We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.10 | -3.08% | 3.15 | 3.00 | 3.30 | 3.25 | 3.15 | 3.25 | 269,116 | 08:14:39 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Security Systems Service | 9.53M | 121k | 0.0004 | 81.25 | 10.74M |
From Apr 2019 to Apr 2024
TIDMWSG
RNS Number : 2678P
Westminster Group PLC
25 May 2018
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')
Final Results for the year ended 31 December 2017
Westminster Group Plc (AIM: WSG), a leading supplier of managed services and technology-based security solutions worldwide, is pleased to announce its results for the year ended 31 December 2017.
Key Points:
Operational
-- Transformational fifteen-year aviation security opportunity in the Middle East with annual initial revenues of EUR24m very well advanced in 2017. This is a large and complex opportunity with very significant effort and progress in setting up the appropriate supply chain and infrastructure
-- Managed Services now the key focus of the Group and the pipeline of major long-term project opportunities continues to grow. Discussions in progress with governments and airport authorities in various parts of the world
-- New contract awards for equipment and services to airports around the world including a six-month airport security training programme
-- Strong recovery in West Africa passenger numbers continues, several new airlines commenced services with Turkish Airlines commencing in February 2018
-- Sovereign Ferries operations transferred to Sea Coach Express end September 2017
-- Board strengthened with the appointment of the Rt. Hon Sir Tony Baldry as Chairman and Martin Boden as Chief Financial Officer from 29 June 2017. Sir Malcolm Ross remains on the Board as Deputy Chairman
Financial
-- Revenues up by 22% to GBP5.4m (2016: GBP4.4m) with GBP3.6m from Managed Services division (2016: GBP2.8m) marking the end of the Ebola period in West Africa and resumption of passenger volumes. Technology division revenues of GBP1.8m compared with GBP1.6m in 2016
-- Gross margin decreased to 59% (2016: 71%) as a result of lower Technology margins (fewer large higher margin orders) and the impact of cost of sales being higher than revenues at Sovereign Ferries
-- Adjusted EBITDA loss GBP1.2m (2016; Profit GBP25k) largely due to the discontinued ferry operation. For continuing operations, EBITDA loss of GBP0.5m (2016: Profit GBP0.1m)
-- Equity of GBP2.4m issued in the year compared with GBP1.3m in 2016. No new debt finance raised in 2017 compared with GBP1.7m raised in 2016
-- The last remaining GBP1.2m of Darwin unsecured loan notes were converted into equity in 2017
-- Loss per share of 5.60p (2016: 2.46p). For continuing operations, loss per share of 2.24p (2016: 1.42p)
-- Cash balance of GBP0.4m at 31 December 2017 and GBP0.7m at 1 May 2018 (31 December 2016: GBP0.2m)
Post Period End
-- Middle East airport project confirmed as Iran, with initial annual revenues of EUR24m, signed but on hold awaiting clarification of the impact of the US withdrawal from the JCPOA and the implications for the Company's supply chain
-- Second separate contract for equipment supply into Iran, worth EUR2.6m, also signed but on hold awaiting clarification of the impact of the US withdrawal from the JCPOA and the implications for the Company's supply chain
-- Technology division contract worth $4.5m secured in March 2018, expected to be mostly delivered in 2018
-- New Managing Director appointed for Technology division in February 2018 -- GBP750k of new equity raised in January 2018 -- GBP87k of Beaufort warrants exercised in January 2018, Beaufort no longer joint broker
-- Convertible Secured Loan notes extended from 18 June 2018 to 30 June 2019, the Company has an option to extend for a further six months to 31 December 2019
-- Group in a much stronger financial position than at the start of the year
Commenting on the results and current trading Peter Fowler, Chief Executive of Westminster Group, said:
"I am pleased to report the Group has made progress during 2017. Revenues rose strongly in both our Managed Services and Technology divisions and the loss making Sovereign Ferries operation was discontinued in September 2017.
"We continue to build on the progress made in 2017 and we have achieved some notable successes during the first half of 2018 such as the $4.5 million contract award for an advanced vehicle screening solution in the Middle East and the signing of two contracts in Iran including the long-term project opportunity worth an initial EUR24million per annum. Whilst it is frustrating having to put these two Iranian contracts on hold while we evaluate the impact of the US withdrawal from the JCPOA agreement, securing in particular the major managed services contract, being for one of sixty airports in the country, was a momentous achievement and we remain hopeful that measures being put in place to protect EU companies against US extraterritorial actions will allow these projects to proceed.
"Our business is both stronger financially and in a better position than it has been for some time in terms of management, structure, revenues and prospects. Our Managed Services division is making progress on several fronts and our Technology division continues to deliver a wide range of products and solutions around the world. Over the next few months and years we have an opportunity to achieve unprecedented growth from the prospects we are pursuing. The Iranian airport opportunity and other managed services contracts could be transformational for the Group and the Board remains committed to delivering on this potential."
For further information please contact:
Hot Features
Premium
Westminster Group Plc Media enquiries via Walbrook PR
Rt. Hon. Sir Tony Baldry - Chairman
Peter Fowler - Chief Executive Officer
Martin Boden - Chief Financial Officer
S. P. Angel Corporate Finance LLP (NOMAD & Broker)
Stuart Gledhill 020 3470 0470
Lindsay Mair
Caroline Rowe
Walbrook (Investor Relations)
Tom Cooper 020 7933 8780
Paul Vann 0797 122 1972
tom.cooper@walbrookpr.com
Notes:
Westminster Group plc is a specialist security and services group operating worldwide through an international network of agents and offices in over 50 countries.
Westminster's principal activity is the design, supply and on-going 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.
Chairman's Statement
Overview
I am pleased to present the Final Results for Westminster Group plc for the year ended 31 December 2017.
The Group has made progress during the year with revenues up by 22% to GBP5.4m (2016: GBP4.4m), although at EBITDA level the loss of GBP1.2m compares to a profit in 2016 of GBP25k. Whilst over half of the EBITDA loss in 2017 related to the discontinued Ferry operations in Sierra Leone, we also continued with the necessary investment in our business, people and operations to deliver the significant potential growth we are working towards.
As a result of this investment we started 2018 in a stronger position than we have been in for some time. Both our Managed Services and Technology divisions are performing well and the Group closed its ferry operations from late September 2017 to focus on its core business. Our prospects have increased and operationally we have made significant progress. More detail on the strategic developments, projects and opportunities we are undertaking is covered in the CEO's Strategic Report.
During the year the Group raised GBP2.35m gross from the issue of new equity to support working capital requirements and business development costs, and the last remaining Darwin convertible unsecured loan notes (GBP1.2m) were converted into equity. In May 2018 the remaining secured convertible loan notes were extended to 30 June 2019, with an option for the Company to extend for a further six months to 31 December 2019.
We continue to work closely with and receive excellent support from the Foreign Office and UK Diplomatic Missions around the world and I am very grateful for the support these and other governmental departments provide to our teams and our operations worldwide.
Corporate Conduct
We operate worldwide with a focus on emerging markets and in a sector where discretion, professionalism and confidentiality are essential. It is vitally important that we maintain the highest standards of corporate conduct. The Corporate Governance Report sets out the detailed steps that we undertake to ensure that our standards, and those of our agents, can stand any scrutiny by Government or other official bodies.
