TIDMWSG
RNS Number : 5123I
Westminster Group PLC
13 August 2021
Westminster Group Plc
('Westminster', the 'Group' or the 'Company')
Interim Results for the six months to 30 June 2021
& Investor Presentation
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
2021.
Operational Highlights:
-- Secured 20-year managed services contract - 5 airports in the DRC.
-- Secured 10-year managed services contract - port in West Africa.
-- Post-period, secured high profile contract to provide
security services to the Tower of London.
-- 5-year security contract for the Palace of Westminster (UK Parliament) underway.
-- Ghana port operations continue to perform well.
-- West African Airport operations recovering ahead of expectations.
-- Developed new Covid-19 testing programme initiative in partnership with Certific.
-- Aviation training business graded as 'Outstanding in all
Areas' by UK Civil Aviation Authority.
-- Awarded Queen's Award for Enterprise in recognition of
outstanding contribution to International Trade.
Financial Highlights:
-- Group revenues up 16% from H2 2020 to GBP3.5 million (H1
2020: GBP7.0 million, H2 2020: GBP3.0 million).
-- Gross margin increased to 45% (H1 & H2 2020: 40%).
-- Operating Loss of GBP0.93 million (H1 2020: Profit GBP0.48
million, H2 2020 Loss GBP1.22 million).
-- Loss per share of 0.32p (H1 2020: Profit of 0.16p, H2 2020: Loss 0.59p).
-- Administration expenses slightly up at GBP2.5 million (H1
2020: GBP2.3 million, H2 2020: GBP2.4 million) as we increase
selling capacity.
-- GBP2.5m equity raise completed in June 2021 for recently won and future projects.
-- Group debt free, excluding GBP0.05 million of imputed lease
debt (30 June 2020: GBP3.37 million debt, 31 December 2020: GBP0.07
million lease debt).
-- Cash balance as at 30 June 2021: GBP3.1 million (30 June
2020: GBP1.6 million, 31 December 2020: GBP2.1 million).
Commenting on the results and current trading, Peter Fowler,
Chief Executive of Westminster Group, said:
"In our 2020 Annual Report we stated the outlook for 2021 was
looking positive and this remains the case.
"Not only are we seeing recovery and growth in our existing
operations, but we are developing new initiatives and revenue
streams, such as the Covid-19 testing programme, and in recent
weeks and months we have announced several significant new
large-scale, long-term contract wins that will produce a several
million-pound step change in our annual revenues, together all
underpinning confidence in our business model and growth
trajectory.
"Covid-19 has, of course, continued to create challenges during
the first half of 2021 with the global uncertainty causing many
businesses and organisations to be cautious on their spending plans
and with travel restrictions still in place in many parts of the
world, resulting, as previously announced, in further
'right-shifting' of certain expected contracts and revenues.
Because of this our first half year revenues are therefore down on
H1 2020, which had record revenues for the first three months
before the Covid-19 pandemic had any real impact. However, at
GBP3.5m, H1 revenues are 16% ahead of the second half of 2020
(GBP3.0m) demonstrating recovery is underway and we believe that,
providing the expected easing of restrictions and the resultant
recovery continues, together with the recently secured contracts
and our strong pipeline we are on track to deliver a strong
performance for 2021 and we are confident in our future
forecasts.
"In the last few years, we have achieved a lot, despite the
challenges, and it is rewarding to see the quality of our services
and our many achievements being widely recognised. I am extremely
proud therefore, that in April 2021, Westminster was granted the
Queen's Award for Enterprise in recognition of outstanding
achievement in international trade. The award ceremony and
Westminster's open day will now take place at Westminster House on
3 September 2021. Shareholders who would like to attend may
register their interest here www.wg-plc.com/queens-award-2021
."
Investor Presentation
Westminster Group Plc is pleased to announce that Peter Fowler
(CEO) and Mark Hughes (CFO) will provide a live presentation
relating to Westminster Group PLC 2021 Half Year Results via the
Investor Meet Company platform on 17th Aug 2021 at 11:00am BST.
