TIDMWSG
RNS Number : 1653R
Westminster Group PLC
04 March 2021
The information contained in this announcement is deemed by the
Company to constitute inside information as stipulated under
Article 7 of the Market Abuse Regulations (EU) No 596/2014, which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018. With the publication of this announcement via a Regulatory
Information Service, this inside information is now considered to
be in the public domain.
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 worldwide, is
pleased to provide a trading update for the 12 months to 31
December 2020 and an update on its current business activities.
2020 Review
A defining aspect of 2020 has been the global impact of Covid-19
and we are pleased to report that, despite parts of our business
being adversely impacted by lockdowns and travel restrictions, the
strength of our business model, with multiple revenue streams from
multiple sources around the world, together with our global
footprint, has meant that we were better placed than many companies
to deal with the numerous challenges created by the pandemic.
We commenced 2020 on a positive note, with visibility over circa
GBP8m of annual recurring revenues from our long-term managed
services, guarding and maintenance contracts. Our managed services
contracts were running at record levels in early 2020, we had a
healthy backlog of work in hand, our product sales, guarding and
training businesses were all operating successfully, and we had
positive momentum with a number of our major business development
activities. In short, we were on course to continue our year on
year revenue growth and to deliver healthy post tax profits.
As an international business we regularly monitor global
activities for issues that may affect our business and in early
January 2020 we identified the potential threats and opportunities
from the Covid-19 outbreak, long before it was declared a pandemic.
We took early steps accordingly to mitigate any adverse impact and
to maximise opportunities including restructuring our operations to
maintain services and keep our people safe. We undertook targeted
marketing and significantly increased our stockholding of products
such as fever screening equipment, in order to deal with expected
demand. These measures were to prove invaluable as the Covid crisis
unfolded and logistics became challenging.
H1 2020 was very successful, delivering a 24% increase over H1
2019 revenues, continuing our four years of double-digit % revenue
growth, and resulting in a pre-tax profit of circa GBP230k. This,
in part, was due to record revenues from our West African airport
operations for the first two months of the year, the delivery of
the 2nd Asian Port scanner (secured in 2019), a successful campaign
around Covid sales resulting in a surge of product sales, a
significant contract for a global financial institution worth $665k
supplying fever screening to their 85 offices in 37 countries and
of course an increasing contribution from our Ghana operations.
H2 2020 was a more challenging period due to the prolonged
impact of Covid lockdowns and travel restrictions. Our West African
airport operations were completely closed for several months,
reopening only at the end of July 2020 with significantly reduced
traffic volumes, even lower than we experienced during the height
of the Ebola crisis. However, we witnessed a steady and sustained
improvement in passenger numbers towards the end of the 2020 year,
which is encouraging for 2021. Our training and guarding operations
were heavily impacted throughout H2 2020 and the spike in Covid
related sales we saw in H1 2020 dwindled as companies retrenched
and reduced spending due to uncertainty. Ghana continued to show
increasing revenues making a healthy contribution.
Despite the challenges created by Covid, and in some cases
because of it, 2020 was a busy year and a year in which, due to our
early action and multiple revenue stream business model, we managed
to not only navigate the crisis, maintain our operations and keep
our people safe but continued to make progress on a number of
fronts. During the year we expanded our marketing activities,
including a UK focussed TV advertising campaign across a variety of
channels, with the theme 'Get Back to Work Safely'. We launched a
new group wide website as part of our One Company, One Vision
programme. We continued to deliver on business opportunities,
supplying goods and services to a wide range of customers in 78
countries across 6 continents including National Governments,
Sports Stadia, Educational Facilities, Conference/Exhibition
Centres, Shopping Malls, Financial Institutions, Hospitality Sector
and Medical Centres etc., and we achieved some notable contract
wins, such as the coveted Palace of Westminster contract. We
undertook various initiatives such as the deployment of PPE vending
machines, fever screening trials and expanded our strategic
partnerships. We continued to invest in our worldwide business
development programmes in order to deliver on our growth potential,
particularly in our long-term major managed services projects.
All these activities helped deliver 2020 results which, although
encouraging given the pandemic, would have been even better If it
were not for the prolonged travel restrictions and lockdown periods
in the year which delayed the signing of various anticipated
contracts and the delivery of various already signed, such as the
Palace of Westminster and the final completion of our Asian Port
project, the revenues of which will now be recognised in 2021.