We are conscious of the new AIM Notice 50 which requires companies to review their corporate governance disclosures annually and to adopt a recognised corporate governance code from 28 September 2018. We take our corporate governance responsibilities very seriously and will be adopting and working to the Quoted Companies Alliance (QCA) Corporate Governance Code with appropriate disclosures to be set out on the Company's corporate website.
Social Responsibility
As a Group, we take our corporate social responsibilities very seriously, particularly as we operate in emerging markets and in some cases in areas of poverty and deprivation. I am proud of the support and assistance we as a company provide in many of the regions in which we operate, and I would like to pay tribute to our employees and other individuals and organisations for their generous support and contributions to our registered charity, the Westminster Group Foundation. We work with local partners and other established charities to provide goods or services for the relief of poverty or advancement of education or healthcare making a difference to the lives of the local communities in which we operate. For more information or to make a donation please visit www.wg-foundation.org
Employees and Board
I am delighted to have become Chairman of the Westminster Group from the end of June 2017, and to have become Executive Chairman with effect from the end of January 2018. Sir Malcolm Ross remains on the Board as a Non-Executive Director and Deputy Chairman.
Martin Boden replaced Ian Selby as Chief Financial Officer at the end of June 2017 and I believe Martin's experience of international transactions and financial management of high growth businesses brings additional strength to our Board.
As a service-based business, our employees are key to delivering success. I believe we have an exceptional workforce and I would like to take this opportunity to express my appreciation to all our employees, both in the UK and overseas, who have worked extremely hard during the year.
I would finally like to extend my appreciation to our investors for their continued support and to our strategic investors who are bringing their expertise to help deliver value for all.
Rt. Hon. Sir Tony Baldry
Chairman
Chief Executive Officer's Strategic Report
Business Description
Our vision remains to build a global business with strong brand recognition delivering niche security solutions and long term managed services to high growth and emerging markets around the world, with a particular focus on long term recurring revenue business.
Our target customer base is primarily governments and governmental agencies, critical infrastructure (such as airports, ports & harbours, borders and power plants), and large scale commercial organisations worldwide.
Our business has evolved from a traditional UK focused security business to what can be described today as a truly international business. Furthermore, our evolution continues as we expand our operations into new areas and new territories creating additional opportunities around the world in the provision of long term managed security services and security products.
We deliver our wide range of solutions and services through a number of operating companies that are currently structured into two operating divisions; Managed Services and Technology; both primarily focused on international business as follows:
Managed Services division:
Focusing on long term (typically 10 - 25 years) recurring revenue managed services contracts such as the management and operation of security solutions in airports, ports and other such facilities, together with the provision of manpower, consultancy and training services.
Technology division:
Focussing on providing advanced technology led security solutions encompassing a wide range of surveillance, detection, tracking, screening and interception technologies to governments and organisations worldwide.
In addition to providing our business with a broad range of opportunities, these two divisions offer cost effective dynamics and vertical integration with the Technology division providing vital infrastructure and complex technology solutions and expertise to the Managed Services division. This reduces both supplier exposure and cost and provides us with increasing purchasing power. Our Managed Services division provides a long-term business platform to deliver other cost effective incremental services from the Group.
We continue to deliver a wide range of solutions to governments and blue-chip organisations around the world. Our reputation grows with each new contract delivered - this in turn underpins our strong brand and provides a platform from which we can expand our Managed Services business. This remains a key focus for the Group with its growth prospects in Emerging Markets and the resulting significant recurring revenue stream potential.
Business Review
As highlighted in the Chairman's Statement the Group has made progress during 2017. Revenues rose strongly in both our Managed Services and Technology divisions and the loss making Sovereign Ferries operation was discontinued in September 2017.
Enquiry levels remain healthy and levels of interest in the Group's services remain high across both operating divisions. However, whilst our Technology division provides the technological resources and platform to expand our operations around the world it is our Managed Services division, with its potential for delivering large scale, long term, recurring revenue and transformational growth, which is increasingly our core focus, particularly within the aviation security sector.
Managed Services Division
Our Managed Services division and the significant growth opportunities it is progressing is the key focus of the Group. During 2017 the Managed Services division made progress on several fronts.
Our aviation security business in West Africa has performed well as the recovery from the West African Ebola outbreak continues. We have seen steady growth with flight schedules increasing in 2017 and passenger growth across all airlines apart from Air France where their flights are code-shared with KLM. For the full year we had c.111,000 embarking passengers, an increase of 14% on the c.97,000 embarking in 2016. The growth in the number of carriers is encouraging and we expect to see a continuation of passenger growth in 2018 as several new airlines commenced services towards the end of 2017 and in Q1 2018 Turkish Airlines also commenced services with a new route to Istanbul.
Westminster's international reputation and expertise in the field of aviation security continues to grow and in 2017 we secured contracts to assist airport authorities around the world with their equipment and training needs. We plan to expand our training team in 2018 to meet the demand for their services.
We have signed a number of Memorandums of Understanding (MoU) with governments and airport authorities in our target markets, several of which were added in 2017. Due, in part, to the confidential nature of such projects and commercial sensitivity, we are no longer announcing any individual MoU when signed and we will update the market on material developments as appropriate and in accordance with our regulatory responsibilities.
During 2017 we continued to spend considerable time, effort, and expense in progressing our large scale long term potential opportunities. In this respect a defining aspect of our activities during the year has been the progress made with our major Middle East airport project opportunity in Iran. Iran has a population of close to 80 million people and over 60 airports and as such could be one of the world's fastest growing aviation opportunities.
Following the relaxation of sanctions on the Joint Comprehensive Plan of Action (JCPOA) agreement, we commenced discussions with the Iranian Airport Authorities and signed a Memorandum of Understanding in March 2016 to assist with equipment, processes and support systems to help bring Iranian airport security up to international standards. Following preliminary consultations, we received a formal Letter of Intent in May 2016 relating, initially, to one of the country's main airports.
Over the past two years we have been involved in wide ranging and complex and ongoing negotiations with commercial and political bodies with meetings in various jurisdictions. To be in a position to undertake this transformational project we have had to put in place a complex supply chain and invest in our corporate infrastructure, including the establishment of operations in Germany. We also dealt with a constantly changing scope of works as the client prioritised its requirements. In addition, given the sensitivities around operating in Iran, we have had to overcome numerous challenges including banking, financing and strict compliance with international restrictions involving detailed due diligence and considerable professional advice from across Europe and the United States (US). Throughout the process we have received valuable support from the UK government at the highest levels.
On 22 December 2017 we announced we had finalised legal and commercial negotiations apart from a few minor commercial and contractual issues. On 28 March 2018 we announced that the outstanding commercial and contractual issues has been agreed and that we were awaiting the client's internal approval process to complete. On 7 May 2018 we signed a long term (15 year) contract with annual revenues in excess of EUR24 million Euros which will become effective on the exchange of formal board letters between us and the client. The purpose of the exchange of letters is to allow both parties time to ensure everything is in place before commencing operations. In addition, we also signed a secondary smaller equipment supply contract for EUR2.65 million Euros. Unfortunately, on 8 May President Trump made an announcement that the US were unilaterally and immediately withdrawing from the JCPOA agreement and re-imposing sanctions. This has created uncertainty both in Iran and the international business community.
