fever screening and safety equipment for deployment
to its worldwide offices as part of its 'Return to Work'
programme.
-- Conducted successful fever screening trials with Menzies Aviation at Stockholm Airport.
-- Rebranding exercise completed.
-- Launched the first phase of the new expansive Westminster website.
-- Launched UK wide TV advertising campaign.
-- Embarked on a project to introduce specialist 'unattended
retail' vending machines that dispense masks and facial coverings
to the UK market.
-- Agreement with designer label, Mango, to vend their products.
-- Signed a new strategic alliance agreement with JP
International Training Limited ('JP International'), extending our
non-contact e-Learning platforms and further enhancing our
e-product services.
Commenting on the results and current trading, Peter Fowler,
Chief Executive of Westminster Group, said:
"In our 2019 Annual Report I was pleased to state that we had
delivered 4 consecutive years of double-digit percentage revenue
growth with 2019 being 63% up on 2018. I am delighted therefore to
report that for the first 6 months of 2020 that growth trend has
continued, and we have delivered another outstanding result with a
further 24% increase in revenues to cGBP7.0 million (2019: GBP5.6
million ), being operationally cash positive and delivering an
EBITDA of GBP893,000 and a profit before tax of GBP236,000.
"These results, against a backdrop of the COVID-19 pandemic, are
an outstanding achievement due, in part, to our multiple revenue
stream business model and is a testament to the dedication and hard
work of all our employees, some of whom have been isolated overseas
for several months.
"These uncertain times present both challenges and opportunities
for Westminster, and over the next few months and years we have an
opportunity to build on our current achievements and our year on
year growth, with the potential for step changes in revenues from
the many prospects we are pursuing. The Board and I remain
committed to delivering on this potential."
For further information please contact:
Westminster Group Plc Media enquiries via Walbrook
PR
Rt. Hon. Sir Tony Baldry - Chairman
Peter Fowler - Chief Executive Officer
Mark Hughes - Chief Financial Officer
S. P. Angel Corporate Finance LLP (NOMAD
& Broker)
Stuart Gledhill 020 3470 0470
Caroline Rowe
Walbrook (Investor Relations)
Tom Cooper 020 7933 8780
Nick Rome 0797 122 1972
westminster@walbrookpr.com
Notes to Editors:
Westminster Group plc is a specialist security and services
group operating worldwide via an extensive international network of
agents and offices in over 50 countries.
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 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.
Chief Executive O cer's Review
Overview
In our 2019 Annual Report I was pleased to state that we had
delivered 4 consecutive years of double-digit percentage revenue
growth with 2019 being 63% up on 2018. I am delighted therefore to
report that for the first 6 months of 2020 that growth trend has
continued, and we have delivered another outstanding result with a
further 24% increase in revenues to cGBP7.0 million (2019: GBP5.6
million) being operationally cash positive and delivering a healthy
pre-tax profit.
The defining aspect of our first six months trading in 2020
however is the COVID-19 pandemic and how we have successfully
navigated the crisis so far. The COVID-19 pandemic has become the
world's biggest health and economic crisis in a generation.
Millions of people have been infected and hundreds of thousands
have lost their lives. Businesses around the world have been
severely impacted, not least in the aviation and travel industry,
with thousands of businesses facing financial ruin and job losses
being seen on an unprecedented scale. The pandemic is also far from
over and considerable uncertainty still exists around the
world.
Against this backdrop, our achievements and results for H1 2020
are all the more remarkable. Despite losing a large part of our
revenues from our aviation security, training and guarding
business, to have still delivered a 24% increase in revenues, an
EBITDA of GBP893,000 and a profit before tax of GBP236,000 is an
outstanding achievement and a testament to the dedication and hard
work of all our employees, some of whom have been isolated overseas
for several months.
Key factors in our successful performance during this period
have partly been due to the business model we have developed with
multiple revenue streams from varying sources around the world,
limiting our exposure to regional issues, together with an agile
management team. Based on our experience of the West African Ebola
outbreak a few years ago we identified COVID-19 as both a threat
and an opportunity to our business in early January, before it was
even pronounced a pandemic, and took early action to protect our
business, our people and our customers. We instigated regular risk
assessments for all parts of our business on the developing
pandemic and implemented a number of initiatives. We increased our
targeted marketing, secured supply chains and identified additional
products and suppliers. We increased our stockholding of detection
and safety equipment by around GBP400,000, all out of our existing
resources, to maximise our non-contact revenues from the sales of
screening and safety equipment. This proved to be highly effective
as explained further in our divisional review below.
Against a backdrop of challenging travel restrictions around the
world we have continued to undertake business development where
possible and to pursue our various large-scale project and
strategic partnership opportunities, with much of the interaction
now being undertaken via video conferencing.
We have undertaken a rebranding exercise bringing our diverse
businesses under the 'One Company - One Vision' ethos which has
involved rebranding parts of our business to better reflect the
Westminster brand. As part of this exercise we have undertaken a
complete overhaul of our extensive web presence with a view to
bringing all our various websites together in a new and expanded
website. Our extensive portfolio of products and services are all
being integrated into the new website focussed on our three key
sectors - Land, Sea & Air. The first phase of the website was
launched in June 2020.
We also launched a UK wide TV advertising campaign in June 2020
both to help expand UK sales as part of our 'Back to Work'
initiative and also to help increase brand awareness.
Divisional Review
Services Division
Our Services division had a good start to the year with
visibility of over GBP8m in annual recurring revenues from our
long-term managed services, guarding and maintenance contracts.
Notwithstanding the effect of COVID-19 the revenues in H1 were only
marginally down at GBP2.2 million (H1 2019: GBP2.5 million).
Our West African airport security contract, which runs until May
2027, under which we are providing full airport security services,
produced record revenues in January 2020 but like most airports
around the world has been impacted by COVID-19 and was closed to
all but essential aircraft traffic in March 2020 although still
requiring protection. During the closed period we have therefore
maintained full employment of all our local staff and maintained
the security of the airport, utilising any free time to put our
various teams through intensive refresher training courses. This
was not only the right and moral thing to do to protect our staff
but has enabled us to ramp up operations at very short notice when
required. I am pleased to report that the airport re-opened to air
traffic on 22 July 2020 and Westminster is assisting the return of
carriers and passengers by the installation of specialist systems
such as sanitation tunnels and we look forward to a resumption of
revenues as flights begin to return and passenger numbers recover
in the weeks and months ahead.
