Westminster Share Discussion Threads

[owenski] 19/4/2017 15:51

Keeping it simple, the dilution was pretty much to pay wages for a company that doesn't seem to get anywhere or achieve any value.

The money is spent shovelling food into fat directors gobs, it is gone not to be seen again.

The only good dilution is when a company buys an asset - another company as a strategic fit - and at non eye watering multiples, then hopefully one ends end with a smaller slice (dilution) of a much bigger pie.

WSG just seem to be on an endless wheeze to raise cash to keep this rubbish company on the road.

[pwhite73] 19/4/2017 14:14

GrahamYou raise an interesting point about the money not staying in the company but it is spent on intangible assets. The money spent securing the £500 million Middle East contract is an intangible asset. Nothing can be placed on the accounts until the contract is signed. However this is getting away from the point I am making. 113 million shares is nothing. I personally wouldn't even consider it a dilution irrespective of how many shares existed in 1066.

[pwhite73] 19/4/2017 12:48

No it is not both because the cash raised should lift the market cap and share price accordingly.

For example let's say instead of raising £1 million at 10p WSG raised £10 million at 5p. The market cap would rise to reflect the company had an extra £10 million in the coffers but the value of your stock would be half of what it is today.

Dilution is a bogus argument for thick heads who don't understand what's going on. It is the price of the new stock that kills you.

[pwhite73] 19/4/2017 11:51

I did not say it wasn't dilution. I said dilution is not the issue when it comes to equity placings The discount to the current price is what causes you to lose your money as it drags down the price you originally bought at.

[qs99] 19/4/2017 11:44

Maybe the fund raising was to help the contract so the customer had more confidence in the financial security of the company?????

[sapper2476] 19/4/2017 11:23

PWHite... Please post again about how this is discounted shares and not dilution... I need a chuckle.

[neo26] 19/4/2017 10:42

This is going below 10p, judging by them raising £1m they don't expect contract to be signed very soon...

[someuwin] 19/4/2017 08:54

Beaufort Securities

Wednesday 19th April 2017...

Westminster Group (WSG.L, 10.38p) – Speculative Buy

The AIM listed supplier of managed services and technology-based security solutions to governments and government agencies, non-governmental organisations (NGO's) and blue-chip commercial organisations worldwide, yesterday announced a placing of 10,000,000 new ordinary shares of 10p each to raise £1million before expenses. It also confirmed the conversion of the balance of the Convertible Loan Notes issued to Darwin Capital Limited, thereby eliminating the facility. Application will be made for the New Shares, which will rank pari passu with the Company's existing issued, to be admitted to trading on AIM, which is expected that will become effective for commencing on or around 2 May 2017. The new funding will support the development of the Company, with a particular focus on investment in its Managed Services division.