None of Westminster's proposed equipment or services relates to any proposed sanctions. The other signatories to the JCPOA agreement, being China, Russia, Germany, France and the UK, have all stated their continued support for the agreement, as have the European Union (EU), the United Nations, the International Atomic Energy Agency and most other leading countries around the world. Germany, France and the United Kingdom have jointly vowed to uphold the JCPOA agreement and the EU is considering putting measures in place to protect European companies. However, given the initial uncertainty and following initial discussions with our customer and commercial partners, the Board made the decision to place both projects on hold whilst it seeks clarification on the impact of the US withdrawal from the JCPOA and the implications for the Company's supply chain including the potential replacement of some equipment suppliers.
Securing this major contract was a momentous achievement and we remain hopeful that non-sanctioned activities by non-US companies will be allowed to continue in Iran, and that the EU will put measures in place to protect EU companies against US extraterritorial actions allowing these projects, and others planned, to proceed.
Whilst the Iranian airport project has been a high priority and any delay in implementing the contract now signed is a frustration it is only one of a number of significant project opportunities we are pursuing around the world and we are well placed to sign at least one other long term Managed Services contract during 2018, although with projects of this scale and complexity there can never be certainty of outcome or timing.
Technology Division
During the year the Technology division secured contracts for a wide range of products and services to clients from around the world. By way of example of the diversity of our contracts we secured orders for Explosive Ordnance Disposal equipment for the Italian Army, Underwater Security systems for a Middle East Navy, Port security equipment to Bangladesh, screening equipment to Japan and Vietnam and we continued to provide security equipment and services to government facilities across the UK.
In 2017 we supplied numerous clients in around 60 countries across the world, especially in the UK, Middle East, both East and West Africa, Eastern Europe, Asia and Latin America.
With our ever-growing population of sold systems that require regular maintenance, in 2017 we increased our recurring revenue base of maintenance and service contracts, both in the UK and overseas, by over 30% to GBP236k per annum (2016: GBP180k). These contracts help underpin the cost base of the Division and is an area of the business we expect to grow further.
In addition, the Division has provided various equipment and technology support services to the Managed Services division.
In order to improve the management and potential of the Technology division in February 2018 we appointed Stuart Gilbert as Managing Director. Stuart has a strong background in international security solutions, previously holding senior positions in multinational security organisations and will lead the growth of this division.
Sovereign Ferries
Our ferry services in Sierra Leone, under the branding Sovereign Ferries, commenced formal services in January 2017. In June 2017, we announced that we had secured around 3% of the addressable ferry market, with the market as a whole estimated to be worth around GBP4 million per annum in revenues and that over the next 12 months we would be seeking to grow our market share to beyond a 14% share (the level at which we anticipated the operation would be providing a positive contribution). However, passenger growth and financial performance did not meet the Board's expectations, due in part to growing competition. Revenues in H1 2017 amounted to GBP51k (H1 2016: nil) and the EBITDA loss amounted to GBP0.4m (H1 2016: nil). With future passenger growth forecasts being downgraded, losses would be greater in quantum and duration than had been previously forecast. The Board took the decision in September 2017 to exit the ferry service in a manner that would not adversely affect airport passenger transfer to and from the mainland - this was one of the initial drivers for the ferry service.
We consequently entered into a formal agreement to transfer the operation to Sea Coach Express, the largest ferry operator in Sierra Leone, commencing on 25 September 2017. Under this Agreement, Sea Coach took over the Sovereign Ferries' operations and responsibility for management and operation of the ferry service. We transferred the Sierra Princess to Sea Coach as part of the transaction and cancelled the lease on our second vessel the Sierra Duchess without penalty.
By combining the ferry operations, the enlarged service is able to offer the travelling public a greatly enhanced service with increased choice, routes, vessels and landing stages.
We will continue to operate and manage the ferry terminals in accordance with our 21-year agreement and will receive a share of revenues on ticket sales made through our own operations, together with a payment for all passengers travelling to and from our terminals although we do not expect these revenues to be material.
We still own the Sierra Queen and given our exit from the ferry operations we are reviewing our options for disposal including a sale. As the vessel requires maintenance work and is not in service a sale may take time. The Board has made a full provision in the 2017 financial statements to write down the remaining Sovereign Ferries assets (not transferred to Sea Coach Express) to nil. The costs associated with the exit from the ferry operations have been treated as exceptional exit costs in the 2017 results.
Strategic Review
In 2016 I announced we were undertaking a wide ranging strategic review of our operations to ensure we are well positioned to maximise opportunities going forward and successfully take the business to a new level. This review is ongoing, and we continue to review our operations, structure, management and advisors. In 2017 we made a number of changes to our management structure and board of directors. This process continues with both senior management and new board appointments in 2018 broadening our range of experience and expertise.
Our business is set to benefit from unprecedented growth opportunities, particularly with our airport security operations, and it is essential we have the right strategies, people, processes and systems in place to successfully deliver such growth. Accordingly, the changes we have made to date and intend to make over the coming months will, I believe, serve the Company well and greatly assist our planned growth.
Business Outlook
Our business is now in a better position than it has been for some time in terms of management, structure, revenues and prospects.
It has been extremely frustrating to have finally signed the major Iranian airport contract we have been pursuing for the past two years, only to have to delay implementing it following the US unilateral withdrawal from the JCPOA and threat of renewed sanctions. Whilst none of our equipment and services come under existing or threatened sanctions we must be certain of our position and that of our suppliers, before proceeding.
Never-the-less securing this major contract was an important achievement and demonstrates our managed services model is attractive and deliverable to airports of varying sizes and in challenging markets world-wide. We remain hopeful that the EU, which exported EUR10.8 billion of goods and services to Iran in 2017, will put measures in place to protect EU companies doing business in Iran against US extraterritorial actions, allowing projects such as ours in Iran to proceed. As previously announced, the Iranian airport project in question, which is just one of over 60 airports in the country, would, if it proceeds, add over EUR24 million Euros annually to our revenue.
We continue to pursue the other project opportunities underway around the world and our Managed Services division is making progress on a number of fronts. We are also securing an increasing number of smaller contracts to assist airport authorities around the world with their equipment and training needs, and this enhances our prospects for our large scale, long term airport opportunities. We are working towards signing at least one other long term Managed Services contract during 2018 although with projects of this scale and complexity there can never be certainty of outcome or timing.
Our Technology division continues to deliver a wide range of products and solutions around the world. Our recent $4.5m order received in the Middle East that we have been pursuing for over three years demonstrates the time such large-scale projects can take to finalise. Being the first multi-million-pound order for this division for a while it also demonstrates the lumpy revenue nature of this division. There are however many such opportunities we are pursuing and to capitalise on these opportunities, we have strengthened the management of this division with the recent appointment of Stuart Gilbert as Managing Director.
Over the next few months and years we have an opportunity to achieve unprecedented growth from the prospects we are pursuing. The Iranian airport opportunity and other managed services contracts could be transformational for the Group. The Board and I remain committed to delivering on this potential.
Peter Fowler
Chief Executive Officer
Chief Financial Officer's Report
Discontinued Operations
On 25 September 2017 the Group entered into a sale agreement to transfer the operation of Sovereign Ferries in Sierra Leone to Sea Coach Express. As part of this agreement, title of the Sierra Princess has been transferred to Sea Coach Express and the local company Sovereign Ferries (SL) Limited was transferred with an effective date as at 1 January 2018 following completion of the local 2017 audit. The company is being transferred with no assets and no liabilities - the Sierra Princess was leased and not on the balance sheet and the Sierra Queen and other Sovereign Ferries assets have been written down to nil.