The presentation is open to all existing and potential
shareholders. Questions can be submitted pre-event via your
Investor Meet Company dashboard up until 9am the day before the
meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add
to meet Westminster Group Plc via:
https://www.investormeetcompany.com/westminster-group-plc/register-investor
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 (NGOs) 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.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN
ARTICLE 7 OF THE MARKET ABUSE REGULATION NO. 596/2014 ("MAR") WHICH
IS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT
2018. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN
Chief Executive O cer's Review
Overview
In our 2020 Annual Report we stated the outlook for 2021 was
looking positive and this remains the case.
A key strength of our business is the multiple revenue stream
business model we have developed which provides a degree of
resilience to world events beyond our control and which has proved
invaluable during the Covid-19 crisis.
In this respect, not only are we seeing recovery and growth in
our existing operations, but we are developing new initiatives and
revenue streams, such as the Covid-19 testing programme.
Additionally, in recent weeks and months we have announced several
significant new large-scale, long-term contract wins that will
produce a several million-pound step change in our annual revenues,
thereby underpinning confidence in our business model and growth
trajectory.
Covid-19 has, of course, continued to create challenges during
the first half of 2021 with the global uncertainty causing many
businesses and organisations to be cautious on their spending plans
and with travel restrictions still in place in many parts of the
world, resulting, as previously announced, in further
'right-shifting' of certain expected contracts and revenues.
Because of this our first half year revenues are therefore down on
H1 2020, which had record revenues for the first three months
before the Covid-19 pandemic had any real impact. However, at
GBP3.5m H1 revenues are 16% ahead of the second half 2020 (GBP3.0m)
demonstrating recovery is underway and we believe that, with the
ongoing recovery in our existing business together with the
recently secured contracts, anticipated new contracts and our
strong pipeline and providing the expected easing of restrictions
and delays and the resultant recovery continues, are on track to
meet full year expectations and we are confident in our 2022 and
future forecasts.
In the last few years, we have achieved a lot and it is
rewarding to see the quality of our services and our many
achievements being widely recognised. I am extremely proud that in
April 2021, Westminster was granted the Queen's Award for
Enterprise in recognition of outstanding achievement in
international trade. The award ceremony and Westminster's open day
will now take place at Westminster House on 3 September 2021. In
November 2020 the London Stock Exchange selected Westminster as one
of a 1,000 companies to inspire Britain and in May 2020, and again
in April 2021, the UK Civil Aviation Authority (CAA) graded our
aviation training business as 'Outstanding in all Areas'. These are
all important accolades for our business and a testament to the
skill and hard work of all our people.
Divisional Review
Services Division
Our Services Division has performed well and delivered some
notable achievements in the period.
In our 2020 Annual Report we stated one of our key goals for
2021 was to secure at least one more long-term managed services
contract and in that respect, I am delighted that, with an easing
of restrictions, we have not only been able to secure one, but two,
significant new long-term contract wins.
In December 2020 we announced we were in the advanced stages of
securing a long-term contract for 5 airports in an African country.
We had been pursuing this opportunity since our acquisition of our
French business Euro Ops in 2019 and we expected to secure this
contract in 2020 but due to the various lockdowns and travel
restrictions in place progress was delayed. I was delighted
therefore to be able to announce on 15 June 2021 that we had
secured and signed a 20-year manged services contract to provide
security services to 5 airports in the Democratic Republic of the
Congo ('DRC'), Central Africa. This was a very significant
achievement and not only means we will now have an established
presence in a new region of Africa but also the project offers
substantial growth opportunities. We are excited about this new
contract and looking forward to commencing operations once
formalities are finalised. I am pleased to report we have already
commenced deployment of key personnel for the project, our 100%
subsidiary, Westminster Aviation Security Services RDC, which will
be employing the local personnel and other logistics, has now been
formed, local professional advisors engaged and we are currently
preparing the operational logistics ready for commencement.
In addition, on 16 June 2021, we further announced that we had
signed another long-term managed service contract to provide port
screening services in West Africa for the next 10+ years. We had
been pursuing and developing this opportunity for several years and
it is another important win for the Company that further extends
our global footprint and profile in the port screening sector.
Likewise, personnel deployment and company formation processes are
underway. Our project team is working with the client to prepare
the land for the port screening and inspection areas.
Furthermore, in early July, we announced we had been awarded yet
another high-profile contract to supply security services to help
protect the historic Royal Palace and Fortress of the Tower of
London. Security of such a landmark building, which is open to the
public, is paramount and Westminster has been contracted to provide
inter alia, professional security services to the pedestrian and
vehicular entrances.
