Westminster Group PLC Business & Trading Update & Notice of Results (3270O)

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RNS Number : 3270O

Westminster Group PLC

29 January 2019

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014

Westminster Group Plc

('Westminster', the 'Group' or the 'Company')

Business and Trading Update

and Notice of Results

Westminster Group Plc (AIM: WSG), a leading supplier of managed services and technology-based security solutions worldwide, is pleased to provide a trading update for the 12 months to 31 December 2018 and its business activities.

Following a particularly strong H2 performance in 2018 the Group expects to report a 33% year on year increase in revenues to circa GBP7.2m, an increase of GBP1.8m on the GBP5.4m reported for 2017. This increase in revenues is despite excluding $2m (GBP1.6m) of expected revenues relating to the $4.5m (GBP3.6m) vehicle screening contract within the Middle East, signed in March 2018, which we expected to be largely completed by the 31 December 2018, for which cash has been received from the customer in advance but which missed shipping deadlines and due to factory shutdowns is now scheduled for shipment in February 2019.

Despite excluding the $2m (GBP1.6m) of expected revenues and associated profit for the vehicle screening contract mentioned above from our 2018 results, an EBITDA positive result for the full year to 31 December 2018 remains achievable, subject to final adjustments such as consolidation of the recent Keyguard acquisition, revision of accounting estimates and the potential collection of a long-term outstanding debt currently being pursued. The final position will be clear in the next few weeks with further updates being provided as appropriate.

Trading for 2019 has started on a strong note and the $2m (GBP1.6m) for the Middle East contract is now expected to be booked in Q1 along with a further $224K (GBP176k) of commissioning works. January passenger numbers for our West Africa airport operations are at record levels and both our Managed Services and Technology divisions continue to have a healthy and active enquiry bank and are delivering on expectations.

The large scale, long term security contract for one of 60 airports in Iran, which was signed in May 2018, but which had to be put on hold following the US unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA), remains a key focus for the Company. We continue to work closely with our Iranian client and are pleased to report that the majority of issues and challenges created by the US actions have now been addressed. The European Union is hoping to have its Special Purpose Vehicle (SPV), to assist with Iranian trade transactions, in place in the early part of the year. Both parties remain committed to the project and despite the challenges continue to work towards commencing the project at the earliest opportunity.

In November 2018 we concluded the acquisition of Keyguard U.K Ltd ("Keyguard"). Keyguard is a UK based security and risk management company providing security services to organisations and critical national infrastructure across the country. It is focused on infrastructure assets in the Construction, Renewable Energy and Transport sectors. Services include manned guarding, mobile patrols, risk management and K9 services. The company has now been successfully integrated into the Group and is now operating from our corporate HQ in Oxfordshire. The acquisition has been immediately earnings enhancing, is expected to bring circa GBP1.5m pa of additional recurring revenue, and is synergistic to our business.

We have made good progress with a number of large-scale project opportunities under discussion and in our Interim Report in September we announced that we continued to work towards signing at least one further long-term Managed Services contract during the year although, as always, there is never certainty as to timing or outcome in these matters. In this respect we announced in December that the Chairman, Sir Tony Baldry, and CEO Peter Fowler, had recently returned from Africa having finalised discussions on one of our long-term airport security projects. Contracts have been drafted and, at the request of the client, Westminster have signed, and we await counter signature from the government. We have also made material advances with a number of other airport prospects, which have been in discussion for some time. Whilst there is never certainty as to timing or outcome in such matter we remain encouraged by developments and will update on these and all material developments when appropriate

Cash

At 31 December 2018, the Group had free cash available of circa GBP0.7m (after taking into account the remaining balance of supply costs still to be paid by Westminster to the end supplier pending final delivery of the middle eastern vehicle screening contract).

Board Changes

In our Annual Report issued in June 2018 we reported on the progress of our strategic review and the need to have the right people, processes and systems in place to successfully deliver our planned growth and as part of that process we have continued to strengthen our Board and senior management.

On 31 January 2018 Sir Tony Baldry moved from Non-Executive to Executive Chairman. As a former Parliamentary Under Secretary of State in the Foreign and Commonwealth Office, with a range of responsibilities including South Asia, Africa, North America and the West Indies, a former Governor of the Commonwealth Institute and a member of the Overseas Development Institute, Sir Tony's experience and insight into the emerging markets we are working in is proving to be invaluable.

On 1 June 2018 Patsy Baker joined the Board as a non-executive director and chair of the Disclosure and Nomination Committees. Patsy has enormous experience of companies growing their global business and brings considerable public relations experience to the Board.

On 1 November 2018 Mark Hughes BSc MBA FCA joined the Board as CFO. Mark's wide-ranging international experience, particularly in emerging markets together with his considerable experience in capital markets and in M&A work as CFO of listed (main market and AIM) venture capital, private and private equity owned companies, is a great asset in assisting the Company achieve its growth potential.

On 17 January 2019 we announced Charles Cattaneo joined the Board as a non-executive director and chair of the Audit and Risk Committees. Charles is a Fellow of the Institute of Chartered Accountants in England and Wales, a Fellow of the Securities and Investment Institute and has over 30 years' corporate finance experience gained in investment banking, industry and the accounting profession. Charles has been a director of a number of public and private companies and is currently the Chairman of the West Midlands Regional Advisory Group of the London Stock Exchange.

Also, on 17 January 2019 we announced James Sutcliffe was leaving the PLC Board to take on the role as Chairman of the International Advisory Board, where the benefit of his extensive international experience and high-level Government contacts overseas can be of significant value to the Company's business development and expansion going forward. There are already signs that this will produce future interesting contracts.

We therefore have a strong board with diverse skills and expertise.

Outlook

We are pleased with our 2018 results and most encouraged with the strong start to 2019 both in terms of our operations and in the progression of our various large-scale opportunities. Delivering on one or more of these opportunities will represent a major step forward towards achieving the Group's strategic growth objectives.

Notice of Results

Westminster will announce its Final Results for the 12 months to 31 December 2018 on Friday 24 May 2019.

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 
 
S. P. Angel Corporate Finance LLP (NOMAD 
 & Broker) 
Stuart Gledhill                            020 3470 0470 
Caroline Rowe 
 
Walbrook (Investor Relations) 
Tom Cooper                                 020 7933 8780 
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.

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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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January 29, 2019 02:00 ET (07:00 GMT)