The results of the discontinued operations are shown separately in the Consolidated Statement of Comprehensive Income and this report refers to both the results for all Group operations and the results for continuing operations.
Revenue
Revenues of GBP5.4m were 22% higher than the GBP4.4m reported in 2016. The Managed Services division revenues increased by 28% to GBP3.6m (2016: GBP2.8m) and the Technology division revenues rose by 9% to GBP1.8m (2016: GBP1.6m). The. Managed Services revenues continued to recover following the end of the Ebola crisis in West Africa and the consequent growth in passenger volumes and security fees. The discontinued Sovereign Ferries revenues were immaterial in both 2017 and 2016.
Gross Margin
Gross margin fell to 59% (2016: 71%) as a result of lower margins on Technology division sales and cost of sales exceeding revenues on the discontinued operations. There were fewer high margin technology sales in 2017 than achieved in 2016.
Operating Cost Base
Total Group administrative expenses were GBP8.7m (2016: GBP4.5m). Within these expenses an IFRS share option expense of GBP0.1m (2016: GBP0.1m) was recorded, a depreciation and amortisation charge of GBP0.3m (2016: GBP0.2m), impairment charges of GBP2.9m (2016: GBPnil), costs associated with exiting the ferry operation of GBP0.3m and specific pre-contract costs related to progression of the Iranian Middle East Airport opportunity of GBP0.5m (2016: GBP0.2m).
Operational EBITDA
The Group loss from operations was GBP5.5m (2016: GBP1.4m). When adjusted for the exceptional and non-cash items set out below and depreciation and amortisation, the Group recorded an adjusted EBITDA loss of GBP1.2m compared to a small profit of GBP25k in the prior year.
2017 2016
Reconciliation to adjusted EBTIDA GBP'000 GBP'000
Loss from Operations (5,487) (1,389)
Depreciation, Amortisation and Impairment charges 3,202 234
------------- -------------
Reported EBITDA (2,285) (1,155)
Share Option expense 63 103
Impact of Ebola - 272
Iranian Middle East Airport opportunity costs 603 220
Ferry exit costs 335 585
Other exceptional items 50 -
------------- -------------
Adjusted EBTIDA (loss) / profit (1,234) 25
============= =============
The adjusted EBITDA loss for continuing operations in 2017 was GBP0.5m with a further GBP0.7m of losses from discontinued operations.
Finance Costs
Total finance costs of GBP0.6m (2016: GBP0.6m) were consistent with the prior year as interest bearing debt levels remained constant. Senior Secured Convertible Notes (10% coupon) generated an underlying cash charge of GBP0.2m (2016: GBP0.2m). The remaining GBP0.4m (2016: GBP0.4m) of finance charges were non-cash based and related to IFRS valuations of the convertible loan notes.
Result for the Year
The Group loss before taxation was GBP6.1m (2016: GBP2.0m) and the loss per share was 5.6p (2016: 2.5p). For continuing operations, the loss before taxation was GBP2.4m (2016: GBP1.1m) and the loss per share was 2.2p (2016: 1.4p).
Statement of Financial Position
Total Group assets amounted to GBP3.2m at 31 December 2017 compared with GBP6.4m at 31 December 2016.
Net Group current assets amounted to less than GBP0.1m at 31 December 2017 compared to GBP0.2m at 31 December 2016
.
The Group debtor balance as at 31 December 2017 was GBP0.7m (2016: GBP0.9m). Average days sales outstanding at the year-end were 36 (2016: 32).
Cash and cash equivalents of GBP0.4m at 31 December 2017 compared with GBP0.2m at 31 December 2016.
Trade payables were GBP1.1m (2016: GBP1.1m) and average creditor days were 24 (2016: 35).
Total equity at 31 December 2017 stood at a deficit of GBP0.3m (2016: surplus of GBP2.3m).
Convertible Loan Notes (CLN) and Convertible Unsecured Loan Notes (CULN)
The convertible unsecured loan notes issued to Darwin Capital Limited ("Darwin") were repaid in full in February and April 2017. Darwin held warrants attached to their loan notes and details are provided under Equity Issues below.
Summary of movements in loan notes at principal value CULN CLN Total
GBP'000 GBP'000 GBP'000
At 1 January 2017 1,200 2,245 3,445
Conversions in the year (1,200) - (1,200)
At 31 December 2017 and 24(th) May 2018 - 2,245 2,245
At 31 December 2017, the secured CLN carried a coupon of 10% payable quarterly in arrears, had a conversion price of 35p and matured on 18 June 2018. In May 2018, with maturity getting close, we have extended the term of the secured CLN to 30 June 2019 at a coupon of 12%. The Company has an option to extend the term to 31 December 2019 at a higher coupon of 15% for that last six months. The conversion price has been reduced to 25p per share.
Equity Issues
On 28 February 2017 the Company issued 5,161,290 ordinary shares of 10p at 11.625p per share, with a further 10 million ordinary shares issued at nominal value on 18 April 2017, and 7.5 million ordinary shares issued at nominal value on 26 September 2017.
A further 10,669,227 ordinary 10p shares were issued during the year at an average price of 11.24p per share on conversion of the remaining GBP1.2m CULN.
Summary of Warrants at 31 December 2017
Number Holder and Strike Life (years) Vesting Criteria
Description Price (p)
589,330 Darwin, February 2016 20.15 3 At grant:- detachable
-------------------------- ----------- ------------- ----------------------
1,100,000 Darwin, November 2016 28 3 At grant:- detachable
-------------------------- ----------- ------------- ----------------------
5,000,000 Hargreave Hale, June 2016 12 3 At grant:- detachable
-------------------------- ----------- ------------- ----------------------
The November 2016 Warrants were sold by Darwin to a new holder in April 2018.
Cash Flow Statement
During the year the Group had an operating cash outflow of GBP1.5m (2016: GBP1.7m) which arose primarily from trading losses. Just under half of cash outflow (GBP0.7m) related to continuing operations with GBP0.8m relating to discontinued operations. In 2016, GBP1.0m of cash outflow related to continuing operations with GBP0.7m relating to discontinued operations.
The Group reported a favourable working capital movement of GBP0.6m (2016: GBP0.6m adverse movement).
During the year the Group raised GBP2.4m gross from the issue of new equity. In 2016, GBP1.3m was raised from new equity with a further GBP1.7m of proceeds from the issue of convertible loan notes.
During the year the Group was provided with overdraft support by its bankers HSBC and at present has a small but unused overdraft facility.
Reconciliation from adjusted EBITDA to normalised operating cash 2017 2016
flow GBP'000 GBP'000
Adjusted EBITDA (1,234) 25
Loss on asset disposal 9 13
Net changes in working capital 641 (638)
Equity settlement payment 25 -
--------- ---------
Net Cash used in underlying operating activities (559) (600)
========= =========
Net Cash used in underlying operating activities is presented excluding exceptional items, share options expense, and depreciation and amortisation.
Events after the Reporting Period
-- On 3 January 2018, Beaufort Securities exercised warrants over 875,000 new Ordinary Shares of 10 each at an exercise price of 10p per Ordinary Share. Accordingly, 875,000 new Ordinary Shares were issued in settlement of this exercise. Beaufort Securities Limited are no longer joint broker to the Company.