I am also pleased to report that during the COVID-19 lockdown
period in West Africa, not only did we maintain full employment of
our local staff who would have otherwise suffered adversity, but we
supported the local communities where we operate who were
undergoing particular hardship with supplies of commodities such as
rice, sugar and clean water.
It is pleasing to note that our container security screening
operations at the new $1.5 billion container port expansion project
in Ghana, although impacted by COVID-19, continued to generate
healthy revenues, even during the country's lockdown period, which
demonstrates the value of this long term managed services contract.
Under the 5-year extendable contract, Westminster and our local
partners, Scanport, are responsible for the screening of containers
passing through the port, with Westminster responsible for
technical management and operations and Scanport being responsible
for local management, costs and employment. Revenues are generated
by a container screening fee which is shared between the port
operator, Scanport and Westminster. The project went live in July
2019 and during the start-up phase in the second half of 2019, with
just the initial two berths open, the project generated circa
$600,000 USD for Westminster with margins in line with our managed
services model. Despite COVID-19, in H1 2020 the project has
generated over $1 million USD for Westminster. A third berth has
recently opened, and the fourth berth is due to open later this
year, expanding the TEU (Twenty Foot Equivalent) container
throughput capacity from around 1 million to around 3.5 million per
annum when completed. The project therefore has significant growth
potential as the port builds capacity.
Our aviation security and associated training operations around
the world also commenced 2020 on a strong footing but again was
heavily impacted by COVID-19 restrictions on travel and the closure
of airports. We had to put several secured training contracts on
hold and furlough a number of our trainers, although business
development work continued. I am pleased to report that our first
'face to face' training course resumed in July 2020 and when
international travel restrictions are lifted, we anticipate a
resumption of our international training programmes in airports and
elsewhere around the world. It is however pleasing to note that in
May 2020 Westminster's aviation security training operations were
graded as 'Outstanding' by the UK Civil Aviation Authority which is
an accolade and clearly demonstrates the quality of our
services.
In June 2020 we signed a new strategic alliance agreement with
JP International Training Limited, a leading aviation, maritime,
and commercial training organisation, extending our e-Learning
platforms and further enhancing our e-product services. Non-contact
distance learning is now a growing sector and has been accelerated
by the current pandemic and this alliance will provide clients with
access to industry-leading distance training, delivered at our
clients' own pace and tailored to enhance their employees
knowledge, skills and ability, so they may carry out their roles
effectively.
Our guarding operations have had a mixed performance during the
first 6 months of 2020. With the closure of businesses and sites
where we had guarding operations around the country due to
COVID-19, our revenues were naturally impacted. Conversely, during
the same period we also secured new contracts such as the GBP1
billion Stanton Cross development project in Northamptonshire and
recently another major building company in the UK. We are pleased
to report that some of the closed sites are now once again
reopening, generating revenues. HS2, which was given go ahead in
February 2020, is another opportunity for our guarding business
which we identified some time ago and have already become a
registered security provider to the main contractors.
Our guarding operations are also involved in tendering for new
opportunities in other market sectors including NHS & logistics
companies, incorporating a cross section of skills from Group
companies.
Our French business, Euro Ops which we acquired in May 2019, is
proving to be a valuable strategic addition to the Group. The
company has not only brought new skills, services and revenues to
the Group but provides greatly improved access to Francophone
countries for the wider Group services, with some interesting
project opportunities being pursued. The company provides aviation
focussed services such as humanitarian flights & logistics,
emergency flights, flight operations, charter and storage
management. An example of our ability to provide emergency services
in challenging locations is that we have just successfully
completed the emergency repatriation of 80 stranded NGO staff at
short notice from Mali, West Africa.
We continue to pursue the many large-scale and long-term
business opportunities around the world each one of which can
deliver step changes in revenue growth. One of our key targets for
2020 is to secure at least one more large-scale managed services
contract and we are working hard to deliver on that goal, although
clearly international travel restrictions are creating
challenges.
Technology Division
The COVID-19 pandemic has demonstrated the value of the Group's
product sales and technology business which has had an excellent
start to the year with H1 revenues up by 54% to GBP4.7m (H1 2019:
GBP3.1m), more than offsetting the impact of COVID-19 elsewhere in
the business. This was largely due to a massive 323% increase in
product sales to cGBP3.4 million (H1 2019: GBP0.8 million) where we
have reaped the benefits of our forward planning.
We supplied safety and screening systems and products all over
the world including some notable sales. By way of example one of
the world's largest investment management companies selected
Westminster to provide fever screening and sanitisation equipment
to all of their worldwide offices as part of their back to work
programme. We were also contracted to provide screening equipment
to a number of high-profile clients around the world including
several major US football clubs, all of which demonstrates our
global reach and profile and our status as a trusted brand.
I am pleased to report we recently conducted fever screening
detection trials with Menzies Aviation at Stockholm International
Airport. The trial, utilising Westminster's advanced fever
screening systems, was conducted over several weeks with various
airlines and proved to be very successful. Menzies operate at more
than 200 airport locations across 6 continents and we are now in
discussions with them regarding collaboration and business
opportunities.
We have also instigated various other strategies to increase
sales in anticipation of a changing business climate as the world
continues to face challenges from the COVID-19 pandemic, which is
likely to have an impact on business and travel for some
considerable time yet. One such strategy was to develop the
distribution of protective and sanitisation products through
'unattended retail' vending. We secured exclusive rights to medical
vending machines for the UK and set about organising a professional
distribution network. One of the challenges was how we would
monitor, restock and maintain the units around the country, and we
resolved this by entering into strategic alliances with SV365 who
are specialists in the sector and have the distribution network. We
are now involved in a rolling out systems to numerous locations,
shopping malls, transport hubs etc. It is normal practice for
owners of the vending locations to receive a percentage share of
the items sold and one common theme with all owners is the lack of
transparency with normal vending companies - we solved the issue by
use of our advanced telemetry systems being installed in each
machine which means not only ourselves but the 'host' can have
complete visibility of everything sold, in real time. Our machines
are vending a range of face masks and sanitisation products and we
are developing relationships with a number of key manufacturers. In
this respect I am pleased to confirm that we have recently agreed
arrangements with a leading designer label, Mango, to vend their
products.
In Q1 2020 just before travel restrictions were imposed, we
manged to deliver and receive payment for the final container
screening equipment unit to a second port in Asia as part of the
$3.4 million USD contract secured in 2019. Installation of the unit
and collection of the installation fee of USD $0.18 million will be
finalised once travel restrictions have been lifted.