Despite all the challenges, delays and revenue slippage into 2021,
we expect to report revenues of around GBP10m (2019: GBP10.9m) but
due to improved margins still expect to deliver a pre-tax loss
broadly in line with market expectations.
As part of our Corporate Social Responsibility activities we
were pleased to continue to provide much needed support through the
Covid pandemic to the communities in which we operate through our
own registered charity the Westminster Group Foundation.
Outlook
The outlook for 2021 is looking positive. Revenues from existing
contracts, including long-term managed services and the revenue
slippage from 2020 provide a basis for our optimism and together
with the ongoing recovery from Covid-19 in our guarding, training
and West African Airport operations, which in January 2021
experienced the highest passenger numbers since the airport closure
in March 2020, some 14.6% ahead of budget, is all encouraging.
These together with recent and anticipated new contract wins, are
expected to put the Company back on course for the double digit %
revenue growth in 2021 that we were experiencing prior to the Covid
impact, although the Directors recognise that the global outlook
remains uncertain and subject to change.
We continue to invest in our worldwide business development
programmes in order to deliver on our growth potential,
particularly in our long-term major managed services projects. At
the time of our recent fundraising in December 2020 we listed out
some of the larger project opportunities we are pursuing, which
remain in play, and we also announced that we were in the advanced
stages of securing a long-term contract with the Government of an
African country for the provision of airport security managed
services relating to five airports in the country. Whilst in the
current climate we have, frustratingly, experienced delays in
travelling and finalising matters we remain excited by this
near-term prospect although there can never be absolute certainty
of outcome or timing.
The final legalisation of documents relating to the formation of
Westminster Arabia in the Kingdom of Saudi Arabia was delayed by
several months due to the closure of government and embassy offices
as a result of Covid, which has delayed progressing some of the
project opportunities we have been working on in the Kingdom,
however this process is now being completed and we look forward to
Westminster Arabia being an important part of our growth through
2021 and beyond. The Kingdom is a potentially significant market
for Westminster particularly given the Crown Prince's 2030 vision
which offers opportunities for several of our Group services.
To date our product sales are in line with budget and our Ghana
operations continue to remain largely unaffected by Covid and
continue to generate healthy revenues, which demonstrates the value
of this long-term managed services contract. In 2020 the project
generated circa $2.6 million USD revenues for Westminster, and we
expect this to continue to rise as the port expands capacity and
the fourth berth comes on stream later in 2021.
We have recently entered into an exclusive service agreement
with a company about to launch an innovative and verified Covid
testing service with UK government approval, under which
Westminster will provide a range of specialist services. Whilst too
early to assess the likely scale or success of the project, this
initiative could potentially lead to interesting business
developments in what could be an important new service in helping
to open up the leisure and entertainment sector.
We are closely monitoring geo-political events with regards to
the US and Iran regarding the JCPOA agreement. As reported in our
2018 Annual Report and our 2019 interim Report we previously signed
a 15 year, EUR24 million per annum contract for airport security,
with the full support on the British Government, which was put on
hold when President Trump unilaterally withdrew from JCPOA. Should
circumstances change and US and international sanctions, including
banking, be lifted, there remains an opportunity for our German
office to revisit this prospect.
The GBP5m capital raise we undertook in December has enabled the
Company to repay all its outstanding Convertible Loan Notes and the
outstanding RiverFort loan, saving some GBP300k annual costs, which
means we enter 2021 debt free, other than operating leases and with
the capital reserves to deal with the current global uncertainties
and to undertake current and anticipated new projects.
At this current time and excluding the revenue that was expected
to be recognised in 2020 that will now be recognised in 2021, the
Company expects to meet 2021 financial year market expectations at
the revenue and PBT level.
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
Strand Hanson Limited (Financial & Nominated
Adviser)
James Harris 020 7409 3494
Ritchie Balmer
Arden Partners plc (Broker)
Richard Johnson (Corporate)
Tim Dainton/Simon Johnson (Broking) 020 7614 5900
Walbrook (Investor Relations)
Tom Cooper 020 7933 8780
Paul Vann
Nick Rome Westminster@walbrookpr.com
Notes:
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 (including
Fever 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.
The Westminster Group Foundation is part of the Group's
Corporate Social Responsibility activities.
www.wg-foundation.org
The Foundation's goal is to support the communities in which the
Group operates by working with local partners and other established
charities to provide goods or services for the relief of poverty
and the advancement of education and healthcare particularly in the
developing world.
The Westminster Group Foundation is a Charitable Incorporated
Organisation, CIO, registered with the Charities Commission number
1158653.
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