-- On 31 January 2018, the Company raised GBP0.75m (gross) through a placing of 3,409,091 new Ordinary Shares of 10p each at 22 pence per Ordinary Share. The placing was undertaken by S P Angel Corporate Finance LLP who received 170,455 Warrants to subscribe for Ordinary Shares at an exercise price of 22 pence per share.
-- On 28 March 2018, the Technology division secured a $4.5m contract for the provision of advanced vehicle screening solutions to an existing client in the Middle East
-- On 10 May 2018, the Company announced that its major Middle East project opportunity is in Iran. The contract has been signed but the project is on hold as the Company investigates the impact of the US withdrawal from the JCPOA and the implications for the Company's supply chain
-- On 24 May 2018, the Company extended the term of its Secured Convertible Loan Notes from 18 June 2018 to 30 June 2019, with an option to extend for a further six months to 31 December 2019. The coupon has been raised from 10% to 12% until June 2019 and increases to 15% for the six months to 31 December 2019 should the Company exercise its option. The conversion price has been reduced from 35p per share to 25p.
Key Performance Indicators
The Group constantly monitors various key performance indicators for factors affecting the overall performance. At Group level the revenues and gross margin are monitored to give a constant view of the Group's operational performance. As employment costs are the single largest cost base for the Group the number of employees and employee costs are also monitored to ensure best use of resources. Days Sales Outstanding is used to measure as to the cash conversion of revenue and identifies debtor aging issues.
The Managed Services division derives its revenues and cash flows based on the number of passengers using a facility such as an airport. The number of passengers served is monitored and with the growth in aviation training we have introduced KPI's for the number of contracts won.
The Technology division measures its sales activity by reference to the number of enquiries received per month and the number of orders received. The number of countries and number of return customers are monitored to give a view on the performance of the division.
Group 2017 2016
Revenue GBP'm 5.4 4.4
--------- ---------
Gross Margin 59% 71%
--------- ---------
Days Sales Outstanding 36 32
--------- ---------
Number of Employees 283 240
--------- ---------
Average Employee Cost Per Head GBP8,365 GBP9,450
--------- ---------
Managed Services 2017 2016
Passengers Served ('000) 111 97
------- -----
Number of Training Projects Won 16 2
------- -----
% of Training Project Won 61.50% 100%
------- -----
Technology Division 2017 2016
Average Enquiries Per Month 128 117
----- -----
Average Number of Orders Per Month 29 21
----- -----
Number of Countries Supplied 41 39
----- -----
Number of Return Customers 164 150
----- -----
Martin Boden
Chief Financial Officer
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2017
Note 2017 2017 2017 2016 2016 2016
Continuing Discontinued Total Continuing Discontinued Total
Operations Operations Operations Operations
----------------- ----- ----------------- ---------------- -------- ----------------- ---------------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
REVENUE 3 5,330 66 5,396 4,397 9 4,406
Cost of sales (2,015) (182) (2,197) (1,217) (79) (1,296)
----------------- ----- ----------------- ---------------- -------- ----------------- ---------------- --------
GROSS PROFIT 3,315 (116) 3,199 3,180 (70) 3,110
----------------- ----- ----------------- ---------------- -------- ----------------- ---------------- --------
Administrative
expenses (5,133) (3,553) (8,686) (3,757) (742) (4,499)
----------------- ----- ----------------- ---------------- -------- ----------------- ---------------- --------
LOSS FROM
OPERATIONS (1,818) (3,669) (5,487) (577) (812) (1,389)
----------------- ----- ----------------- ---------------- -------- ----------------- ---------------- --------
Analysis of
operating loss
Loss from
operations (1,818) (3,669) (5,487) (577) (812) (1,389)
Add back
amortisation 31 - 31 7 - 7
Add back
depreciation 139 144 283 110 117 227
Add back
impairment
charges 397 2,491 2,888 - - -
Add back share
option expense 63 - 63 103 - 103
Add back
exceptional
items([1]) 4 653 335 988 492 585 1,077
----------------- ----- ----------------- ---------------- -------- ----------------- ---------------- --------
EBITDA
Profit/(loss)
from underlying
operations (535) (699) (1,234) 135 (110) 25
----------------- ----- ----------------- ---------------- -------- ----------------- ---------------- --------
Finance costs 5 (630) - (630) (566) - (566)
LOSS BEFORE
TAXATION (2,448) (3,669) (6,117) (1,143) (812) (1,955)
----------------- ----- ----------------- ---------------- -------- ----------------- ---------------- --------
Taxation 7 - - - 46 - 46
----------------- ----- ----------------- ---------------- -------- ----------------- ---------------- --------
LOSS
ATTRIBUTABLE TO
EQUITY
SHAREHOLDERS (2,448) (3,669) (6,117) (1,097) (812) (1,909)
----------------- ----- ----------------- ---------------- -------- ----------------- ---------------- --------
LOSS AND TOTAL
COMPREHENSIVE
LOSS
ATTRIBUTABLE TO:
OWNERS OF THE
PARENT (2,248) (3,669) (5,917) (1,097) (812) (1,909)
NON-CONTROLLING
INTEREST (200) - (200) - - -
----------------- ----- ----------------- ---------------- -------- ----------------- ---------------- --------
LOSS AND TOTAL
COMPREHENSIVE
LOSS (2,448) (3,669) (6,117) (1,097) (812) (1,909)
LOSS PER SHARE 9 (2.24p) (3.36p) (5.60p) (1.42p) (1.04p) (2.46p)
----------------- ----- ----------------- ---------------- -------- ----------------- ---------------- --------
[1] Exceptional items relate to certain costs or incomes that derive from events or transactions that fall within the normal activities of the Group but which, individually or, if of a similar type, in aggregate, are excluded by virtue of their size and nature in order to reflect management's view of the performance of the Group
Consolidated Statement of Financial Position
As at 31 December 2017
Group Group
2017 2016
Note GBP'000 GBP'000
----------------------------------------------------------- ----- --------- ---------
Goodwill - 397
Other intangible assets 129 132
Property, plant and equipment 1,952 4,635
Investment in subsidiaries - -
TOTAL NON-CURRENT ASSETS 2,081 5,164
----------------------------------------------------------- ----- --------- ---------
Inventories 39 198
Trade and other receivables 693 894
Cash and cash equivalents 392 152
----------------------------------------------------------- ----- --------- ---------
TOTAL CURRENT ASSETS 1,124 1,244
----------------------------------------------------------- ----- --------- ---------
