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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Westminster Group Plc | LSE:WSG | London | Ordinary Share | GB00B1XLC220 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.05 | -1.54% | 3.20 | 3.10 | 3.30 | 3.25 | 3.10 | 3.25 | 1,200,078 | 09:31:54 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Security Systems Service | 9.53M | 121k | 0.0004 | 80.00 | 10.58M |
From Apr 2019 to Apr 2024
TIDMWSG
RNS Number : 1311L
Westminster Group PLC
29 September 2016
29 September 2016
Westminster Group Plc:
Interim Results for the six months to 30 June 2016
Westminster Group Plc ('Westminster', the 'Company' or the 'Group'), 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, is pleased to announce its Interim Results for the six months ended 30 June 2016.
Key Points (Financial):
-- Positive Adjusted Operating EBITDA level of GBP0.18m (2015: GBP0.02m) and Operating Loss reduced by 82% to GBP0.18m (2015: GBP1.00m loss);
-- Average gross margin improved to 74% (2015: 51%) due to favourable business mix;
-- Airport business has produced a strong financial performance despite volumes still below pre Ebola levels;
-- Operating costs reduced by a further 16% with a total now 27% below those pre Ebola; -- Loss per share reduced to 1.21p (2015: 1.83p); -- GBP1.3m raised in June 2016 from the issue of equity to institutional investors; -- Cash balance as at 30 June 2016 GBP0.71m (2015: GBP0.41m); -- Shareholders' Equity GBP3.03m (2015: GBP1.87m); -- Darwin CLN debt reduced during period and eliminated shortly afterwards.
Key Points (Operational):
-- Increasing momentum in airport security business with three new Memoranda of Understandings (MoU's) signed with governments and airport authorities during the period making a total of seven signed MoU's in different regions of the world now in progress, all of which remain live opportunities;
-- Received Letter of Intent from Middle East Civil Aviation Authority for the provision of long term (15+ years) airport security services at a significant international airport with potential to expand the Group's airport security business annual revenues to over GBP35m with significant future growth potential - now at final negotiation stage;
-- Further long term multi-million GBP significant incremental business relating to the above Middle East airport project opportunity under negotiation;
-- Cargo screening service commenced in West Africa;
-- Technology Division signed MoU for large and long term Border Security project and delivered a wide range of sales and solutions around the world;
-- Establishing strategic Joint Venture with a European security group opening up new opportunities on selected projects around the world;
-- Sierra Princess completed it's sea trials in September 2016 and undertook maiden voyage, with ferry service set to commence in Q4;
-- Strategic Review progressing well and International Advisory Board now established. Further appointments to plc board expected to be announced in 2016.
-- Major upgrade of the Group's websites underway and largely completed resulting in improved profile and enquiries;
-- Westminster's ex-pat team in Sierra Leone awarded Ebola Medals for Service in West Africa during the crisis.
Commenting on the results and current trading Peter Fowler, Chief Executive of Westminster Group, said:
"Following two difficult and challenging years dealing with the effects of the Ebola Crisis, the oil price collapse and other issues I am pleased to report the first half of 2016 has shown a strong recovery both in terms of financial performance and in business development.
"Our financial performance during the period has shown a marked improvement achieving a positive adjusted EBITDA which is most encouraging given we have still not fully recovered to pre-Ebola passenger numbers in our West Africa airport operations, although there has been a steady improvement throughout the period.
"I am pleased to report that despite the challenges of the past two years, our business is facing unprecedented growth prospects, particularly with our airport security operations. Airport traffic in West Africa is returning following the end of the Ebola Crisis and whilst not yet back to pre-Ebola levels, is showing encouraging signs with the addition of cargo screening services having commenced. Significant progress is being made with the Middle East airport project negotiations and also with other projects under discussion. The Technology Division continues to improve, and a key opportunity is the large border project that was announced in February 2016. The long awaited Ferry Services are due to start in Q4 and this remains a value generating opportunity. All this, and the progress the business is making on numerous fronts, gives the Board and me confidence in our transformational growth prospects."
