Westminster Group PLC Trading Update (7154X)

TIDMWSG

RNS Number : 7154X

Westminster Group PLC

23 February 2017

Westminster Group Plc:

Trading Update

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 provide a trading update on its business activities.

As referenced in the Company's trading statement of 21 December 2016, the Group is expecting to report a much improved financial performance for the year ending 31 December 2016 with revenue growth up 22% year on year and expected break even at the adjusted EBITDA level.

Managed Services Division

The Group's Managed Services division continues to make progress on a number of fronts. The Company's West African airport operations are seeing steady growth in embarking passenger numbers as the recovery from the Ebola crisis continues. In January 2017 (a seasonally strong month), the airport operation recorded its second highest number of embarking passengers since the Company commenced operations there in 2012, showing a 40% increase on January 2016 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). If this growth pattern continues it will potentially benefit both the Company's airport and ferry operations.

Westminster's Cargo screening operations in Sierra Leone 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 and create a regional hub for cargo services.

Westminster's reputation and expertise in the field of aviation security continues to grow, evidenced by both the number of new training and support contracts secured for airports around the world and our growing pipeline of long term potential airport projects, which includes some very large opportunities. In September 2016, the Company 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.

A key focus of the business in recent months has been developing its several large scale long term potential project opportunities within the Middle East, including its previously announced major airport project for which the Company received a letter of intent during May 2016 and which is expected to have annual revenues in excess of GBP35m, together with an ancillary large scale project for the same client as well as a significant border project in the same region. Contracts of this size and nature are not only time-consuming but involve complex negotiations with numerous commercial and political bodies. With the major airport contract discussions largely completed, the Company has been actively preparing the required support structures and infrastructure necessary to deliver the projects, including organising a complex supply chain. Whilst there is never certainty in relation to either the outcome or timing of such negotiations the considerable progress made to date and the ongoing support received from UK governmental departments is extremely encouraging.

As part of its growth strategy, and to facilitate some of its major project opportunities, Westminster has also now established two new European subsidiaries strategically located in Germany; Westminster Group GmbH, a 100% subsidiary of Westminster Group Plc, and Westminster Sicherheit GmbH, which has a 15% minority holding by strategic investors who will help provide financial and structural support for some of the major project opportunities.

Ferry Operations

As previously reported, 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. The service 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. With total airport passenger numbers passing through the airport increasing, and currently averaging around 15,000 per month, there is a strong and captive market for a safe, reliable and professionally run ferry operation. Sovereign's professional service with well-trained uniformed staff, air conditioned transit coaches, well equipped terminals and fast, safe craft is well placed to deliver a much needed service. Marketing has now begun including street video screen displays in country and plans are in place for ticketing sales through airlines, travel agents and hotels using our online booking system due to go live in the near future. This new service has been well received by passengers and the Company's aim is to reach a minimum of 50% capacity during the second half of the year which will make a healthy contribution to the Group, with continuing growth as the service expands.

The current service is focussed on the Sierra Princess which is operationally proving successful and which will be joined by other vessels as demand and operations dictate. The larger Sierra Queen will be brought into service in due course for longer distance regional routes currently being planned.

Technology Division

The Group's Technology division has made a strong start to the year and continues to make a positive contribution to the Group with increasing margins. In the trading update in December 2016 the Company announced it had secured over GBP100,000 of annual recurring revenue maintenance contracts and further recurring contracts continue to be secured providing a growing portfolio of business in high security and sensitive locations such as airports, ports, governmental sites and correctional facilities.

In addition, Westminster continues to secure contracts for a wide range of products and services from around the world. In the first few weeks of 2017 the Group has delivered and commissioned Westminster's unique Diver Communication and Disruption system to a Middle East Navy and secured contracts for security equipment and solutions to countries as widespread as Belgium, Ethiopia, Guyana, Italy, Nigeria and the UK.

CTAC Litigation Settlement

The Group is pleased to report that the transfer of assets to satisfy the remaining amounts due to Westminster under the CTAC Litigation Settlement announced in July 2015 is underway ahead of the originally expected timescale and therefore expects these funds to benefit our current financial year.

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:

 
Westminster Group plc.                                      Tel: [phone] 
Peter Fowler (Chief Executive) 
Ian Selby (Chief Financial Officer) 
 
S. P. Angel Corporate Finance LLP (NOMAD & Broker)          Tel: [phone] 
Stuart Gledhill/Lindsay Mair 
 
Walbrook PR (Financial PR)                                  Tel: [phone] 
Tom Cooper/Paul Vann                                             0797 122 1972 
                                                     [e-mail] 
 

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.

During 2016 the Group has been active around the world and by way of example has supplied various products and services to clients as far afield as the Afghanistan, Aruba, Australia, Azerbaijan, Bahamas, Bulgaria, Canada, China, Croatia, Dubai, Egypt, Gambia, Germany, Greece, Hong Kong, India, Indonesia, Iraq, Italy, Jamaica, Jordan, Kenya, Korea, Kosovo, Malaysia, Netherlands, Nigeria, Portugal, Qatar, Romania, Rwanda, Saudi Arabia, Senegal, Singapore, Somalia, South Africa, Tanzania, Thailand, Tunisia, Turkey, UAE, UK, USA and Vietnam

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

This information is provided by RNS

The company news service from the London Stock Exchange

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February 23, 2017 10:00 ET (15:00 GMT)