We are continuing to expand our portfolio of products and
services to stay ahead of market demand. By way of example the
demand for effective sanitisation equipment and systems is now
overtaking the demand for fever screening systems and we have
therefore expanded our range of sanitisation products, sourcing new
suppliers from around the world.
The Kingdom of Saudi Arabia is a huge potential market for
Westminster particularly given the Crown Prince's 2030 vision which
offers opportunities for several of our Group services. We
established offices and deployed a business development team to the
Kingdom in late 2019 and together with our joint venture partners,
Hazar International, are pursuing several large-scale
opportunities. Progress on some of these developments have been
hampered by the COVID-19 travel restrictions and lockdowns,
although we are hopeful many of the restrictions will be eased
soon, allowing for completion of the registration of Westminster
Arabia in the Kingdom. We remain excited by the prospects from this
venture.
We operate one of the world's largest security websites which is
currently undergoing a major upgrade, the first phase of which
launched in June 2020 and is already generating good levels of
interest. The new website will, in due course, encompass an
enlarged and sophisticated e-commerce section building our online,
non- contact sales together with enlarged customer and investor
engagement areas.
Financial
Revenues at GBP7.0 million (H1 2019: GBP5.6 million) for the
first half year were ahead of the Boards' expectations, this is
despite the impact of COVID-19 on parts of our business. The
Services division revenues were GBP2.2 million (H1 2019: GBP2.5
million). The Services revenue decrease reflects both the closure
of our West African Airport and Training revenues affected by
COVID-19. However, the decrease was mitigated by the acquisition of
Euro Ops, Ghana Tema Port revenue and strong passenger numbers in
our West African Airport up to its closure in March. Technology
division revenues were up 54% at GBP4.7 million (H1 2019: GBP3.1
million). The Technology division benefited from strong product
sales and the delivery of the second half of the Asia Port truck
scanners.
The Group generated a gross profit of GBP2.8 million (H1 2019:
GBP2.0 million) which equates to a gross margin of 40% (H1 2019:
36%). The percentage increase is due to product mix.
Despite the expansion of the Group and a revenue increase of
24%, H1 2020 administration expenses remained unchanged at GBP2.3
million (H1 2019: GBP2.3 million).
Exceptional items amounted to GBP0.3 million (H1 2019: GBP0.1
million). In H1 2020 the exceptional was due to the closure of the
West African airport to all but essential aircraft traffic but
which still required to be protected and restrictions on our
training and guarding activities. H1 2019 the exceptional items
primarily related to pre-contract costs.
Profit before tax was GBP0.24 million (H1 2019: loss of GBP0.79
million) and an EBITDA profit of GBP0.89 million (H1 2019: EBITDA
loss of GBP0.05 million).
Our underlying cash interest cost was GBP0.18 million (H1 2019:
GBP0.26 million) reflecting primarily the interest on the
convertible loan notes. A further GBP0.06 million (H1 2019: GBP0.24
million) of non-cash financing charges arose from the amortisation
and extension of the convertible loan notes. In total, the
financing costs amounted to GBP0.24 million (H1 2019: GBP0.5
million).
Earnings per share were a profit of 0.16 pence (H1 2019: loss of
0.58 pence) on a higher number of shares.
Statement of Financial Position and Cash Flow
The Group ended the period with a GBP1.6 million cash balance
(2019: GBP0.3 million). The net cash inflow from operating
activities was GBP0.7 million (H1 2019: inflow of GBP0.2 million).
GBP0.2 million cash was used in investing activities (H1 2019:
GBP0.1 million) and a movement of GBP1.85 million (before expenses)
came from raising new equity (H1 2019: GBP0.5 million equity) for
working capital and repayment of the Convertible Loan Note (CLN).
GBP0.5 million cash was paid to redeem 25% of the CLN and GBP0.1
million of the CLN converted into ordinary shares.
GBP1.5 million of the cash inflow came from drawing down on the
Financing Facility in January 2020 further details of this facility
are set out in note 14.
At the end of the period, the Group had a Convertible Loan Note
(CLN) outstanding with a principal of GBP1.6 million (H1 2019:
GBP2.2 million). The coupon is 15% payable quarterly in arrears, it
has a conversion price of 10 pence and is repayable in May 2021. It
is our intension to redeem the CLN at the earliest opportunity.
Brexit
The Board has considered the potential risks and impact of the
Brexit negotiations on the business. A large portion of our
revenues and direct costs are outside of both the UK and EU and
conducted largely in US Dollars and potentially Euros. We do not at
this time consider that Brexit, in whatever form, will materially
affect our ability to conduct our business and our offices in both
Germany and France provide us with European bases from which to
mitigate some of the potential issues.
The one impact that Brexit is having on our business is on
exchange rate movement between GBP and USD/Euro. The Board
continues to monitor the situation.
Outlook
The COVID-19 pandemic continues to create considerable
uncertainty for businesses around the world although our business
model with multiple revenue streams from diverse sources and
regions worldwide does provide Westminster with both opportunities
and a degree of resilience, as can be seen from the way we have
successfully navigated the crisis so far.
No-one can accurately predict how long the pandemic will last
nor how long or how severe the resulting financial impact will be
on world business, however whilst we do not underestimate the
challenges and uncertainties that remain, not least with air
travel, we believe our business model, our multiple sources of
revenue, many of which are from long term recurring revenue streams
and our ability to adapt to changing circumstances means
Westminster is well placed to continue to expand and prosper.
These uncertain times present both challenges and opportunities
for Westminster, and over the next few months and years we have an
opportunity to build on our current achievements and our year on
year growth, with the potential for step changes in revenues from
the many prospects we are pursuing. The Board and I remain
committed to delivering on this potential.