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
For further information please contact:
Hot Features
Premium
Westminster Group plc. Tel: 01295 756 300
Peter Fowler (Chief Executive)
Ian Selby (Chief Financial Officer)
S. P. Angel Corporate Finance LLP (NOMAD + Broker) Tel: 020 3470 0470
Stuart Gledhill/Lindsay Mair
Walbrook PR (Financial PR) Tel: 020 7933 8780
Tom Cooper/Paul Vann 0797 122 1972
tom.cooper@walbrookpr.com
Notes:
Westminster Group plc is a leader in the supply of system solutions and products to the security, defence, fire protection and safety markets worldwide.
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 ferry services, 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. For further information please visit www.wsg-corporate.com
Chief Executive Officer's Review
Overview
I am pleased to report a much improved financial performance compared to the previous year. The Group achieved positive adjusted EBITDA in the first six months of the year, after losing GBP0.9m on a similar basis in the comparative period. This was due to a strong performance by our airport security business that has now been profitable since the start of March 2015. This improving revenue combined with a lower cost base, a reduction in debt and new institutional investment has greatly strengthened the Group's financial position compared to that at the start of the year and has put us on a better platform to exploit the large opportunities now presented to the Group.
Managed Services Aviation
As previously reported, Managed Services is now the core focus of the Group, particularly our airport security business, and we have in recent years not only developed a robust business model which has demonstrably added to traveller security but developed a market presence which is gaining increasing traction with airport and state operators around the world.
Our decision to focus on and develop long term airport security programmes in recent years and to build the infrastructure and presence required, can now be seen to have been both strategic and potentially transformational for our business. Recent and tragic events around the world have clearly demonstrated the need for increased security around transportation and in particular aviation and airports. Underpinning this, a UK Government initiative at the U.N. Security Council has in recent days resulted in a unanimously approved resolution to address threats to civil aviation and airports calling for improved screening and security services which bodes well for Westminster and its current initiatives.
In this respect we have been extremely active pursuing the ever growing interest in our airport security programs and now have seven signed Memoranda of Understanding (MoU) in various geographical regions. Of these, one in East Africa was signed some time ago, three were signed in 2015 and so far in 2016 three more MoU's have been signed, including a substantial project opportunity within the Middle East. Collectively these MoU's serve over 10 million embarking passengers annually. All these opportunities remain active and in the Group's Annual Report issued at the end of June 2016 we provided an update on each of these. Since that time progress has been made on a number of fronts relating to these signed MoU's including the Middle East airport security project mentioned below and the Asia airport security project signed in February 2015 which is now at contract negotiation stage with high level follow up meetings organised for early October 2016. Other projects are in varying stages of progress and we will continue to provide updates on material developments.
In May 2016 we announced we had received a formal Letter of Intent from a Civil Aviation Authority relating to one of the MoU's previously announced for a long term airport security services project opportunity within the Middle East. At the end of July we announced that contract discussions were largely completed and that we were also looking at a substantial incremental requirement extending the scope of works. Since then we have been negotiating with the Government concerned regarding the incremental scope of works which has now expanded to such an extent, both in terms of scope and value, that it has been decided that these will be dealt with under a separate contract agreement.
Accordingly, arrangements are currently being made for high level meetings to hopefully finalise the security services contract and the Company is working with UK Governmental bodies and other institutions to deal with related financing issues whilst Westminster's business development team continues to progress negotiations of the long term multi-million pound incremental requirement for related services at all international airports within the country.
This single opportunity alone has the potential to transform the Group's airport security business annual revenues to over GBP35m with significant future growth potential both from this and the other opportunities the Group is pursuing. On this particular opportunity we are working closely with the British Government and are receiving support from some of the highest levels in government who regard it as a major UK opportunity in the light of Brexit. On a wider front, we continue to receive excellent British Government support for many other opportunities through DIT and numerous British Embassies and High Commissions around the world. This includes organising and attending meetings in the UK and overseas as well as lobbying on our behalf.
Whilst projects of this size and complexity are a challenge to bring to completion each one can be transformational and several will provide the Group with excellent growth prospects. As ever there can be no certainty as to timing or eventual outcome, but our increasing reputation and macroeconomic drivers provide considerable cause for optimism.
Managed Services: Ferry Operation
Westminster's ferry business, Sovereign Ferries, has been a lengthy and challenging project to bring to fruition not least due to damage suffered by the flagship vessel, the Sierra Queen, prior to operations. However, work on this long awaited and much needed service is now close to being completed and ferry services are expected to commence in Q4 providing a fast, professional and safe transport link across the estuary between Freetown International Airport and the capital.