These important new contract wins not only demonstrate our
global reach but, as we have stated on a number of occasions, that
large-scale projects such as these do take time to develop and
negotiate and equally demonstrate that we have the skills and
resources required to successfully deliver on such opportunities.
Together these new contracts alone will add, once fully
operational, several million pounds to our annual revenues and
together with our other managed services and recurring revenue
contracts, underpin confidence in our future forecasts and
growth.
In addition to these important new contracts, we are encouraged
in the recovery and growth of our existing operations.
Our West African Airport managed services operation continues to
be ahead of our expectations (currently, in June 2021, it was 70%
of pre-Covid-19 levels) although we do not expect to see a full
recovery to pre-Covid-19 levels until late 2022 although it is
encouraging that this operation is recovering faster than the
average African and European airport traffic and we may see full
recovery earlier than forecast.
Our port managed services operations in Ghana have not been
materially affected by Covid-19 and continue to perform well. With
a 4th berth due to become operational later in 2021, we expect to
see further growth with this important project.
Both our guarding and training businesses were heavily impacted
by Covid-19 lockdowns and travel restrictions, but we are
encouraged by the recovery we are beginning to see in both
businesses, and we expect this to continue as hopefully travel
restrictions ease.
Our guarding business has already secured important new business
and we are pursuing a number of interesting new opportunities which
could see revenues from this business increase dramatically.
We are also pleased to see our training business securing new
contracts from governments and organisations and is now operating
ahead of budget. The global pandemic has demonstrated the
importance of distance and online training and the strategic
decision we took some time ago to invest in building an online
training capability, both in house and through strategic
partnerships, will prove to be very beneficial and we expect this
part of our business to continue to grow.
We continue to develop new opportunities and initiatives such as
our partnership with Certific in their new Covid-19 testing
programme for which Westminster is providing verification services.
This new initiative has delivered six figure revenues in H1 as the
programme began its roll out and, whilst it is uncertain how long
Covid-19 testing will remain a requirement, our expectation is this
will be some time yet. Indeed, there is a likelihood this could be
a requirement for international travel for the foreseeable future
and we therefore are looking at additional opportunities in this
sector and expect revenues from such to continue to grow into 2022
and possibly beyond.
Technology Division
We continue to experience healthy enquiry levels and during H1
2021 have secured orders for our products and services from over 40
countries around the world, although Covid-19 and travel
restrictions have caused some delays in delivery.
The caution on spending by many companies during H2 2020,
continued into H1 2021 and this has meant that purchasing decisions
regarding some of our larger technology project opportunities have
been deferred. We are encouraged however that discussions have now
re-commenced on several of these opportunities and one or more of
these could land at any time.
In this respect, and given budget constraints for many companies
resulting from the global pandemic, we are exploring with debt
funding providers means of moving large scale projects from a
'capital' purchase to a longer term, 5+ years, 'revenue' model
which would also include maintenance and training, along with
value-add services such as Big Data acquisition for applications
such as border crossings. Given that some of these project
opportunities can be multi-million dollars in value we believe this
model brings added value which sets us apart from the competition
and will be attractive to many potential clients; indeed, we are
already in discussions with a few government bodies on this basis.
With large scale projects such as these there is never certainty of
outcome or timing, but we are very optimistic this initiative will
lead to material and additional long-term revenues.
In the UK we are pleased to report that the Palace of
Westminster contract which was secured in 2020 but could not be
started until recently due to Covid-19 restrictions is well
underway and we are already looking at possible extensions to this
project.
As previously advised, we have established Westminster Arabia in
the Kingdom of Saudi Arabia jointly with our partners Hazar
International but have been delayed from finalising licences due to
travel restrictions. I am pleased to report however that with some
easing of restrictions we are preparing to re-enter the Kingdom to
finalise matters which should be completed by Q4 2021. This will be
an important step in enabling us to formally bid on and pursue the
many medium and large-scale opportunities we have been
investigating there.
Financial
Revenues at GBP3.5 million (H1 2020: GBP7.0 million) for the
first half year were 16% ahead of the second half 2020 performance
(H2 2020: GBP3.0 million). H1 2020 benefited from record passenger
numbers in our West African Airport operation in the first quarter.