Peter Fowler,
Group Chief Executive
14 August 2020
Condensed consolidated statement of comprehensive income
(unaudited)
for the six months ended 30 June 2020
Note Six months Six months Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
Total Total Total
GBP'000 GBP'000 GBP'000
Revenue 5 6,959 5,610 10,889
Cost of sales (4,186) (3,592) (6,444)
Gross profit 2,773 2,018 4,445
Administrative expenses (2,297) (2,302) (5,268)
Operating profit / (loss) 7a 476 (284) (823)
Analysis of operating profit/
loss 476 (284) (823)
Add back depreciation and amortisation 108 106 215
Add back share-based expense - - 556
Add back exceptional items 8 309 129 106
--------------- -------------- -------------
EBITDA profit / loss from underlying
operations 6 893 (49) 54
---------------------------------------- ----- --------------- -------------- -------------
Finance Costs 9 (240) (503) (620)
Profit / (loss) before taxation 236 (787) (1,443)
Taxation 7b - - 26
Total comprehensive income/ (loss)
for the period 236 (787) (1,417)
Profit / (loss) and total comprehensive income/ (loss)
attributable to:
Owners of the parent 182 (762) (1,398)
Non-controlling interest 54 (25) (19)
Profit / (loss) and total comprehensive
income/ (loss) 236 (787) (1,417)
----------------------------------------------- --------------- -------------- -------------
Earnings per share (pence) - profit
/ (loss) 7c 0.16p (0.58)p (1.02)p
Condensed consolidated balance sheet (unaudited)
as at 30 June 2020
As at As at 30 As at 31
30 June June 2019 December
2020 2019
Note GBP'000 GBP'000 GBP'000
Goodwill 616 607 614
Other intangible assets 10 205 130 129
Property, plant and equipment 11 1,947 2,077 1,979
Deferred Tax 907 889 907
Total Non-Current Assets 3,675 3,703 3,629
-------------------- ----------- -------------------------
Inventories 444 47 47
Trade and other receivables 3,767 1,610 2,566
Cash and cash equivalents 1,582 309 557
Total Current Assets 5,793 1,966 3,170
-------------------- ----------- -------------------------
Assets of disposal groups classified
as held for sale - 170 170
Total Assets 9,468 5,839 6,969
==================== =========== =========================
Called up share capital 13 16,040 13,503 14,540
Share premium account 9,579 9,525 9,577
Merger relief reserve 300 300 300
Share based payment reserve 1,318 858 1,166
Equity Reserve on Convertible
Loan Note 398 352 423
Revaluation reserve 133 133 133
Retained earnings (23,662) (23,347) (23,844)
-------------------- ----------- -------------------------
(Deficit)/Equity attributable
to
Owners of the parent 4,106 1,324 2,295
Non-controlling interest (310) (371) (365)
Total Shareholders' (Deficit)/Equity 3,796 953 1,930
-------------------- ----------- -------------------------
Non-current borrowings 14 231 298 2,510
Total Non-Current Liabilities 231 298 2,510
-------------------- ----------- -------------------------
Current borrowing 14 3,137 2,462 60
Contractual liabilities 58 432 73
Trade and other payables 2,246 1,641 2,396
Total Current Liabilities 5,441 4,535 2,529
-------------------- ----------- -------------------------
Liabilities of disposal groups classified - 53 -
as held for sale
Total Liabilities 5,672 4,886 5,039
Total Liabilities and Shareholders'
Equity 9,468 5,839 6,969
==================== =========== =========================
Condensed consolidated statement of changes in equity
(unaudited)
for the six months ended 30 June 2020
Called Share Merger Share Equity Revaluation Retained Total Non-controlling Total
up share premium relief based reserve reserve earnings interest share-holders'
capital account reserve payment on CLN equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1(st)
January
2020 14,540 9,577 300 1,166 423 133 (23,844) 2,295 (365) 1,930
Profit for the
period - - - - - - 182 182 54 236
Total
comprehensive
income for
the period - - - - - - 182 182 54 236
------------------- ------------- -------------- ------------- ---------------- ------------------- ------------- ---------- ---------------- ---------------
Transactions with owners in their capacity
as owners:
Issue of new
shares 1,500 350 - - - - - 1,850 - 1,850
Costs of new
share issues - (348) - - - - - (348) - (348)
CLN Movements - - - - (25) - - (25) - (25)
Issue of new
warrant - - - 152 - - - 152 - 152
Other
movements in
equity - - - - - - - - 1 1
1,500 2 - 152 (25) - - 1,629 1 1,630
--------------- ------------------- ------------- -------------- ------------- ---------------- ------------------- ------------- ---------- ---------------- ---------------
As at 30th
June 2020 16,040 9,579 300 1,318 398 133 (23,662) 4,106 (310) 3,796
--------------- ------------------- ------------- -------------- ------------- ---------------- ------------------- ------------- ---------- ---------------- ---------------
Called Share Merger Share Equity Revaluation Retained Total Non-controlling Total
up share premium relief based reserve reserve earnings interest share-holders'
capital account reserve payment on CLN equity
reserve
As at 1(st)
January
2019 13,003 9,568 300 858 222 133 (22,595) 1,489 (346) 1,143
Loss for the
period - - - - - - (762) (762) (25) (787)
Total
comprehensive
loss for the
period - - - - - - (762) (762) (25) (787)
Transactions with owners in their capacity
as owners:
Issue of new
shares 500 - - - - - - 500 - 500
Costs of new
share issues - (43) - - - - - (43) - (43)
CLN extension - - - - 130 - - 130 - 130
IFRS 16
adjustment
for
prior years - - - - - - 1 1 - 1
Other
movements in
equity - - - - - - 9 9 - 9
500 (43) - - 130 - 10 597 - 597
--------------- ------------------- ------------- -------------- ------------- ---------------- ------------------- ------------- ------ ---------------- ---------------
As at 30th
June 2019 13,503 9,525 300 858 352 133 (23,347) 1,324 (371) 953
--------------- ------------------- ------------- -------------- ------------- ---------------- ------------------- ------------- ------ ---------------- ---------------
Called Share Merger Share Equity Revaluation Retained Total Non-controlling Total
up share premium relief based reserve reserve earnings interest share-holders'
capital account reserve payment on CLN equity
reserve
As at 1(st)
January
2019 13,003 9,568 300 858 222 133 (22,594) 1,490 (346) 1,144
Loss for the
period - - - - - - (1,398) (1,398) (19) (1,417)
Total
comprehensive
loss for the
period - - - - - - (1,398) (1,398) (19) (1,417)
------------------- ------------- -------------- ------------- ---------------- ------------------- ------------- ---------- ---------------- ---------------
Transactions with owners in their capacity
as owners:
Shares issued
for cash 1,500 - - - - - - 1,500 - 1,500
Cost of share
issues - - - - - - (100) (100) - (100)
Share based
payment
charge - - - 556 - - - 556 - 556
Lapse of share
options - - - (44) - - 44 - -
Lapse of
warrants - - - (204) - - 204 - - -
Exercise of
warrants
and share
options 37 9 - - - - - 46 - 46
CLN Movement - - - - 201 - - 201 - 201
1,537 9 - 308 201 - 148 2,203 - 2,203
--------------- ------------------- ------------- -------------- ------------- ---------------- ------------------- ------------- ---------- ---------------- ---------------
