TIDMWSG
RNS Number : 8116E
Westminster Group PLC
01 November 2022
01 November 2022
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,
provides a trading update for the year ending 31 December 2022 and
an update on business prospects.
2022 Trading Update
In our interim results announcement in August 2022, we stated we
expected the current year to be H2 weighted, which remains the
case, and that we remained optimistic we could meet 2022 market
expectations, whilst being mindful that the global situation and
growing economic crisis around the world may yet impact
forecasts.
The Board's current expectation is that 2022 revenue outturn
will be approximately a third below market expectations, which is
expected to deliver a loss before tax equivalent to approximately
half of that reported in 2021. This is predominantly because of the
slippage of the multimillion pound Technology project mentioned
below.
We have made important progress this year. Highlights in the
period include:
-- Our West African Airport operations have not only recovered
to pre-pandemic levels, but 2022 looks set to be the highest
revenue levels ever achieved since we started operation in 2012.
This is most encouraging and bodes well for the future,
particularly with a new terminal due to open in the next 12
months.
-- Active preparation for the opportunities we believe will
arise in UK from the forthcoming Protect Duty legislation, as we
outlined in our Interim Report in August. This has already led to
two important new contract wins, one for an iconic UK building and
another for a theatre and exhibition complex in Northern England.
We are already in discussions with and developing similar
opportunities around the country.
-- Delivered outstanding security services at Her Majesty the
Queen's funeral having been contracted to be on standby and having
rehearsed to provide specific equipment and services during recent
years.
We have previously advised that we anticipated the ratification
process for the contract covering 5 airports in the DRC, originally
announced in June 2021, would be concluded in Q4 2022 allowing for
the project to commence at last. Whilst this has been a slow
process, the Board believes this timing remains the case and recent
events and activity add to our confidence that progress is being
made. Should ratification occur pre the 2022 year end, we expect
revenue will start to be recognised in early 2023.
In our interim results announcement, we also stated we expected
to secure at least one more long-term, large-scale managed services
contract this year and we continue to believe that to be the case.
Whilst there is never certainty of timing or outcome of
negotiations for such projects, which are complex and can involve
various bodies, we have reached an advanced stage of negotiation
with at least one such project. However, if signed, there would be
little, if any, revenue recognised in the current year.
Further, a key part of achieving 2022 market expectations was
the timely award of a multi-million-pound Technology project for
the MENA region, which, whilst we still expect to be awarded the
contract this year, we are now running short on time to deliver and
recognise revenues in 2022, and accordingly, depending on when the
order arrives, some of this revenue is now likely to slip into
2023.
Future Prospects and Financial Position
Despite global economic and political pressures, we continue to
have healthy levels of enquiries, a large bank of opportunities and
over the course of the year have provided goods and services to
numerous countries around the world.
Westminster Arabia has recently been certified by the Saudi
Arabian High Commission for Industrial Security (HCIS) - this is
something we have been pursuing for some time and an important
achievement being a requirement for government regulated and/or
funded projects (such as Giga Projects, critical infrastructure,
transport etc.) and to supply products & services to government
affiliated companies.
There has been no change with our other West Africa port
project. We continue to wait for our client to finalise the land
allocation issues with the government but remain ready to start
once access is granted.
Our guarding business continues to perform to expectations and
has been winning new business whilst our training business is
performing ahead of expectations. However, given the global
situation, whilst we expect to maintain current activity levels in
these areas, but we are not expecting significant growth in
2023.
It is likely that the economic crisis in the UK and around the
world will impact business sentiment and spending. We are mindful
that this may affect decisions on some of the larger Technology
project opportunities which underpins the importance of building
our recurring revenue streams, in particular our pursuit of
long-term, large-scale managed services projects.
Regarding our Ghana port operations, whilst we remain on site
and continue to operate as normal, the relationship with our local
partners, Scanport, has become increasingly strained in recent
months. We are looking at potential mediation to resolve matters,
but we may look to terminate the arrangement early, in 2023, rather
than 2024 and receive accelerated receipt in recompense
accordingly. This would allow us to free up resources for the new
and larger managed services projects we expect to have in place by
2023 which will mitigate any impact on our 2023 expectations.
In response to cost inflation, we are taking measures to reduce
our energy consumption and have also commenced a cost cutting
programme across the business. Currency volatility is also
something we are monitoring carefully and where possible provide
natural hedging by selling goods in the same currency we are
purchasing them, but this is not always possible and so we are
looking at hedging where appropriate. One positive for our business
at present is that the majority of our international revenues, such
as our West African airport, are in USD and so showing healthy
gains.
The Company's executive continues to carefully monitor the cash
needs of the business on a regular basis and are of the opinion
that, with the abovementioned cost saving measures and prudent cash
management in the near term, and assuming no further new
large-scale projects are signed, there are sufficient cash
resources available to the group to undertake current operations at
least the end of 2023. In anticipation of new large-scale projects
that would require financing, we have held discussions with a
number of funding sources and have various non-dilutive options we
can pursue including potential support from UK Export Finance.
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
Richard Johnson
Arden Partners plc (Broker)
Ruari McGirr (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, 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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END
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