When Covid-19 hit this, as well as our training and guarding
revenues, it was more than counterbalanced by an increase in fever
detection product sales. However, this trend did not last as travel
restrictions and shutdowns around the world worsened and business
confidence declined, with growing uncertainty leading to companies
conserving resources and reducing spending. H1 2021 represents
recovery as the airport operations increased, to reach in June just
over 70% of a normal year (better than many other airports, latest
global traffic levels are reported as 38% of normal), plus training
and guarding are both once again operational and new contracts are
being secured.
The Group generated a gross profit of GBP1.6 million (H1 2020:
GBP2.8 million, H2 2020: GBP1.2m) which equates to a gross margin
of 45% (H1 & H2 2020: 40%). The percentage increase is due to
the increase in high margin managed services sales in H1 2021.
Administration expenses have increased by 8% (GBP0.2m) from H1
2020 to H1 2021. Almost all of this represents an investment in an
expanded sales team to drive revenues forward in future
periods.
The operating loss was GBP0.93 million (H1 2020: profit of
GBP0.48 million; H2 2020 loss of GBP1.20 million). This is
primarily driven by the drop in sales due to Covid-19 effect offset
by improving gross margin.
Our underlying cash interest cost was zero (H1 2020: GBP0.18
million) The 2020 figure was primarily the interest on the
convertible loan notes which were redeemed in December 2020. There
were no non-cash financing charges arising from the amortisation
and extension of the convertible loan notes (H1 2020: GBP0.06
million). A small amount, GBP2,000 (H1 2020: GBP20,000), was booked
in respect of operating leases in accordance with IFRS16. In total,
the financing costs have been effectively eliminated (H1 2020:
GBP0.24 million).
Earnings per share were a loss of 0.32 pence (H1 2020: a profit
of 0.16 pence, H2 2020: 0.59p loss).
Statement of Financial Position and Cash Flow
The Group ended the period with a GBP3.1 million cash balance
(2020: GBP1.6 million). The net cash outflow from operating
activities was GBP1.3m (H1 2020: inflow of GBP0.7 million). GBP0.1
million cash was used in investing activities (H1 2020: GBP0.2
million) and a movement of GBP2.5 million (before expenses) came
from raising new equity (H1 2020: GBP1.85 million new equity). The
funds raised will be used in the new contracts which are starting
in the second half of 2021, as well as to help secure the Company's
prospective pipeline of future contracts.
At the end of the period, the Group had no borrowings other than
a balance of GBP48,000 arising from the IFRS 16 treatment of
operating leases (2020: GBP3,368,000 of which GBP92,000 was for
operating leases).
Outlook
The business model and opportunities we have been developing
over the years have created a foundation from which we can deliver
significant growth and sustainable revenue streams and build
shareholder value. The recent large-scale long-term contracts we
have secured which will provide an upward step change in revenues,
the recovery and growth in our existing operations and the numerous
new opportunities we are developing underpin our confidence for the
future growth of our business.
Whilst acknowledging that there is still global uncertainty and
delays may still impact the delivery of certain projects in the
short term, providing the expected easing of restrictions and
delays and the resultant recovery continues we are on track to meet
full year expectations. We are however confident in our 2022 and
future forecasts. The Board and I remain committed to delivering on
our significant growth potential.
Peter Fowler,
Group Chief Executive
13 August 2021
Condensed consolidated statement of comprehensive income
(unaudited)
for the six months ended 30 June 2021
Note Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
Total (restated) Total
Total
GBP'000 GBP'000 GBP'000
Revenue 5 3,477 6,959 9,945
Cost of sales (1,912) (4,186) (5,974)
Gross profit 1,565 2,773 3,971
Administrative expenses (2,492) (2,297) (4,715)
Operating (loss) / profit 7a (927) 476 (744)
Analysis of operating loss/profit (927) 476 (744)
Add back depreciation and amortisation 117 108 225
----------- ----------- -------------
EBITDA (loss)/profit from underlying
operations 6 (810) 584 (519)
---------------------------------------- ----- ----------- ----------- -------------
Finance Costs 8 (2) (240) (17)
(Loss) / profit before taxation (929) 236 (761)
Taxation 7b - - 31
Total comprehensive income for
the period (929) 236 (730)
Profit / (loss) and total comprehensive income attributable
to:
Owners of the parent (920) 182 (560)
Non-controlling interest (9) 54 (170)
Profit / (loss) and total comprehensive
income (929) 236 (730)
----------------------------------------------- ----------- ----------- -------------
Earnings per share (pence) 7c (0.32p) 0.16p (0.45p)
The 2020 half year results have been restated to remove an
exceptional item not recognised in the 2020 audited results. In H1
2020 an exceptional item was recorded to reflect the effect of
Covid-19. This was reviewed at the full year and following guidance
from the Finance Reporting Council, it was decided that this should
not have been recorded as an exceptional item.