AS AT 31
December 2019 14,540 9,577 300 1,166 423 133 (23,844) 2,295 (365) 1,930
--------------- ------------------- ------------- -------------- ------------- ---------------- ------------------- ------------- ---------- ---------------- ---------------
Consolidated Cash Flow Statement (unaudited)
for the six months ended 30 June 2020
Six months Six months Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
Total Total Total
Note GBP'000 GBP'000 GBP'000
Profit / (loss) after taxation 236 (787) (1,417)
Tax - - (26)
------------------- --------------------- -------------
Profit / (loss) before taxation 236 (787) (1,443)
Non-cash adjustments 12 43 909 1,412
Net changes in working capital 12 457 59 (552)
------------------- --------------------- -------------
Cash inflow/(outflow) from operating
activities 736 181 (583)
Investing activities
Purchase of property, plant and equipment 11 (84) (105) (70)
Purchase of intangible assets 10 (103) - (72)
Acquisition of subsidiary - (16) (18)
------------------- --------------------- -------------
Cash outflow from investing activities (187) (121) (160)
Financing activities
Gross proceeds from the issue of ordinary
shares and exercise of warrants 1,850 500 1,547
Equity placing and sharing agreement (1,750) - -
loan
Costs of share issues (348) (43) (100)
Mezzanine Loan 1,500 - -
Repayment of CLN in cash (508) - -
Reduction in finance lease debt (66) - (60)
Finance cost on lease liabilities 9 (20) - (54)
Interest paid 9 (182) (498) (323)
------------------- --------------------- -------------
Cash inflow/(outflow) from financing
activities 476 (41) 1,010
Change in cash and cash equivalents
in the period 1,025 19 267
Cash and cash equivalents at the beginning
of the period 557 290 290
Cash and cash equivalents at the end
of the period 1,582 309 557
Notes to the unaudited financial statements
for the six months ended 30 June 2020
1. General information and nature of operations
Westminster Group Plc (the "Company") was incorporated on 7
April 2000 and is domiciled and incorporated in the United Kingdom
and quoted on AIM. The Group's financial statements for the
six-month period ended 30 June 2020 consolidate the individual
financial information of the Company and its subsidiaries. The
Group designs, supplies and provides advanced technology security
solutions and services to governmental and non-governmental
organisations on a global basis.
The Group does not show any distinct seasonality.
2. Significant changes in the current reporting period
The Coronavirus (COVID-19) outbreak was declared a Public Health
Emergency of international Concern on 30 January 2020 and on the 11
March 2020 the World Health Organisation (WHO) elevated the
outbreak to a global pandemic. In just a few weeks the COVID-19
virus had spread from a single city in China right across the
globe, creating a worldwide healthcare crisis with millions of
citizens infected and a tragic toll of life. Governments around the
world reacted in various ways with many closing borders, some
putting large parts of their populations on lockdown and imposed
travel restrictions. This has had a profound impact on the global
economy and businesses across the globe, the like of which has not
been experienced in a generation.
Westminster is fortunate in that the business model we have
developed is based on multiple revenue streams, many of which are
from long term or recurring contracts, from diverse sources in
varying parts of the world. As such Westminster is in a better
position than many companies to weather the impact of the crisis.
Whilst the COVID-19 crisis had an impact on our airport security
operations including a disruption to our guarding, training and the
closure of our West African Airport from 22 March to 22 July, our
sales of products has risen significantly.
Whilst uncertainty still exists around the world, particularly
in terms of travel, we remain positive about our prospects for H2
and the full year.
3. Basis of preparation
This condensed consolidated interim financial report for the
half-year reporting period ended 30 June 2020 has been prepared in
accordance with Accounting Standard IAS 34 Interim Financial
Reporting.
The interim report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the
year ended 31 December 2019 and any public announcements made by
Westminster Group Plc during the interim reporting period.
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting period
and the adoption of new and amended standards as set out below.
Reference has already been made in the Statement of Financial
Position and Cash Flow above to the Finance Facility drawn down in
January 2020. This has been accounted for as two separate
transactions the sale of GBP1.75m shares on deferred terms and a
loan facility. Because the sale of shares over time is meant to
extinguish the loan should there be any imbalance whereby either a
profit is made on the share sales or the proceeds may not cover the
debt these will be treated as either a contingent asset or a
contingent liability respectively. As at the 30 June 2020 it was
determined that it was too early in the process to assess the
likely outcome.
These consolidated interim financial statements for the six
months ended 30 June 2020 have neither been audited nor formally
reviewed by the Group's auditors. The financial information for the
year ended 31 December 2019 set out in this interim report does not
constitute statutory accounts as defined in section 435 of the
Companies Act 2006 but is derived from those accounts. The
statutory financial statements for the year ended 31 December 2019
have been reported on by the Company's auditors and delivered to
the Registrar of Companies. A copy is available at
https://www.wsg-corporate.com/investor-relations/publications/
.
3(a) New and amended standards adopted by the Group
A number of new or amended standards became applicable for the
current reporting period. These include:
-- IAS 1 Presentation of Financial Statements and IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors
(Amendment - Definition of Material)
-- IFRS 3 Business Combinations (Amendment - Definition of Business)
-- Revised Conceptual Framework for Financial Reporting
The Group did not have to change its accounting policies or make
retrospective adjustments as a result of adopting these
standards.
3(b) Impact of standards issued but not yet applied by the entity
The Group does not expect to be significantly impacted by the
adoption of standards issued but not yet applied.
4. Going concern
The directors have considered the impact of COVID-19 and the way
the Group has traded positively through the crisis during the first
6 months together with the recent reopening of the West African
Airport and a return of training and guarding operations. At the
time of approving this interim report, and in view of the
foregoing, the directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. Thus, they continue to adopt the going
concern basis of accounting in preparing the financial
statements.