In July 2016 we took delivery of a second vessel, the Sierra Princess. The Sierra Princess is a fast ferry capable of transporting up to 70 passengers in safety and air-conditioned comfort at over 20 knots from twin 400hp inboard engines. She is equipped with the latest navigational and safety equipment.
The Sierra Princess undertook her inaugural voyage at an event held on 9 September 2016 at the Company's Kissy Terminal in Sierra Leone attended by the Sierra Leone Minister of Transport & Aviation, various other senior government figures, the Chairman, Director General and other dignitaries from the Sierra Leone Ports Authority, the Maritime Police and other institutions. The event was a great success with press and local TV crews in attendance.
The Sierra Princess will be joining Sovereign's flag ship vessel, the Sierra Queen, in providing a fast, safe and efficient ferry service between the Tagrin, Kissy and Government Wharf terminals either side of the Sierra Leone River estuary. The service will not only provide a much needed professional airport transfer service between the airport and the capital, Freetown, with crossing times of just 20 minutes but will also provide an efficient ferry service around the capital and further afield.
The Company has engaged an experienced marine and risk management specialist, a highly experienced mariner with experience of the region, who is now in-country assisting with the operations and deployment of the vessels and who will now be providing the management of the ferry service going forward. He has already made significant progress in advancing both the infrastructure and seaborne operations.
Clearly the delays in service commencement and the additional costs arising from the delays have been both a frustration and cost to the Group. However, this short term issue does not detract from the expected economic demand over the 21 year term of the deal and we remain optimistic about the long-term value of the service.
Technology Division
As outlined in the AGM Statement in June, and despite project delays previously identified and which continue, the Technology Division has made a positive contribution during the first half of 2016 with higher margins and a lower cost base.
In the Company's Annual Report issued at the end of June 2016 we provided an update on projects delayed as a result of the world-wide slump in oil prices amongst other factors, including the US Bridge and Americas consulting projects. Whilst some small amounts have been received on these projects these situations remain broadly the same and these remain outside of the Company's internal forecasts. We remain in dialogue with the relevant counterparties and will update when further significant progress is made.
The Company has secured orders and delivered a wide range of products and services around the world and has also made good progress with the potential 20 year Middle East border security project announced in February 2016 for the provision of equipment, training and ongoing maintenance of security screening checkpoints. The Company successfully carried out trials and demonstrations in relation to this project in May 2016 and due to the substantial potential value of this contract and its own specific complexities, is now discussing funding and deployment options with the authorities and banks with UKEF support.
The worldwide reach of the Division is emphasised by a number of recent contracts. By way of example, during the first six months of 2016, the Technology Division has supplied various products and services to UK prisons; security equipment to various airports in the UK and overseas; explosive detection equipment to a UN entity in Somalia; supplied screening equipment to the South African Police; as well as securing contracts with numerous other clients as far afield as the Afghanistan, Canada, China Germany, Greece, Indonesia, Kenya, Malaysia, Nigeria, Qatar, Romania, Singapore, Tanzania, Turkey, the UAE and the USA.
The Division has a number of other advanced solution sales prospects underway although as ever timing when dealing with governments can be difficult to determine with accuracy. Nevertheless, they are real opportunities that can provide substantial cash flows when they are won.
2016 has seen a complete overhaul and upgrade of all our Group websites and as part of that process a new and comprehensive Westminster International website has been developed. This was launched in June following a nine month build programme and is optimised for mobile usage. Improved SEO functionality has led to improved traffic and enquiries since commissioning.
The business continues to provide essential technical resources to the Managed Services Division, again highlighting the vertical integration that exists in our business.
Strategic Review
In our Annual Report we announced we are undertaking a Strategic Review of the business to ensure the Group is well positioned to maximise the substantial opportunities we are developing and to successfully take the business to the next level. As part of that review we are taking a critical look at our business including our Board and management structures, our operations, our financing and our advisory structure.
At Board level we have already made a number of changes to streamline the operation whilst broadening the level of experience and expertise to assist our expansion. We have split responsibilities between the PLC Board responsible for overall performance and strategy of the Group and the Operational Board responsible for day to day management of the Group's business. We have also formally established an International Advisory Board to assist and advise the Group and its subsidiaries on various international issues including governmental and client liaison, cultural, ethnic and religious sensitivities, compliance with legal issues, financing and general business development.