Condensed consolidated balance sheet (unaudited)
as at 30 June 2021
As at As at As at 31
30 June 30 June December
2021 2020 2020
Note GBP'000 GBP'000 GBP'000
Goodwill 613 616 614
Other intangible assets 151 205 187
Property, plant and equipment 1,882 1,947 1,901
Deferred Tax 956 907 956
Total Non-Current Assets 3,602 3,675 3,658
--------- -------------------- ------------------
Inventories 585 444 773
Trade and other receivables 2,328 3,767 2,438
Cash and cash equivalents 3,054 1,582 2,143
Total Current Assets 5,967 5,793 5,354
--------- -------------------- ------------------
Non-current receivable 484 - 484
Total Assets 10,053 9,468 9,496
========= ==================== ==================
Called up share capital 9 16,322 16,040 16,278
Share premium account 16,346 9,579 14,069
Merger relief reserve 300 300 300
Share based payment reserve 1,050 1,318 1,050
Equity Reserve on Convertible - 398 -
Loan Note
Revaluation reserve 139 133 139
Retained earnings (25,162) (23,662) (24,242)
--------- -------------------- ------------------
Equity attributable to
Owners of the parent 8,995 4,106 7,594
Non-controlling interest (544) (310) (535)
Total Shareholders' Equity 8,451 3,796 7,059
--------- -------------------- ------------------
Non-current borrowings 10 16 231 29
Total Non-Current Liabilities 16 231 29
--------- -------------------- ------------------
Current borrowing 10 32 3,137 38
Contractual liabilities 97 58 100
Trade and other payables 1,457 2,246 2,270
Total Current Liabilities 1,586 5,441 2,408
--------- -------------------- ------------------
Total Liabilities 1,602 5,672 2,437
Total Liabilities and Shareholders'
Equity 10,053 9,468 9,469
========= ==================== ==================
Condensed consolidated statement of changes in equity
(unaudited)
for the six months ended 30 June 2021
Called Share Merger Share Revaluation Retained Total Non-controlling Total
up premium relief based reserve earnings interest share-holders'
share account reserve payment equity
capital reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1(st)
January
2021 16,278 14,069 300 1,050 139 (24,242) 7,594 (535) 7,059
Loss for the
period - - - - - (920) (920) (9) (929)
Total
comprehensive
income for
the period - - - - - (920) (920) (9) (929)
-------- -------- -------- -------- ------------ --------- -------- ---------------- ---------------
Transactions with owners
in their capacity as
owners:
Issue of new
shares 44 2,456 - - - - 2,500 - 2,500
Costs of new
share
issues - (179) - - - - (179) - (179)
44 2,277 - - - - 2,321 - 2,321
--------------- -------- -------- -------- -------- ------------ --------- -------- ---------------- ---------------
As at 30th
June
2021 16,322 16,346 300 1,050 139 (25,162) 8,995 (544) 8,451
--------------- -------- -------- -------- -------- ------------ --------- -------- ---------------- ---------------
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
--------------- ------------------- ------------- -------------- ------------- ---------------- ------------------- ------------- ---------- ---------------- ---------------
for the twelve months ended 31 December 2020
Called Share Merger Share Equity Revaluation Retained Total Non-controlling Total
up premium relief based reserve reserve earnings interest share-holders'
share account reserve payment on CLN equity
capital reserve
--------------- -------- -------- -------- -------- -------- ------------ --------- ------ ---------------- ---------------
AS AT 1
JANUARY
2020 as
previously
stated 14,540 9,577 300 1,166 423 133 (23,844) 2,295 (365) 1,930
Prior year
adjustment - - - (188) - - 147 (41) - (41)
---------
AS AT 1
JANUARY
2020 Restated 14,540 9,577 300 978 423 133 (23,697) 2,254 (365) 1,889
--------------- -------- -------- -------- -------- -------- ------------ --------- ------ ---------------- ---------------