Assets of disposal groups classified as held for sale - - ----------------------------------------------------------- ----- --------- --------- TOTAL ASSETS 3,205 6,408 ----------------------------------------------------------- ----- --------- --------- Called up share capital 11 12,074 8,711 Share premium account 9,226 9,169 Merger relief reserve 299 299 Share based payment reserve 621 569 Equity reserve on convertible loan note 186 186 Revaluation reserve 134 134 Retained earnings: At 1 January (16,772) (14,739) Loss for the year (5,917) (1,909) Other changes in retained earnings 36 (124) At 31 December (22,653) (16,772) ----------------------------------------------------------- ----- --------- --------- (DEFICIT)/EQUITY ATTRIBUTABLE TO: OWNERS OF THE COMPANY (113) 2,296 NON-CONTROLLING INTEREST (200) - ----------------------------------------------------------- ----- --------- --------- TOTAL DEFICIT(EQUITY) (313) 2,296 ----------------------------------------------------------- ----- --------- --------- Borrowings 12 2,184 3,059 Deferred tax liabilities - - ----------------------------------------------------------- ----- --------- --------- TOTAL NON-CURRENT LIABILITIES 2,184 3,059 ----------------------------------------------------------- ----- --------- --------- Deferred income - 27 Trade and other payables 1,096 1,026 ----------------------------------------------------------- ----- --------- --------- TOTAL CURRENT LIABILITIES 1,096 1,053 ----------------------------------------------------------- ----- --------- --------- Liabilities of disposal group classified as held for sale 238 - ----------------------------------------------------------- ----- --------- --------- TOTAL LIABILITIES 3,518 4,112 ----------------------------------------------------------- ----- --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 3,205 6,408 ----------------------------------------------------------- ----- --------- ---------
Consolidated Statement of Changes in Equity
for the year ended 31 December 2017
Called Share Merger Share Revaluation Equity Retained Total Non Total
up premium relief based reserve reserve earnings controlling
share account reserve payment on interest
capital reserve convertible
loan note
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
AS AT 1
JANUARY
2017 8,711 9,169 299 569 134 186 (16,772) 2,296 - 2,296
Shares issued
for cash 2,291 - - - - - - 2,291 - 2,291
Cost of share
issues - (76) - - - - - (76) - (76)
Share based
payment
charge - - - 88 - - - 88 - 88
Exercise of
share options 5 - - (2) - - 2 5 - 5
Lapse of share
options - - - (34) - - 34 - - -
CLN conversion 1,067 133 - - - - - 1,200 - 1,200
--------------- -------- -------- -------- -------- ------------ ------------ --------- -------- ------------ --------
TRANSACTIONS
WITH OWNERS 3,363 57 - 52 - - 36 3,508 - 3,508
--------------- -------- -------- -------- -------- ------------ ------------ --------- -------- ------------ --------
Total
comprehensive
expense for
the year - - - - - - (5,917) (5,917) (200) (6,117)
AS AT 31
DECEMBER
2017 12,074 9,226 299 621 134 186 (22,653) (113) (200) (313)
--------------- -------- -------- -------- -------- ------------ ------------ --------- -------- ------------ --------
Called Share Merger Share Revaluation Equity Retained Total Non Total
up premium relief based reserve reserve earnings controlling
share account reserve payment on interest
capital reserve convertible
loan note
AS AT 1
JANUARY
2016 6,345 9,170 299 258 134 219 (14,739) 1,686 - 1,686
Shares issued
for cash 1,300 - - - - - - 1,300 - 1,300
Share based
payment
charge - - - 103 - - - 103 - 103
Lapse of share
options - - - (37) - - 37 - - -
Warrants
issued
with loan
notes - - - 245 - - (150) 95 - 95
CLN conversion 1,066 - - - - (33) (11) 1,022 - 1,022
Loan notes
issued - (1) - - - - - (1) - (1)
--------------- -------- -------- -------- -------- ------------ ------------ --------- -------- ------------ --------
TRANSACTIONS
WITH OWNERS 2,366 (1) - 311 - (33) (124) 2,519 - 2,519
--------------- -------- -------- -------- -------- ------------ ------------ --------- -------- ------------ --------
Total
comprehensive
expense for
the year - - - - - - (1,909) (1,909) - (1,909)
AS AT 31
DECEMBER
2016 8,711 9,169 299 569 134 186 (16,772) 2,296 - 2,296
--------------- -------- -------- -------- -------- ------------ ------------ --------- -------- ------------ --------
Consolidated Cash Flow Statement
for the year ended 31 December 2017
2017 2017 2017 2016 2016 2016
Continuing Discontinued Total Continuing Discontinued Total
Operations Operations Operations Operations
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------ ---------------- ---------------- -------- ----------------- ---------------- --------
LOSS AFTER TAX (2,448) (3,669) (6,117) (1,097) (812) (1,909)
Taxation credit - - - (46) - (46)
LOSS BEFORE TAX (2,448) (3,669) (6,117) (1,143) (812) (1,955)
Non-cash
adjustments 10 1,294 2,635 3,929 809 107 916
Net changes in
working capital 10 435 206 641 (691) 53 (638)
NET CASH USED IN
OPERATING
ACTIVITIES (719) (828) (1,547) (1,025) (652) (1,677)
----------------- ------ ---------------- ---------------- -------- ----------------- ---------------- --------
INVESTING
ACTIVITIES:
Purchase of
property, plant
and equipment (69) (4) (73) (123) (408) (531)
Purchase of
intangible
assets (56) - (56) (105) - (105) Proceeds from disposal of fixed assets 1 - 1 - - - CASH OUTFLOW FROM INVESTING ACTIVITIES (124) (4) (128) (228) (408) (636) ----------------- ------ ---------------- ---------------- -------- ----------------- ---------------- -------- CASHFLOWS FROM FINANCING ACTIVITIES: Gross proceeds from the issues of ordinary shares 2,376 - 2,376 1,300 - 1,300 Costs of share issues (160) - (160) (45) - (45) Net proceeds from the issue of convertible loan notes - - - 1,675 - 1,675 Costs associated with the issue of convertible loan notes - - - (272) - (272) Interest paid (265) - (265) (247) - (247) Other loan repayments, including interest (36) - (36) (96) - (96) CASH INFLOW FROM FINANCING ACTIVITIES 1,915 - 1,915 2,315 - 2,315 ----------------- ------ ---------------- ---------------- -------- ----------------- ---------------- -------- Net change in cash and cash equivalents 1,072 (832) 240 1,062 (1,060) 2 ----------------- ------ ---------------- ---------------- -------- ----------------- ---------------- -------- CASH AND EQUIVALENTS AT BEGINNING OF YEAR 152 150 ----------------- ------ ---------------- ---------------- -------- ----------------- ---------------- -------- CASH AND EQUIVALENTS AT OF YEAR 392 152 ----------------- ------ ---------------- ---------------- -------- ----------------- ---------------- --------
Notes to the consolidated financial statements
for the year ended 31 December 2017
1. General information and nature of operations
Westminster Group plc ("the Company") was incorporated on 7 April 2000 and is domiciled and incorporated in the United Kingdom and quoted on AIM. The Group's financial statements for the year ended 31 December 2017 consolidate the individual financial statements of the Company and its subsidiaries. The Group designs, supply and provides on-going advanced technology solutions and services to governmental and non-governmental organisations on a global basis.
2. Basis of preparation
Basis of preparation
The Group financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The Parent Company has elected to prepare its financial statements in accordance with IFRS.
The financial information is presented in the Company's functional currency, which is Great British Pounds ('GBP') since that is the currency in which the majority of the Group's transactions are denominated.
Basis of measurement
The financial statements have been prepared under the historical cost convention with the exception of certain items which are measured at fair value as disclosed in the accounting policies below.
Consolidation
(i) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries for the year ended 31 December 2017.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. Subsidiaries are fully consolidated using the purchase method of accounting from the date that control commences until the date that control ceases. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
(iii) Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions are eliminated in preparing the consolidated financial statements.
(iv) Company financial statements
Investments in subsidiaries are carried at cost less provision for any impairment. Dividend income is recognised when the right to receive payment is established.