At the Company's AGM in June Sir Michael Pakenham retired from the Board (but remains on the advisory board) and we would again like to thank him for his support over the past years. Roger Worrall, the Group's Commercial Director stood down from the main board to concentrate on his duties as a member of the operational board. Immediately following the AGM, Sir Tony Baldry joined the Plc Board as Deputy Chairman. Sir Tony, a practising barrister, was a Member of Parliament for 32 years stepping down in 2015. He held various ministerial posts during that time including Minister of State in the Ministry of Agriculture, Fisheries and Food. Sir Tony also served as Parliamentary Under Secretary of State for the Department of the Environment, Department of Energy and the Foreign and Commonwealth Office with various responsibilities including South Asia, Africa, North America and the West Indies.
The Board is in discussion with several high calibre non-executive candidates including an Audit Committee chair and will announce appointments as appropriate.
Financial Review
At the AGM on 30 June 2016, the Group referenced being close to EBITDA positive break even in the first half of the year. When adjusted for the impact of Ebola the Group recorded positive EBITDA of GBP0.18m (2015: GBP0.02m) with an unadjusted operating loss of GBP0.18m (2015: GBP1.01m).
Revenues and Gross Margin
Revenues grew by 5% to GBP2.03m (2015: GBP1.93m). This was due to the strong recovery in managed services revenues following the recovery from the worst ravages of the Ebola crisis that were felt in 2014/2015. Technology division revenues (with an inherently lower gross margin) were lower than 2015 primarily due to certain large items in the comparative period. This change in mix increased overall gross margins to 73% (2015: 51%).
Operating Costs
Overall Group administrative costs fell by a further 16% compared to 2015. When adjusted for depreciation and non-cash items such as share option expenses the average monthly operating cost was approximately GBP0.27m. This marks a total reduction of 27% compared to the period before Ebola in 2014.
Operating Result
Our headline operating loss fell by 82% to GBP0.18m (2015: GBP1.01m). When adjusted for depreciation and the ongoing impact of Ebola on the still reduced passenger numbers the Group recorded a pro-forma positive Operating EBITDA of GBP0.18m (2015: GBP0.02m).
Financing Charges
Our underlying cash interest cost was GBP0.11m (2015: GBP0.04m) reflecting the increased level of convertible debt during the period which bore a coupon of 10% per annum. A further GBP0.54m (2015: GBP0.01m) of non-cash financing charges arose from the amortisation and revaluation of convertible loan notes as well as the costs (GBP0.14m) associated with share issues, and from IFRS related adjustments around amortisation of convertible debt. Overall financing charges were GBP0.65m (GBP0.01m)
Cash Flow Statement
The Group's operating cash outflow was reduced by 95% to GBP0.06m (2015: GBP1.13m) and cash conversion remained strong reflecting the high cash generation characteristics of the business model. This reduction was achieved by a combination of improving revenues, gross margin performance and a lower operating cost base and strong cash collections. A further GBP0.57m was invested in the setup of the Sierra Leone ferry project. Working capital outflow was reduced by approximately 90% to GBP0.03m (2015: GBP0.29m). A further GBP0.31m arising from the settlement of the share issue which was approved at the AGM on 30 June 16 was received on 1 July 2016.
The Group issued a further GBP0.475m of Zero Coupon Loan Notes to Darwin Strategic raising proceeds of GBP0.38m net, which were fully converted into equity during the period. On 3 June 2016 the Group placed 13m shares at 10p per share with institutional investors raising GBP1.3m gross.
Overall cash balances increased from GBP0.15m to GBP0.71m during the period.
Balance Sheet
The Group invested a further GBP0.57m on plant and machinery during the period, with the bulk of it attributable to investment in the setup costs of the Sovereign Ferries project in West Africa. Debtors were GBP1.04m including the GBP0.31m share issue proceeds referred to above. Overall debtors were broadly in line with credit terms with some slightly overdue items being paid in July. In line with the treatment adopted at the end of December 2015, an adjustment was made to offset amounts due from certain delayed contracts against deferred incomes with there being no impact on net assets.