Shares issued
for
cash 1,525 5,225 - - - - - 6,750 - 6,750
Cost of share
issues - (733) - - - - - (733) - (733)
Share based
payment
charge - - - 87 - - - 87 - 87
Lapse of share
options - - - (15) - - - (15) - (15)
Exercise of
warrants
and share
options 213 - - - - - - 213 - 213
Revaluation of
freehold
property - - - - - 6 - 6 - 6
Other
movements
in equity - - - - - - 15 15 - 15
CLN Movement - - - - (423) - - (423) - (423)
TRANSACTIONS
WITH
OWNERS 1,738 4,492 - 72 (423) 6 15 5,900 - 5,900
--------------- -------- -------- -------- -------- -------- ------------ --------- ------ ---------------- ---------------
Total
comprehensive
expense for
the
year - - - - - - (560) (560) (170) (730)
AS AT 31
DECEMBER
2020 16,278 14,069 300 1,050 - 139 (24,242) 7,594 (535) 7,059
--------------- -------- -------- -------- -------- -------- ------------ --------- ------ ---------------- ---------------
Consolidated Cash Flow Statement (unaudited)
for the six months ended 30 June 2021
Six months Six months Year ended
ended ended 30 31 December
30 June June 2020 2020
2021
Total Total Total
Note GBP'000 GBP'000 GBP'000
(Loss) / Profit after taxation (929) 236 (730)
Tax - - (31)
------------------- ----------- -------------
Loss before taxation (929) 236 (761)
Non-cash adjustments 8 122 43 (59)
Net changes in working capital 8 (517) 457 (1,033)
------------------- ----------- -------------
Cash inflow/(outflow) from operating
activities (1,324) 736 (1,853)
------------------- ----------- -------------
Investing activities
Purchase of property, plant and equipment (65) (84) (111)
Purchase of intangible assets - (103) (121)
------------------- ----------- -------------
Cash outflow from investing activities (65) (187) (232)
------------------- ----------- -------------
Financing activities
Gross proceeds from the issue of ordinary
shares and exercise of warrants 2,500 1,850 6,963
Equity placing and sharing agreement - (1,750)
loan -
Costs of share issues (179) (348) (733)
Mezzanine Loan - 1,500 -
Repayment of CLN in cash - (508) (2,222)
Reduction in finance lease debt (19) (66) (69)
Finance cost on lease liabilities 8 (2) (20) (5)
Interest paid 8 - (182) (262)
Other loan repayments, including interest - - (1)
------------------- ----------- -------------
Cash inflow from financing activities 2,300 476 3,671
------------------- ----------- -------------
Change in cash and cash equivalents
in the period 911 1,025 1,586
Cash and cash equivalents at the beginning
of the period 2,143 557 557
Cash and cash equivalents at the end
of the period 3,054 1,582 2,143
------------------- ----------- -------------
Notes to the unaudited financial statements
for the six months ended 30 June 2021
1. General information and nature of operations
This condensed consolidated interim financial report for the
half-year reporting period ended 30 June 2021 has been prepared in
accordance with Accounting Standard IAS 34 Interim Financial
Reporting.
These unaudited interim financial statements were approved by
the board on 12 August 2021. The 31 December 2020 numbers are
extracted from the Group's audited accounts.
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 2020 and any public announcements made by Westminster
Group Plc during the interim reporting
period.
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 2021 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 result reflected a continuing return towards normal from the
damage inflicted by the Covid-19 pandemic.
However, the most significant move forward for the group has
already been mentioned in the Chief Executive O cer's Review above.
That is the signing of two new managed services contracts.
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 2021 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 2020 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.