Going concern
The Group made losses during the period of GBP6,117,000 (2016: GBP1,909,000), of which GBP2,448,000 (2016: GBP1,097,000) related to continuing operations. The cash outflow from operating activities during the year was GBP719,000 (2016: GBP1,025,000), which was financed through raising new equity. On 24 May 2018, the Company extended the term of its Secured Convertible Loan Notes from 18 June 2018 to 30 June 2019, with an option to extend for a further six months to 31 December 2019.
The directors have therefore reviewed the Group's resources at the date of approving the financial statements, and their projections for future trading, which due to discontinuing the Sierra Leone Ferry Operation and winning incremental new business give a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, which for the avoidance of doubt is at least 12 months from the date of signing the financial statements. Thus they continue to adopt the going concern basis of accounting in the preparing the financial statements.
Business combinations
The consideration transferred by the group to obtain control of a subsidiary is calculated as the sum of the acquisition date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition date fair values.
Foreign currency
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-measurement of monetary items at year-end exchange rates are recognised in profit or loss. Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction and not subsequently retranslated.
Foreign exchange gains and losses are recognised in arriving at profit before interest and taxation.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief decision-maker. The chief decision-maker has been identified as the Executive Board, at which level strategic decisions are made.
An operating segment is a component of the Group
-- That engages in business activities from which it may earn revenues and incur expenses,
-- Whose operating results are regularly reviewed by the entity's chief operating decisions maker to make decisions about resources to be allocated to the segment and assess its performance, and
-- For which discrete financial information is available.
Revenue
Revenue comprises the fair value of the consideration received or receivable for the sale of products and services, net of value added tax, rebates and discounts and after eliminating sales within the Group. Revenue is recognised as follows:
(i) Supply of products
Revenue in respect of the supply of products is recognised when title effectively passes to the customer.
(ii) Supply and installation contracts and supply of services
Where the outcome can be estimated reliably in respect of long-term contracts and contracts for on-going services, revenue represents the value of work done in the period, including estimates of amounts not invoiced. Revenue in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion, where the stage of completion can be assessed with reasonable accuracy. This is assessed by reference to the estimated project costs incurred to date compared to the total estimated project costs. Revenue is calculated to reflect the substance of the contract, and is reviewed on a contract-by-contract basis, with revenues and costs at each divisible stage reflecting known inequalities of profitability. Where a contract is loss making, the full loss is recognised immediately. Managed Services income is recognised on the basis of the volume of passengers and freight.
(iii) Maintenance income
Revenues in respect of the supply of maintenance contracts are recognised on a straight line basis over the life of the contract. The unrecognised portion of maintenance income is included within trade and other payables as deferred income.
(iv) Training courses
Revenues in respect of training courses are recognised when the trainees attend the courses.
Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin. Expenditure for warranties is recognised and charged against the associated provision when the related revenue is recognised. Certain items have been disclosed as operating exceptional due to their size and nature and their separate disclosure should enable better understanding of the financial dynamics.
Interest income and expenses
Interest income and expenses are reported on an accruals basis using the effective interest method.
Goodwill
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair value of consideration transferred, and b) the recognised amount of any non-controlling interest in the acquiree and c) acquisition date fair value of any existing equity interest in the acquiree, over the acquisition date fair value of identifiable net assets. If the fair value of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately. Goodwill is carried at cost less accumulated impairment losses.
Other intangible assets
Acquired intangibles that are as a result of a business combination are recorded at fair value and are amortised on a straight line over the expected useful lives.
Other intangible assets comprise website costs and licences. Website costs are capitalised and amortised on a straight line basis over 5 years, the expected economic life of the asset. This amortisation is charged to administrative expenses.
Property, plant and equipment
Land and buildings held for use are held at their revalued amounts, being the fair value on the date of revaluation, less any subsequent accumulated depreciation. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the balance sheet date.
Any revaluation increase arising on the revaluation of such land and buildings is recognised in other comprehensive income, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in which case the increase is credited to the profit or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of land and buildings is charged as an expense to the extent that it exceeds the balance, if any, held in the revaluation reserve relating to a previous revaluation of that asset.
Depreciation on revalued buildings is charged to the statement of comprehensive income.
Plant and equipment, office equipment, fixtures and fittings and motor vehicles are stated at cost less accumulated depreciation and any recognised impairment loss.
Depreciation is charged so as to write off the cost or valuation of assets to their residual value over their estimated useful lives, using the straight-line method, typically at the following rates. Where certain assets are specific for a long term contract and the customer has an obligation to purchase the asset at the end of the contract they are depreciated in accordance with the expected disposal / residual value.
Category Rate ---------------------------- --------------------------- Freehold buildings 2% Plant and equipment 7% to 25% Office equipment, fixtures & fittings 20% to 33% Ferries Depreciated over 21 years. Motor vehicles 20% ---------------------------- ---------------------------
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income, unless they are directly attributable to qualifying assets, in which case they are capitalised.
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.
Impairment on non-financial assets
At each reporting date, the Group reviews the carrying amounts of its non-current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). The recoverable amount is the higher of
fair value less costs to sell and value in use. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years.
Financial instruments
Financial assets
The Group's financial assets include cash and cash equivalents and loans and other receivables. All financial assets are recognised when the Group becomes party to the contractual provisions of the instrument. All financial assets are initially recognised at fair value, plus transaction costs. They are subsequently measured at amortised cost using the effective interest method, less any impairment losses. Any changes in value are recognised in the Statement of Comprehensive Income. Interest and other cash flows resulting from holding financial assets are recognised in the Statement of Cash Flows when received, regardless of how the related carrying amount of financial assets is measured.
Loans and other receivables are provided against when objective evidence is received that the Group will not be able to collect all amounts due to it in accordance with the original terms of the receivables. The amount of the write-down is determined as the difference between the asset's carrying amount and the present value of estimated future cash flows.
Cash and cash equivalents comprise cash at bank and deposits and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities unless a legally enforceable right to offset exists.
Financial liabilities
The Group's financial liabilities comprise trade and other payables and borrowings. All financial liabilities are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method. Financial liabilities are derecognised when they are extinguished, discharged, cancelled or expire.
Convertible loan notes with an option that leads to a potentially variable number of shares, have been accounted for as a host debt with an embedded derivative. The embedded derivative is accounted for at fair value through profit and loss at each reporting date. The host debt is recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method.
Convertible loan notes which can be converted to share capital at the option of the holder, and where the number of shares to be issued does not vary with changes in fair value, are considered to be a compound instrument.
The liability component of a compound instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognised initially at the difference between the fair value of the compound instrument and fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components.
Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Investments in subsidiaries
Subsidiary fixed asset investments are valued at cost less provision for impairment.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of ordinarily interchangeable items are assigned using the first in, first out cost formula. Costs principally comprise of materials and bringing them to their present location.
Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax. Current and deferred tax are recognised as an expense or income in profit or loss, except in respect of items dealt with through equity, in which case the tax is also dealt with through equity.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on material differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the tax profit not the accounting profit.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities unless a legally enforceable right to offset exists.
Equity, reserves and dividend payments
Share capital represents the nominal value of shares that have been issued.
Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
Merger relief reserve includes any premiums on issue of share capital as part or all of the consideration in a business combination.
The share based payment reserve represents equity-settled share-based employee remuneration until such share options are exercised or lapse.
The revaluation reserve within equity comprises gains and losses due to the revaluation of property, plant and equipment.
Retained earnings include all current and prior period retained profits and losses.