The Group had two convertible loan notes outstanding at the end of the period:
-- Convertible Secured Loan Note. This instrument has a coupon of 10% payable quarterly in arrears, has a conversion price of 35p and is repayable in June 2018. At the balance sheet date it had principal of GBP2.245m (2015: GBP1.245m) outstanding, and as required under IFRS it is carried at an amortised cost balance of GBP2.01m (2015: GBP1.06m)
-- Zero Coupon Convertible Unsecured Loan Notes ("CULN"). This represents the remaining amount due to Darwin Capital Limited. This was carried at nominal value of GBP0.472m and was fully converted into equity in July 2016.
During the period 13m new ordinary shares were issued to institutional investors raising GBP1.3m gross. Associated with this issue Hargreave Hale received 5 million detachable warrants over 10p ordinary shares. These warrants have a life of 3 years from date of grant and have an exercise price of 12p each. A further 6,659,567 ordinary 10p shares were issued on the conversion of GBP775,000 of CULN.
At the balance sheet date shareholders' funds stood at GBP3.03m (2015: GBP1.87m).
Outlook
In terms of operations, our Managed Services Division continues to show strong growth and, in 2016 so far, has signed three more Memoranda of Understanding, bringing the total number of signed airport security MoU's the Company is working on to seven which collectively serve over 10 million embarking passengers annually. We continue to expand our opportunities in this respect with further airports and authorities around the world expressing interest in Westminster's solutions. Negations are well advanced with the Middle East long term airport security services project opportunity and this is helping to drive incremental and large opportunities. We have the support of the UK Government and are working with them and other institutions on related financing issues.
In June we announced we were in dialogue with potential joint venture (JV) partners for certain large scale projects whereby the JV partner can bring added value through financing support and regional presence in new strategic locations as well as bringing to Westminster added language and cultural enhancements. I am pleased to report that we have now agreed overall terms with a European security group and we are in the process of setting up a Joint Venture company in Europe, opening up new project opportunities in different parts the world.
I am pleased to be able to report that our long awaited ferry services are expected to commence operations in Q4 providing a fast, professional and safe transport link across the estuary between Freetown International Airport and the capital. Despite setbacks, not least the damage to our flag ship the Sierra Queen we reported on in April this year (now rectified), we have made significant progress in developing the infrastructure and terminals in preparation for the service. Our vessels are now being prepared for operations and our latest addition, the Sierra Princess, undertook her maiden voyage in September 2016.
Our Technology Division continues its recovery and has delivered a wide range of sales and solutions around the world and, in addition, is progressing a number of sizeable project opportunities including the border security project for which it signed a MoU in February 2016 which has now significantly expanded in scope.
We continue to receive excellent British Government support through DIT and numerous British Embassies and High Commissions around the world and this includes organising and attending meetings in the UK and overseas as well as lobbying on our behalf. Following a UK Government initiative, the U.N. Security Council has in recent days unanimously approved its first ever resolution to address threats to civil aviation and airports calling for improved screening and security services and this bodes well for Westminster.
As indicated above, despite the challenges of the past two years, Westminster is facing excellent growth prospects, particularly with our airport security operations. Airport traffic in West Africa is returning following the end of the Ebola Crisis and whilst not yet back to pre-Ebola levels is showing encouraging signs with the addition of cargo screening services having commenced. Significant progress is being made with the Middle East airport project negotiations and also with other projects under discussion. The Technology Division continues to improve, and a key opportunity is the large border project that was announced in February 2016. The long awaited Ferry Services are due to start in Q4 and this remains a value generating opportunity.
I am pleased to report therefore that, despite the challenges of the past two years, our business is facing unprecedented growth prospects, particularly with our airport security operations. Added impetus has come in September 2016 from the United Nations Security Council following a British Government initiative. With this, and the progress the business is making on numerous fronts, it gives the Board and me confidence in our transformational growth prospects.