These consolidated interim financial statements for the six
months ended 30 June 2021 have neither been audited nor formally
reviewed by the Group's auditors. The financial information for the
year ended 31 December 2020 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 2020
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
There are no new or amended standards relevant to the group
which became applicable for the current reporting period. However,
the group has adopted early the following amended Standards:
-- IAS 16 - Property, Plant and Equipment
-- IAS 37 - Provisions, Contingent Liabilities and Contingent Assets
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 although at a
lower level. The equity capital raises in December 2020 and June
2021 have ensured that the group has sufficient funds to perform
its obligations under recently signed contracts. 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 2021
Services Technology Group Group Total
and Central
---------------------- --------------------- -------------------- ----------------- ---------------------
GBP'000 GBP'000 GBP'000 GBP'000
---------------------- --------------------- -------------------- ----------------- ---------------------
6 MONTHS TO JUNE 2021
Supply of products 10 678 - 688
Supply and
installation
contracts - 329 - 329
Maintenance and
services 2,209 153 - 2,362
Training courses 51 47 - 98
Revenue 2,270 1,207 - 3,477
--------------------- -------------------- -----------------
Segmental underlying
EBITDA 966 1,060 (2,836) (810)
Depreciation &
amortisation (54) (4) (59) (117)
Segment operating
result 912 1,056 (2,895) (927)
Finance cost - - (2) (2)
---------------------- --------------------- -------------------- ----------------- ---------------------
Profit/ (loss) before
tax 912 1,056 (2,897) (929)
Income tax charge - - - -
Profit/(loss) for the
financial
year 912 1,056 (2,897) (929)
--------------------- -------------------- -----------------
Segment assets 3,912 1,136 5,005 10,053
---------------------- --------------------- -------------------- ----------------- ---------------------
Segment liabilities 716 474 412 1,602
---------------------- --------------------- -------------------- ----------------- ---------------------
Capital expenditure 20 - 45 65
---------------------- --------------------- -------------------- ----------------- ---------------------
30 JUNE
6 Months to 2020 (restated)
Services Technology Group Group Total
and Central
--------------------- --------------------- -------------------- ----------------- -------------------
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 657 1,060 (1,133) 584
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
---------------------- --------------------- -------------------- -----------------
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 Six months Twelve months
ended 30 June ended 30 June ended 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------- -------------------
Land 1,069 3,654 3,939
Sea 1,175 1,985 3,842
Air 1,233 1,320 2,164
--------------- -------------------
Total revenue 3,477 6,959 9,945
--------------- --------------- -------------------
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
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------- -------------
United Kingdom and
Europe 805 1,458 2,056
Africa 1,934 1,930 4,172
Middle East 51 582 508
Rest of the World 687 2,989 3,209
Total revenue 3,477 6,959 9,945
--------------------
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 31 December
30 June June 2020 2020
2021
(restated)
GBP'000 GBP'000 GBP'000
(Loss) / Profit from Operations (927) 476 (744)
Depreciation, amortisation and impairment
charges 117 108 225
----------- ------------
Reported EBITDA (810) 584 (519)
Share based expense - - -
Exceptional Items - - -
Adjusted EBTIDA (loss) / profit (810) 584 (519)
-------------------------------------------------
Adjusted EBITDA is an alternative reporting measure. For further
details refer to the 31 December 2020 accounts.
The 2020 half year results have been restated to remove
exceptional items not recognised in the 2020 audited results.
7. Income statement information
a. Significant Items
Profit for the half year to 30 June 2021 includes no items that
are unusual because of their nature, size or incidence: In 2020,
there was a Solutions delivery of one of the two advanced container
screening solutions to an Asian port with a sales value of
GBP1.2m.
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. Reviews were performed in 2019,
2020 and again this year, considering Covid-19, which has confirmed
those expectations. The recent award of the managed services
contracts has underpinned this.