5. Segment reporting
Operating segments
The Board considers the Group on a Business Unit basis. Reports
by Business Unit are used by the chief decision-makers in the
Group. The Business Units operating during the period are the main
operating work streams, Services and Technology (products and
solutions)
30 JUNE
6 Months to 2020
Services Technology Group Group
Division Division and Central Total
----------------------------- --------------------- -------------------- ----------------- -------------------
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- --------------------- -------------------- -----------------
6 MONTHS TO JUNE 2020
Supply of products 22 3,360 - 3,382
Supply and installation
contracts - 1,184 - 1,184
Maintenance and services 2,146 167 - 2,313
Training courses 80 - - 80
-----------------------------
Revenue 2,248 4,711 - 6,959
----------------------------- --------------------- -------------------- -----------------
Segmental underlying EBITDA 966 1,060 (1,133) 893
Exceptional items 8 (309) - - (309)
Depreciation & amortisation (54) (4) (50) (108)
Segment operating result 603 1,056 (1,183) 476
Finance cost - - (240) (240)
----------------------------- --------------------- -------------------- ----------------- -------------------
Profit/ (loss) before tax 603 1,056 (1,423) 236
Income tax charge - - - -
Profit/(loss) for the
financial
year 603 1,056 (1,423) 236
--------------------- -------------------- -----------------
Segment assets 4,234 1,724 3,550 9,508
----------------------------- --------------------- -------------------- -----------------
Segment liabilities 2,584 692 2,311 5,587
----------------------------- --------------------- -------------------- -----------------
Capital expenditure 28 9 150 187
----------------------------- --------------------- -------------------- -----------------
30 JUNE
6 Months to 2019
Services Technology Group Ongoing
Division Division and Central Operations
Costs
--------------------- -------------------- -----------------
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------------------- -------------------- -----------------
6 MONTHS TO JUNE 2019
Supply of products - 799 - 799
Supply and
installation
contracts - 2,122 - 2,122
Maintenance and
service 2,371 141 - 2,512
Training and
Consultancy 176 1 - 177
-----------------------
Revenue 2,547 3,063 - 5,610
----------------------- --------------------- -------------------- -----------------
Segmental underlying
EBITDA 617 84 (750) (49)
Exceptional items 7 (129) - - (129)
Depreciation &
Amortisation (48) (15) (43) (106)
Segment Operating
result 440 69 (793) (284)
Finance Cost (2) (2) (499) (503)
----------------------- --------------------- -------------------- ----------------- -----------------
Profit/(loss) before
tax 438 67 (1,292) (787)
Segment assets 2,917 1,191 1,731 5,839
--------------------- -------------------- -----------------
Segment liabilities 1,348 935 2,603 4,886
Capital expenditure 6 6 63 75
----------------------- --------------------- -------------------- -----------------
Year to: 31 DECEMBER
2019
Services Technology Group Group
Division Division and Central Total
--------------------- -------------------- -----------------
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------------------- -------------------- -----------------
12 MONTHS TO DECEMBER
2019
Supply of products - 1,598 - 1,598
Supply and
installation
contracts - 3,468 - 3,468
Maintenance and
services 5,291 298 - 5,589
Training courses 234 - - 234
-----------------------
Revenue 5,525 5,364 - 10,889
----------------------- --------------------- -------------------- -----------------
Segmental underlying
EBITDA 1,084 525 (1,555) 54
Share option expense - - (556) (556)
Exceptional items
(note 4) (105) - (1) (106)
Depreciation &
amortisation (72) (30) (113) (215)
Segment operating
result 907 495 (2,225) (823)
Finance cost (1) (3) (616) (620)
----------------------- --------------------- -------------------- ----------------- -----------------
Profit/ (loss) before
tax 906 492 (2,841) (1,443)
Income tax charge 18 - 8 26
Profit/(loss) for the
financial
year 924 492 (2,833) (1,417)
--------------------- -------------------- -----------------
Segment assets 2,949 2,023 1,997 6,969
----------------------- --------------------- -------------------- -----------------
Segment liabilities 1,072 1,433 2,534 5,039
----------------------- --------------------- -------------------- -----------------
Capital expenditure 48 4 18 70
----------------------- --------------------- -------------------- -----------------
Marketing segments
Our extensive portfolio of products and services are categorised
in three key focus sectors - Land, Sea and Air. We are starting to
report on these sectors.
Six months ended Six months Twelve months
30 June 2020 ended 30 June ended 31 December
2019 2019
GBP'000 GBP'000 GBP'000
--------------- -------------------
Land 3,654 3,102 4,348
Sea 1,985 16 1,911
Air 1,320 2,492 4,630
Total revenue 6,959 5,610 10,889
--------------- ================= =============== ===================
The increase in sea is related to the delivery of one of the two
advanced container screening solutions to an Asian port and the
managed services contract in Tema Port Ghana. The decline in Air is
due to the temporary closure in Q2 by the government, in response
to COVID-19, of our West African Airport and the suspension of
training.
Geographical areas
The Group's international business is conducted on a global
scale, with agents present in all major continents. The following
table provides an analysis of the Group's sales by geographical
market, irrespective of the origin of the goods/services.
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
------------------------------ -------------
United Kingdom and
Europe 1,458 1,204 1,957
Africa 1,930 2,085 4,899
Middle East 582 2,226 2,397
Rest of the World 2,989 95 1,636
Total revenue 6,959 5,610 10,889
-------------------- ------------------------------
6. Reconciliation of adjusted EBITDA
A reconciliation of adjusted EBITDA to operating profit before
income tax is provided as follows:
Six months Six months Year ended
ended ended
30 June 2020 30 June 2019 31 December 2019
Note GBP'000 GBP'000 GBP'000
Profit / (loss) from
operations 476 (284) (823)
Depreciation, amortisation
and impairment charges 108 106 215
------------- ------------- -----------------
EBITDA 584 (178) (608)
Share based expense - - 556
Exceptional items 8 309 129 106
Adjusted EBTIDA profit
/ (loss) 893 (49) 54
============= ============= =================
Adjusted EBITDA is an alternative reporting measure. For further
details refer to the 31 December 2019 accounts.
7. Profit and Loss information
a. Significant Items
Profit for the half year includes the following items that are
unusual because of their nature, size or incidence:
-- A Solutions delivery of one of the two advanced container
screening solutions to an Asian port GBP1.2m (In 2019 there was a
Solutions delivery in the Middle East of GBP2.1m);
-- Refer Note 8 exceptional items.
b. Income Tax
Income tax expense is recognised based on management's estimate.
The Group has significant tax losses in the UK brought forward from
prior years and does not expect to have to provide any material
amount for tax.
Deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. The Group's
projections show the expectation of future profits, hence in 2018 a
deferred tax asset was recognised. A review was performed in 2019
and again this year, considering COVID-19, which has confirmed
those expectations.
c. Earnings 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 period. 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
period 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:
Six months Six months Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
'000 '000 '000
Number of issued ordinary shares at the
start of period 145,403 130,028 130,028
Effect of shares issued during the period 6,186 3,923 8,834
Weighted average basic and diluted number
of shares for period 151,589 133,951 138,862
=========== =========== =============
Earnings GBP'000 GBP'000 GBP'000
Loss and total comprehensive expense (continuing) 236 (763) (1,445)
Loss and total comprehensive expense (discontinued) - (24) 28
Loss and total comprehensive expense 236 (787) (1,417)
=========== =========== =============
Earnings per share 0.16p (0.58)p (1.02)p
8. Exceptional items
Six months Six months Year ended
ended ended
30 June 2020 30 June 2019 31 December
2019
GBP'000 GBP'000 GBP'000
Middle East contract
pre-contract
costs - 105 105
Ferry closure costs - 24 1
Temporary West African 291 - -
Airport
closure
Training Suspended 9 - -
Guarding Curtailed 9 - -
Total exceptional items 309 129 106
============================ ============================ ==============================
The project signed in 2018 for a long-term security support
service in a Middle East airport pre-contract costs ceased on 30
June 2019 when the project was permanently put on hold.
The Sierra Queen Ferry was contracted to be sold in December
2019 with the sale being recognised in Q1 2020.
Our West African airport operations had been seeing record
passenger number in Q1 2020, but on 22 March the government
announced it was restricting and cancelling flights for 3 months.
We therefore had a cost without any revenue. We had to maintain the
security of the airport and our ability to return to normal
operations once the airport re-opened.
The imposition of lockdown and the closure of boarders has
disrupted our Training business. Again, there is cost without any
revenue associated with it.
9. Finance costs
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Finance cost on lease liabilities (20) (49) (54)
Interest payable on bank and
other borrowings - (1) (1)
Interest expenses on convertible
loan notes (182) (263) (375)
Other financing costs (38) (190) (190)
Total finance costs (240) (503) (620)
================================= =============== =============
10. Other Intangible assets
Group Website and
Software
Six months Six months Twelve months
to 30 June to 30 June to 30 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Cost
At start of period 297 225 225
Additions 103 50 72
Disposals (3) - -
At end of period 397 275 297
=============== ===================== =============================
Accumulated amortisation and impairment
At start of period 168 125 125
Charge for the year 26 20 43
Disposals (2) - -
At end of period 192 145 168
=============== ===================== =============================
Net book value 205 130 129
11. Property, plant and equipment
Group Freehold Plant Office Motor Right Total
property and equipment equipment vehicles of use
fixtures assets
and fittings
2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost or
valuation
At 1
January
2020 1,039 727 998 164 260 3,188
Additions 34 34 16 - - 84
Disposals - (1) (17) (6) (62) (86)
At 30 June
2020 1,073 760 997 158 198 3,186
================ =================== ==================== ============== ============= =============
Accumulated depreciation and impairment
At 1
January
2020 38 476 428 160 107 1,209
Charge for
the year 10 21 19 1 31 82
Disposals - (1) (17) (6) (28) (52)
At 30 June
2020 48 496 430 155 110 1,239
================ =================== ==================== ============== ============= =============
Net book
value at
30 June
2020 1,025 264 567 3 88 1,947
================ =================== ==================== ============== ============= =============
2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost or
valuation
At 1
January
2019 1,031 471 1,194 159 260 3,115
Additions 7 35 7 5 - 54
Disposals - - - - - -
Transfer - 224 (158) - - 66
At 30 June
2019 1,038 730 1,043 164 260 3,235
================ =================== ==================== ============== ============= =============
Accumulated depreciation and impairment
At 1
January
2019 17 236 553 151 46 1,003
Charge for
the year 10 18 24 4 31 87
Disposals - - - - - -
Transfer - 202 (134) - - 68
At 30 June
2019 27 456 443 155 77 1,158
================ =================== ==================== ============== ============= =============
Net book
value at
30 June
2019 1,010 274 600 9 184 2,077
================ =================== ==================== ============== ============= =============
2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost or
valuation
At 1
January
2019 1,031 471 1,194 159 260 3,115
Additions 8 32 25 5 - 70
Disposals - - (63) - - (63)
Transfer - 224 (158) - - 66
At 31
December
2019 1,039 727 998 164 260 3,188
================ =================== ==================== ============== ============= =============
Accumulated depreciation and impairment
At 1
January
2019 17 236 553 151 46 1,003
Charge for
the year 21 38 43 9 61 172
Disposals - - (34) - - (34)
Transfer - 202 (134) - - 68
At 31
December
2019 38 476 428 160 107 1,209
================ =================== ==================== ============== ============= =============
Net book
value at
31
December
2019 1,001 251 570 4 153 1,979
================ =================== ==================== ============== ============= =============
12. Cash flow adjustments and changes in working capital
Six months Six months Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
GBP'000 GBP'000 GBP'000
Adjustment for non-cash items
Depreciation, amortisation and impairment
of non-financial assets 108 106 215
Effect of assets / liabilities acquired - - 2
Finance costs 240 503 620
Disposal & adjustment of fixed assets - - 2
IFRS 16 interest adjustment (4) (5) -
Non-cash accounting for CLN (199) 296 35
Adjustment to deferred tax - - (18)
FX effect on goodwill (2) - -
Shares not issued for cash on conversion (100) 9 -
Share-based payment expenses - - 556
----------------------
Total adjustments 43 909 1,412
=========== =========== ======================
Net changes in working capital:
(Increase) / decrease in inventories (397) 27 27
(Increase) / decrease in trade and other
receivables 549 3,006 2,050
(Decrease) / increase in contract liabilities (15) (2,006) (2,365)
(Decrease) / increase in trade and other
payables 150 (968) (113)
Decrease in assets of disposal group classified
as held for sale 170 - -
Decrease in liabilities of disposal group
classified as held for sale - - (151)
Total changes in working capital 457 59 (552)
=========== =========== ======================
13. Called up share capital
Ordinary 6 months to 30th 6 months to 30th Year to 31st December
Share June 2020 June 2019 2019
Capital
Number GBP'000 Number GBP'000 Number GBP'000
------------- ---------------------- ----------------- ------------------- ------------- ------------------- -------------
At the
beginning
of the
period 145,402,511 14,540 130,027,511 13,003 130,027,511 13,003
Arising on
exercise
of warrants
and share
options - - - - 375,000 37
Arising on
conversion
of
convertible
loan
note 1,000,000 100 - - - -
Other issues
for
cash 14,000,000 1,400 5,000,000 500 15,000,000 1,500
At the end
of the
period 160,402,511 16,040 135,027,511 13,503 145,402,511 14,540
------------- ---------------------- ----------------- ------------------- ------------- ------------------- -------------
The 14m shares were all issued to RiverFort Global Opportunities
PCC and YA II PN Ltd. (together the "Investor") under the Financing
Facility described in Note 14.