Peter Fowler
Chief Executive Officer
Condensed consolidated statement of comprehensive income for the six months ended 30 June 2016
6 months 6 months Year
to 30 to 30 to 31
June June Dec
2016 2015 2015
Note Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------------- ----- ---------- ---------- --------
Revenues 2,033 1,933 3,359
Cost of sales (539) (952) (1,403)
GROSS PROFIT 1,494 981 1,956
--------------------------------------- ----- ---------- ---------- --------
Administrative expenses (1,675) (1,988) (3,606)
LOSS FROM OPERATIONS (181) (1,007) (1,650)
--------------------------------------- ----- ---------- ---------- --------
Analysis of Operating Result
Depreciation & Amortisation (113) (78) (171)
Highlighted Costs including Impact
of Ebola (252) (946) (1,043)
--------------------------------------- ----- ---------- ---------- --------
Proforma Operating EBITDA (Loss) from
ongoing operations 184 17 (436)
--------------------------------------- ----- ---------- ---------- --------
Financing gains / (charges) 6 (649) (8) (338)
LOSS BEFORE TAXATION (830) (1,015) (1,988)
--------------------------------------- ----- ---------- ---------- --------
Taxation - - (7)
LOSS AND TOTAL COMPRENSIVE INCOME
ATTRIBUATBLE TO EQUITY SHAREHOLDERS (830) (1,015) (1,995) --------------------------------------- ----- ---------- ---------- -------- LOSS PER SHARE (pence) 5 (1.21) (1.83) (3.49) --------------------------------------- ----- ---------- ---------- --------
Condensed consolidated statement of financial position at 30 June 2016
6 months 6 months Year
to 30 June to 30 June to 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
------------------------------- ------ ----------- ----------- ----------
Goodwill 397 397 397
Assets in the Course of
Construction 0 282
Other intangible assets 32 9 34
Property, plant and equipment 4,799 3,137 4,343
TOTAL NON-CURRENT ASSETS 5,228 3,825 4,774
--------------------------------------- ----------- ----------- ----------
Inventories 123 96 57
Trade and other receivables 1,040 2,857 484
Cash and cash equivalents 709 414 150
--------------------------------------- ----------- ----------- ----------
TOTAL CURRENT ASSETS 1,872 3,366 691
--------------------------------------- ----------- ----------- ----------
TOTAL ASSETS 7,100 7,191 5,465
--------------------------------------- ----------- ----------- ----------
Share capital 8,311 5,650 6,345
Share premium 9,243 9,153 9,170
Merger relief reserve 299 299 299
Share based payment reserve 427 220 258
Equity Reserve on CLN 186 181 219
Revaluation reserve 134 134 134
Retained earnings (15,568) (13,772) (14,739)
--------------------------------------- ----------- ----------- ----------
TOTAL SHAREHOLDERS' EQUITY 3,032 1,865 1,686
--------------------------------------- ----------- ----------- ----------
Embedded Derivative
Borrowings 2,594 2,128 2,587
Deferred tax liabilities 53 53 53
--------------------------------------- ----------- ----------- ----------
TOTAL NON-CURRENT LIABILITIES 2,648 2,181 2,640
--------------------------------------- ----------- ----------- ----------
Deferred Income 9 2,037 -
Trade and other payables 1,411 1,108 1,139
--------------------------------------- ----------- ----------- ----------
TOTAL CURRENT LIABILITIES 1,420 3,145 1,139
--------------------------------------- ----------- ----------- ----------
TOTAL LIABILITIES 4,067 5,326 3,779
--------------------------------------- ----------- ----------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 7,100 7,191 5,465
--------------------------------------- ----------- ----------- ----------
Condensed consolidated statement of cash flows for the six months ended 30 June 2016
6 months 6 months Year
to 30 June to 30 June to 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
----------------------------------------------------- ----- ----------- ----------- ----------
LOSS BEFORE TAXATION (830) (1,015) (1,988)
Adjustments 7 798 166 589
Net changes in working capital 7 (30) (285) 209
Equity settlement payment - - 60
----------------------------------------------------- ----- ----------- ----------- ----------
NET CASH USED IN OPERATING ACTIVITIES (62) (1,134) (1,130)
----------------------------------------------------- ----- ----------- ----------- ----------
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (567) (1,316) (2,642)
Purchase of intangible assets - (282) (27)
Net Proceeds from disposal of fixed assets - - 25
NET CASH USED IN INVESTING ACTIVITIES (567) (1,598) (2,644)
----------------------------------------------------- ----- ----------- ----------- ----------
FINANCING ACTIVITIES:
Gross proceeds from the issue of Ordinary Shares 1,301 - -