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 2021 June 2020 2020
'000 '000 '000
Number of issued ordinary shares at the
start of period 286,528 145,403 145,403
Effect of shares issued during the period 841 6,186 17,245
----------- ----------- -------------
Weighted average basic and diluted number
of shares for period 287,369 151,589 162,648
=========== =========== =============
GBP'000 GBP'000 GBP'000
Loss and total comprehensive expense (929) 236 (730)
p p p
Earnings per share (0.32)p 0.16p (0.45)p
8. Cash flow adjustments and changes in working capital
Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
Total Total Total
GBP'000 GBP'000 GBP'000
Adjustment for non-cash items
Depreciation, amortisation and impairment
of non-financial assets 117 108 225
Finance costs 2 240 (17)
Revaluation of fixed assets - - (6)
(Profit) / loss on disposal of non-financial
assets 3 - 33
IFRS 16 interest adjustment (1) (4) -
Non-cash accounting for CLN - (199) (119)
(Increase)/decrease in deferred tax asset - - (49)
FX effect on goodwill 1 (2) -
Conversion of CLN - (100) (213)
Share-based payment expenses - - 87
Total adjustments 122 43 (59)
====================== ====================== =============
Net changes in working capital:
Decrease / (increase) in inventories 188 (397) (726)
Decrease in trade and other receivables 110 549 128
Increase in long term receivables - - (484)
(Decrease) / increase in contract liabilities (3) (15) 27
(Decrease) / increase in trade and other
payables (812) 150 (148)
Decrease in assets of disposal group classified
as held for sale - 170 170
Total changes in working capital (517) 457 (1,033)
====================== ====================== =============
9. Called up share capital
Ordinary Share Capital 6 months to 6 months to 30th Year to 31st
30th June 2021 June 2020 December 2020
Number GBP'000 Number GBP'000 Number GBP'000
------------------------------ ------------ -------- ------------ -------- ------------ ---------
At the beginning of
the period 286,527,511 287 145,402,511 14,540 145,402,511 14,540
Arising on exercise
of share options and
warrants - - 1,000,000 100 2,125,000 213
Issued under the RiverFort
EPSA - - 14,000,000 1,400 14,000,000 1,400
Share capital reorganisation
to create deferred shares - - - - - (15,991)
Other issue for cash 43,859,649 44 - - 125,000,000 125
At the end of the period 330,387,160 331 160,402,511 16,040 286,527,511 287
------------------------------ ------------ -------- ------------ -------- ------------ ---------
Deferred share capital 6 months to 30th 6 months to 30th Year to 31st December
June 2020 June 2019 2020
Number GBP'000 Number GBP'000 Number GBP'000
------------------------------ ------------ -------- -------- --------- -------------- --------
At 1 January 161,527,511 15,991 - - - -
Share capital reorganisation
to create deferred shares - - - - 161,527,511 15,991
At the end of the period 161,527,511 15,991 - - 161,527,511 15,991
------------------------------ ------------ -------- -------- --------- -------------- --------
Total Share Capital 6 months to 30th 6 months to 30th Year to 31st December
June 2021 June 2020 2020
Number GBP'000 Number GBP'000 Number GBP'000
Ordinary Share Capital 330,387,160 331 160,402,511 16,040 286,527,511 287
Deferred share capital 161,527,511 15,991 - - 161,527,511 15,991
491,914,671 16,322 160,402,511 16,040 448,055,022 16,278
======================== ============ ======== ============ ======== ============== ========
10. Borrowings
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Current
borrowings (due
< 1 year)
Mezzanine Loan - 1,500 -
Convertible - 1,593 -
loan note
Lease Debt 32 44 38
Total current
borrowings 32 3,137 38
Non-current
borrowings
(due > 1 year)
Convertible - - -
loan note
Convertible - 183 -
Unsecured loan
note
Lease Debt 16 48 29
Total
non-current
borrowings 16 231 29
Total
borrowings 48 3,368 67
================================ ================================ ================================
11. Contingencies
The RiverFort EPSA was described in the 2020 accounts. In
summary, the company issued 14m ordinary shares and received a
GBP1.5m mezzanine loan. At the same time under the EPSA the company
issued 14m shares and booked a sundry debt of GBP1.75m. The loan
was to be repaid and the sundry debt settled by selling down the
shares. The mezzanine loan was fully repaid in December 2020. As at
the 31 December 2020 there remained shares still to be sold by
RiverFort and a residual sundry debt for those shares. Because of
the low share price caused primarily by the market reaction to
Covid-19, had the remaining shares been sold at the 30 June 2021
there would have been a loss of GBP885,000 (31 Dec 2020:
GBP936,000) on this debt. However, the shares do not have to be
fully sold until at least 31 December 2021 and there is reason to
believe that it will be at a price higher than the 30 June 2021
price level and enough to recoup the losses.
12. Events after the Reporting Period
There were no material events which occurred after the period
end.
13. 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.
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END
IR BLGDISBBDGBD
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