14. Borrowings
In January 2020, the Group announced that it had commenced a
staged redemption programme of the Company's existing GBP2.245m
Convertible Secured Loan Notes ("CSLNs"). It also announced a
Financing Facility to provide the Company with a GBP3m Mezzanine
Loan Facility which may be drawn down in tranches, each repayable
over 18 months, together with monthly cash inflows under the Equity
Placing and Sharing Agreement, based on the Company's share price
performance, which will go towards the monthly repayment costs of
the loan.
The Mezzanine Loan Facility is subject to a 0.75% Commitment Fee
and each drawdown will have a term of 18 months at a 6.5% rate of
interest and a 5% drawdown fee. Repayments will commence 3 months
after drawdown and be followed by 15 equal monthly payments. The
Company can if it wishes, elect to convert any of its monthly
payments or amounts due by issuing the Investor with a convertible
note giving conversion rights equal to the amount concerned, in
which case the Investor will have 12 months to convert the note
into ordinary shares of the Company at the lower of 14.54p or the
90% 5 day volume weighted average price immediately preceding the
date of such notice. The Company may also elect to make early
repayment of any outstanding amount subject to a 5% early
redemption premium.
Separately under the Equity Placing and Sharing Agreement
("EPSA") the Investor subscribed GBP1.75m ("Subscription Amount")
for ordinary shares in the Company at a price of 12.5p per ordinary
share ("Subscription Shares") on deferred payment terms subject to
a 3% placing commission. The Investor will have the right to sell
the Subscription Shares, subject to certain volume restrictions,
over a 12-month period, extendable to 24 months at the Investor's
discretion. We have extended the facility by 2 months to wait for
the share price to recover after the COVID-19 stock market
reduction. Under the EPSA the Investor and its affiliates are
prohibited from holding any short position in or to forward or
short sell Westminster shares. The Investor may elect to convert
the balance, if any, of the remaining Mezzanine Loan into ordinary
shares of 14.54p once all the Subscription Shares have been sold.
The Investor has also agreed that Subscription Shares may be sold
to any third party introduced by Westminster, individually or as
part of a future fundraising.
Under the EPSA, in each calendar month, the Investor will make a
payment to the Company calculated as 1/12 of the Subscription
Amount adjusted by the proportionate difference between the Market
Price (being the volume weighted average price of the lowest 10
days in the month of settlement) and the benchmark price of 13.625p
("Benchmark Price"). Where the Market Price is greater than the
Benchmark Price both the Company and Investor will receive 50% of
the excess so that the Company and the Investor will share the
benefit of growth in the Company's share performance over a
12-month period.
The Company agreed to issue to the Investor 3,499,222 warrants
at 14.54p, being a premium of 34% to the closing price of 10.85p on
21 January 2020, that can be exercised between 6 and 48 months from
issue.
The 14,000,000 Subscription Shares were issued on 23 January
2020. Funds from share sales are offsetting payments of capital and
interest under the Mezzanine Loan.
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Current borrowings (due
< 1 year)
Mezzanine Loan 1,500 - -
Convertible loan note 1,593 2401 -
Lease Debt 44 61 60
Total current borrowings 3,137 2,462 60
Non-current borrowings
(due > 1 year)
Convertible loan note - - 2,233
Convertible Unsecured loan
note 183 171 179
Lease Debt 48 127 98
Total non-current borrowings 231 298 2,510
Total borrowings 3,368 2,760 2,570
================================ ================================ =============
15. Discontinued operation
a. Description
At 30 September 2017 the Group took the decision to dispose of
its ferry operation in Sierra Leone, from this date the operation
together with the related finance obligations was being actively
marketed for sale, and therefore has been reclassified as a
disposal group held for sale within the financial statements.
b. Financial performance and cash flow information
Six months Six months Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
Revenue 565 - -
Expenses (537) - -
Other gains/(losses) (28) (24) 28
----------------------- ----------- -------------
(Loss)/profit before income tax - (24) 28
Income tax benefit/(expense) - - -
----------------------- ----------- -------------
(Loss)/profit from discontinued operation - (24) 28
Net changes in working capital (362) (98) (151)
Net cash used in discontinued operations (362) (122) (123)
----------------------- ----------- -------------
Earnings per share from discontinued
operations (pence) - (0.02) 0.02
c. Sale of the Sierra Queen
In December 2019, we finalised the sale of the Sierra Queen
which had a book value of GBP170,000. The vessel has been sold for
a total consideration of $699,250 US Dollars, payable by $40,000
deposit and the balance by 45 monthly payments ending Q1 2024.
Under the sale agreement the Company, at its own cost, shipped the
vessel to the purchaser in Greece in Q1 2020 and it will be secured
by a mortgage charge over the vessel until final payment has been
received.
16. Contingencies
There are no material contingent assets and contingent
liabilities (2019: Nil).
17. Events after the Reporting Period
In July we recommence faced to face training programme at our
training centre in Oxfordshire and also on 22 July our West African
airport was reopened for air traffic.
18. Basis of preparation and approval of half-year report
This condensed consolidated interim financial report for the
half-year reporting period ended 30 June
2020 has been prepared in accordance with Accounting Standard
IAS 34 Interim Financial Reporting.
The interim report does not include all the notes of the type
normally included in an annual financial
report. Accordingly, this report is to be read in conjunction
with the annual report for the year ended 31
December 2019 and any public announcements made by Westminster
Group Plc during the interim reporting
period.
19. Copies of interim financial statements
A copy of these interim financial statements is available on the
Company's website, www.wsg-corporate.com and from the Company
Secretary at the company's registered office, Westminster House,
Blacklocks Hill, Banbury, Oxfordshire, OX17 2BS.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR SFAFMDESSEFA
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August 14, 2020 02:00 ET (06:00 GMT)
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