Settlement of AGM equity issue received 1 July 2016 (311) - -
Costs of the share issue (40) - -
Gross proceeds from the issue of Loan Notes 475 2,155 3,155
Borrowing Repayments (33) - -
Cost of loan note issue (92) (158) (280)
Interest Paid (111) (31) (131)
NET CASH FROM FINANCING ACTIVITIES 1,189 1,966 2,744
----------------------------------------------------- ----- ----------- ----------- ----------
Net change in cash and cash equivalents 559 (766) (1,030)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 150 1,180 1,180
CASH AND EQUIVALENTS AT OF PERIOD 709 414 150
----------------------------------------------------- ----- ----------- ----------- ----------
Condensed consolidated statement of changes in equity for the six months ended 30 June 2016
Share
Merger based Equity
Share Share relief payment Reserve Revaluation Retained
capital premium reserve reserve on CLN reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
AS OF 1 JANUARY
2016 6,345 9,170 299 258 219 134 (14,739) 1,686
Issue of new shares 1,966 109 - - - - - 2,075
Costs of new share
issue - (36) - - - - - (36)
Arising in the
Period - - - 170 (33) - - 137
Share based payments - - - - - - - 0
TRANSACTIONS WITH
OWNERS 1,966 73 - 170 (33) - - 2,176
---------------------- --------- --------- --------- --------- --------- ------------ ---------- --------
Loss for the period (830) (830)
AS AT 30 JUNE 2016 8,311 9,243 299 428 186 134 (15,569) 3,032
---------------------- --------- --------- --------- --------- --------- ------------ ---------- --------
AS OF 1 JANUARY
2015 5,515 9,039 299 141 47 134 (12,757) 2,418
Issue of new shares 135 114 - - - - - 249
Arising in the
Period - - - 79 134 - - 213
TRANSACTIONS WITH
OWNERS 135 114 - 79 134 - - 462
---------------------- --------- --------- --------- --------- --------- ------------ ---------- --------
Loss for the period - - - - - - (1,015) (1,015)
AS AT 30 JUNE 2015 5,650 9,153 299 220 181 134 (13,772) 1,865
---------------------- --------- --------- --------- --------- --------- ------------ ---------- --------
AS OF 1 JANUARY
2015 5,515 9,039 299 141 47 134 (12,757) 2,159
Issue of shares
for cash 40 20 - - - - - 60 Share based payment charge - - - 76 - - - 76 Exercise of share options 1 - - (1) - - - - Lapse of share options - - - (13) - - (13) - Warrants issued with loan notes - - - 55 - - - 55 Bonus Issue 114 (114) - - - - - - CLN conversion 675 225 - - (39) - - 861 Loan notes issued - - - - 211- - - 211 TRANSACTIONS WITH OWNERS 830 131 - 117 172 - 13 1263 ---------------------- --------- --------- --------- --------- --------- ------------ ---------- -------- Total Comprehensive Income for the Year (1,995) (1,995) AS AT 31 DECEMBER 2014 6,345 9,170 299 258 219 134 (14,739) 1,686 ---------------------- --------- --------- --------- --------- --------- ------------ ---------- --------
Notes to the condensed consolidated financial statements for the six month period ended 30 June 2016
1. General information and nature of operations
Westminster Group Plc (the "Company") and its subsidiaries (together the "Group") design, supply and provide on-going support for advanced technology security, safety, fire and defence solutions to a variety of government and related agencies, non-governmental organisations and mainly blue chip commercial organisations. The Group currently operates through a network of agents located in 48 countries. Agents typically generate sales leads and work with the Group in preparing tender documentation. The majority of the agents are based in the Middle East, the Far East and Africa. The Company was incorporated on 7 April 2000 and is domiciled and incorporated in the United Kingdom and is listed on the AIM Market of the London Stock Exchange.
2. Basis of preparation
These unaudited condensed consolidated interim financial statements are for the six months ended 30 June 2013. The Group has not adopted the reporting requirements of International Accounting Standard (IAS) 34 'Interim Financial Reporting'. They have been prepared following the recognition and measurement of principles of IFRS as adopted by the European Union. The statements do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2015.
The condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements, which were for the year ended 31 December 2015.
This condensed consolidated interim financial statement for the six months ended 30 June 2016 has neither been audited nor reviewed by the Group's auditors. The financial information for the year ended 31 December 2015 set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2015 have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006.