Our view: This new funding, together with the elimination of the Darwin facility, places the shares on a much firmer footing. Strategically, Westminster’s Aviation Security business identifies a highly compelling customer with powerful regulatory, political and economic drivers. It is an area at the forefront of many government’s security concerns, as was highlighted by UN Security Council Resolution 2909 which was passed in September 2016 following pressure from the British Government. With the Group’s strong governmental and industry connections and a proven business model, it is positioned to demonstrate strong cash and margin generation capability from long-term contracts, together with the potential to expand revenues by an order of magnitude. Indeed, its trading update from just two months back, confirmed the Board expects to report a much-improved financial performance for the year ending 31 December 2016, with revenue growth up 22% year-on-year and an expected break-even at the adjusted EBITDA level. The Managed Services division continues to make progress on a number of fronts. It's West African airport operations have experienced steady growth in embarking passenger numbers as the recovery from the Ebola crisis continues. In January 2017 (a seasonally strong month), for example, the airport operation recorded its second highest number of embarking passengers since commencing operations there in 2012, showing a 40% increase on the comparable period and following on from a 35% increase year on year in December 2016 (albeit December 2015 and January 2016 were still affected by the tail end of Ebola). The continuation of this growth pattern will potentially benefit both the Group's airport and ferry operations. Westminster's Cargo screening operations in Sierra Leone also commenced in West Africa during 2016, following the cargo operations and security screening service achieving the coveted RA3 status. The new cargo sheds currently have far greater capacity than current utilisation and the authorities are looking to build on this with create a regional hub for cargo services. In September 2016, management provided an update on its various airport opportunities under previously announced MoU's, all of which remain live and with certain opportunities having made good progress in recent weeks. Foremost amongst these is a major 15-year term, Middle Eastern airport contract opportunity which is expected to have annual revenues in excess of £35m. Elsewhere, Sovereign Ferries commenced operations utilising its Sierra Princess vessel in December 2016. Passenger numbers to date are in line with management expectations following a planned soft start in December designed to trial services and timetables. It is now operating 68 crossings a week to coincide with flight schedules and at full capacity is capable of carrying around 9,000 passengers a month. Marketing exercises have now begun including street video screen displays in country and plans are in place for ticketing sales through airlines, travel agents and hotels using its online booking system due to go live in the near future. This new service has been well received by passengers and the aim is to reach a minimum of 50% capacity during the second half of 2017, which should make a healthy contribution with continuing growth as the service expands. Having secured over £100,000 of annual recurring revenue maintenance contracts and further recurring contracts, the Technology division has also made a strong start to the year and continues to make a positive contribution to the Group with increasing margins. The long-term cash flow profile of these businesses, which require only limited additional capital support to fully secure their opportunity, make for a strong operational and financial business model, albeit with the risks incumbent with the geographical locations from which it operates. Beaufort commence coverage of Westminster Group with a Speculative Buy recommendation.

[pwhite73] 19/4/2017 08:30

Graham1TY - "If the company is worth £10m and there are 68m shares in issue, then each share is worth 14p. If there are 113m shares in issue, each share is now worth 8.8p."

You have just argued my very point. Why would the company still be worth £10m when there are 113m shares in issue. 113m X 14p should give a market cap of £15.82m.

The market cap remains the same because the extra 45m shares are being placed at prices lower than 14p. This drags the existing 14p shares lower. That is what kills you not the number of shares in issue. Indeed when new shares are issued there is more cash into the company's coffers so if anything the market cap should be rising not falling.

The dilution effect is irrelevent on AIM stocks as PIs are the majority holders. It is the price of the placing shares that destroys you.

[someuwin] 19/4/2017 08:05

Excellent time / level to buy in at - imo.

[youkme] 19/4/2017 07:40

jim- regardless, expect a good ish day as the old rampers wheel themselves out to off load their shares imo

[jimduggen] 19/4/2017 07:39

Depends on how many insiders want to participate at 10p before the booom

[youkme] 19/4/2017 07:32

On the other thread talking about shares in issue. Well of course it is all to do with the nominal value and how many shares are required to reach X for the fund raise. Far more important to see how often a company dilutes (staggering here for instance) rather than number of shares in issue lol

[owenski] 19/4/2017 06:59

And with more dilution to come, why stop at 113m shares.

[graham1ty] 19/4/2017 05:13

I just thought I would look further back. At the start of the decade, 1 Jan 2010, there were 14.9m shares in issue. So a holder then has almost been diluted eight times

[graham1ty] 19/4/2017 05:10

Pwhite "dilution is irrelevant".

If the company is worth £10m and there are 68m shares in issue, then each share is worth 14p. If there are 113m shares in issue, each share is now worth 8.8p.

In April 2013, before the first Darwin facility, there were 37m shares in issue. So, if the Company was worth £10m it was worth 27p per share.

What on earth do you mean dilution is irrelevant ?

[pwhite73] 18/4/2017 22:43

What is your question regarding WSG?

[abergele] 18/4/2017 22:42

Graham never answers my questions though if he's in the UK or the Far East..

[jimduggen] 18/4/2017 20:44

Lol, 5p a share even with 220 million shares in issue is good imo so stop knocking this.

113 million at 10p is great.

Rock on the contracts and 30p easy

[jimduggen] 18/4/2017 20:41

113 million shares is nothing. Most of these AIM companies are in the billions.

This is a great buy for newbies although sickening for old timers.