3. Going concern
These interim financial statements are prepared on a going concern basis. In assessing whether the going concern assumption is appropriate, management have taken into account all relevant available information about the future. As part of its assessment, management have taken into account the profit and cash forecasts, the continued support of the shareholders and bondholders and Directors and management ability to affect costs and revenues. Management regularly forecast results, financial position and cash flows for the Group. Whilst the Group's financial performance improved significantly in the first half of 2016 the Group maintains contingency plans in the event that business performance targets and associated cash flows are not achieved. A worst case forecast for the twelve months to 30 September 2017 has been prepared which includes revenues from the run rate of smaller contracts, continuation of major existing contracts such as the West African airport contract and from the Sovereign Ferries operation, where a sensitivity of a go live date in the fourth quarter of 2016 has now been reflected. Should the associated margin and cash targets not be met, the Group's options could include cost reductions and realisations of non-core assets which could reduce net debt as well as potential further issues of either equity or debt to existing or new shareholders or loan note holders. Incremental wins of large contracts including Managed Services have been excluded from this analysis as have any needs for incremental financing around setup costs on such contracts, although financing arrangements are expected to available through joint venture and other partners for certain setup costs of the advanced Middle East airport security prospect. The directors believe that based on the strong financial dynamics of incremental Managed Services contracts that they should be able to secure financing and are in discussions with various potential debt and equity providers. Based upon these projections the Group has adequate working capital for the 12 months following the date of signing these interim financial statements. For this reason they continue to adopt the going concern basis in preparing these interim financial statements.
Basis of consolidation
The Group financial statements consolidate those of the Group and its subsidiary undertakings drawn up to 30 June 2016. Subsidiaries are entities over which the Group has the power to control the financial and operating policies so as to obtain benefits from their activities. The Group obtains and exercises control through voting rights. Consolidation is conducted by eliminating the investment in the subsidiary together with the parent's share of the net equity of the subsidiary.
4. Functional and presentational currency
The financial information has been presented in pounds sterling, which is the Group's presentational currency. All financial information presented has been rounded to the nearest thousand.
5. Loss 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 year. 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 year 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:
6 months 6 months Year
to 30
to 30 June June to 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
000 000 000
----------- ---------- ----------
Issued ordinary shares
Start of period 63,455 55,165 55,145
Effect of shares issued during
the period 4,946 164 2,029
Weighted and diluted average
basic number of shares for
period 68,401 55,329 57,174
=========== ========== ==========
6. Financing Costs
Six months Six Months Year
to 30 to 30 ended
June June 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ----------- ----------
Bank Borrowings 1 (0) (1)
Interest Payable on Convertible Loan Notes (112) (41) (121)
Underlying Finance Costs (111) (41) (122)
Revaluation of embedded derivative - 48 -
Adjustment in relation to Amortised Finance
Cost on Convertible Loan Notes (538) (56) (216)
Impact of IFRS on Financing Costs (538) (8) (216)
Net Finance Costs (649) (8) (338)
----------- ----------- ----------
7. Cash flow adjustments and changes in working capital
The following non-cash flow adjustments and adjustments for changes in working capital have been made to loss before tax to arrive at operating cash flow:
6 months 6 months Year
to 30 to 31
to 30 June June Dec
2016 2015 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ---------- --------
Adjustments:
Depreciation, amortisation and impairment
of non-financial assets 113 78 171
Finance Charge / (Gain) 649 8 338
(Profit) / loss on disposal of non financial
assets - - 4
Share-based payment expenses 36 79 76
Total adjustments 798 165 589
----------- ---------- --------
Net changes in working capital:
Decrease/(increase)in inventories (66) (24) 15
Decrease /(Increase) in trade and other receivables (245) (813) 1,625
(Decrease)/increase in trade and other payables 281 551 (1,431)
Total changes in working capital (30) (285) 209
----------- ---------- --------
8. Cash flow adjustments and changes in working capital
In July 2016 the remaining GBP472,500 of loan notes due to Darwin were converted into 3,993,798new ordinary 10p shares
9. Approval of interim financial statements
The interim financial statements were approved by the Board of Directors on 28 September 2016.
10. Copies of Interim Financial Statements
A copy of the interim financial statement is available on the Company's website, www.wsg-corporate.com and from the Company's registered office, Westminster House, Blacklocks Hill, Banbury, Oxfordshire, OX17 2BS.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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