Dividend distributions payable to equity shareholders are included in liabilities when the dividends have been approved in a general meeting prior to the reporting date.
Defined contribution pension scheme
The Group operates a defined contribution pension scheme for employees in the UK and is operating under auto enrolment. Local labour in Africa benefit from a termination payment on leaving employment. The expected value of this is accrued on a monthly basis.
Share-based compensation (Employee Based Benefits)
The Group operates an equity-settled share-based compensation plan. The fair value of the employee services received in exchange for the grant of options is recognised as an expense over the vesting period, based on the Group's estimate of awards that will eventually vest, with a corresponding increase in equity as a share based payment reserve. For plans that include market based vesting conditions, the fair value at the date of grant reflects these conditions and are not subsequently revisited.
Fair value is determined using Black-Scholes option pricing models. Non-market based vesting conditions are included in assumptions about the number of options that are expected to vest. At each reporting date, the number of options that are expected to vest is estimated. The impact of any revision of original estimates, if any, is recognised in profit or loss, with a corresponding adjustment to equity, over the remaining vesting period.
The proceeds received when vested options are exercised, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event which it is probable will result in an outflow of economic benefits that can be reliably estimated.
SIGNIFICANT MANAGEMENT JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
The following are significant management judgements in applying the accounting policies of the Group that have the most significant effect on the financial statements.
Revenue recognition
Recognition of income is considered appropriate when all significant risks and rewards of ownership are transferred to third parties. In respect of long-term contracts and contracts for on-going services, turnover represents the value of work done in the year, including estimates of amounts not invoiced. Turnover in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion, where the stage of completion can be assessed with reasonable accuracy. In this process management make significant judgements about milestones, actual work performed and the estimated costs to complete the work. Revenue is calculated to reflect the substance of the contract, and is reviewed on a contract-by-contract basis, with revenues and costs at each divisible stage reflecting known inequalities of profitability.
Consolidation of entities in which the Group holds less than 50% of the voting rights.
Management considers that the Group has de facto control of Westminster Sierra Leone Limited even though it has less than 50% of the voting rights.
SIGNIFICANT MANAGEMENT ESTIMATES IN APPLYING ACCOUNTING POLICIES
The following are significant management estimates in applying the accounting policies of the Group that have the most significant effect on the financial statements.
Revalued freehold property
The freehold property is stated at fair value. A full revaluation exercise was carried out in May 2017. The fair value is based on market value, being the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.
Standards in issue not yet effective
New standards, amendments and interpretations
No new standards, amendments or interpretations effective for the first time in the year ended 31 December 2017 have had a material impact on Group or parent Company.
At the date of authorisation of these financial statements, the following amendments and interpretations to existing accounting standards have been published but are not yet effective.
-- IFRS 9 Financial Instruments (effective date 1 January 2018) -- IFRS 15 Revenue from Contracts with Customers (effective date1 January 2018) -- IFRS 16 Leases (effective date 1 January 2019)
Management anticipate that the above pronouncements will be adopted in the Group's accounting policies for the first period after the effective date but will have no material impact on the Group.
IFRS 9 'Financial instruments' effective for periods beginning on or after 1 January 2018. The standard removed multiple classification and measurement models for financial assets requirement by IAS 39 and introduces a model that has only three classification categories: fair value through other comprehensive income, fair value through the income statement and amortised cost. Classification is driven by the business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. The accounting and presentation for financial liabilities and for derecognising financial instruments is relocated from IAS 39 without any significant changes. IFRS 9 introduces additional changes relating to financial liabilities. IFRS 9 adds new requirements to address the impairment of financial assets and hedge accounting.
IFRS 15 'Revenue from contracts with customers'; effective for periods beginning on or after January 1, 2018. The standard establishes a new five-step model that will apply to revenue arising from contacts with customers. Revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. This is a converged standard on revenue recognition which replaces IAS 18 'Revenue', IAS 11 'Construction contracts' and related interpretations. The Group has assessed the impact of the new standard which is not material to the Group's operations.
IFRS 16 'Leases'; effective for periods beginning on or after January 1, 2019. Under IFRS 16, a contract is, or contains a lease if the contact conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The new standard eliminates the classification of leases by lessees as either finance leases or operating leases and instead introduces an integrated lessee accounting model. Applying this model, lessees are required to recognise a lease liability reflecting the obligation to make future lease payments and a 'right-of-use' asset for virtually all lease contracts.
IFRS 16 includes an optional exemption for certain short-term leases and leases of low-value assets. The Group has assessed the impact of the new standard which is not material to the Group's operations.
Alternative performance measures (APM)
In the reporting of financial information, the Directors have adopted the APM 'EBITDA profit from underlying operations' (APMs were previously termed 'Non-GAAP measures'), which is not defined or specified under International Financial Reporting Standards (IFRS).
This measure is not defined by IFRS and therefore may not be directly comparable with other companies' APMs, including those in the Group's industry.
APMs should be considered in addition to, and are not intended to be a substitute for, or superior to, IFRS measurements.
Purpose
The Directors believe that this APM assists in providing additional useful information on the underlying trends, performance and position of the Group. This APM is also used to enhance the comparability of information between reporting periods and business units, by adjusting for non-recurring or uncontrollable factors which affect IFRS measures, to aid the user in understanding the Group's performance.
Consequently, APMs are used by the Directors and management for performance analysis, planning, reporting and incentive setting purposes and this remains consistent with the prior year.
The key APM that the Group has focused on is as follows:
EBITDA profit from underlying operations': This is the headline measure used by management to measure the Group's performance, and is based on operating profit before the impact of financing costs, share based payment charges, depreciation, amortisation, impairment charges and exceptional items. Exceptional items relate to certain costs that derive from events or transactions that fall within the normal activities of the Group but which, individually or, if of a similar type, in aggregate, are excluded by virtue of their size and nature in order to reflect management's view of the performance of the Group.
3. Segmental reporting
Operating segments
The Board considers the Group on a Business Unit basis. Reports by Business Unit are used by the chief decision-maker in the Group. The Business Units operating during the year are the three operating divisions; Managed Services Aviation, Technology and Managed Services Sovereign Ferries. This split of business segments is based on the products and services each offer.
Managed Services Technology Group and Central Managed Services Group Total
Aviation Sovereign Ferries
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2017
Supply of products - 1,470 - - 1,470
Supply and
installation
contracts - 36 - - 36
Maintenance and
services 3,386 264 - - 3,650
Training courses 174 - - - 174
Ferry ticket sales - - - 66 66
Revenue 3,560 1,770 - 66 5,396
----------------------- ---------------------- ----------- ------------------ ----------------------
Segmental underlying
EBITDA 1,195 (44) (1,714) (671) (1,234)
Share option expense - - (63) - (63)
Exceptional items (603) - (50) (335) (988)
Impairments - - (397) (2,491) (2,888)
Depreciation &
amortisation (100) (15) (55) (144) (314)
Segment operating
result 492 (59) (2,279) (3,641) (5,487)
----------------------- ---------------------- ----------- ------------------ ----------------------
Finance cost - - (630) - (630)
Profit/(Loss) for the
financial year 492 (59) (2,909) (3,641) (6,117)
----------------------- ---------------------- ----------- ------------------ ----------------------
Segment assets 1,429 360 1,414 2 3,205
----------------------- ---------------------- ----------- ------------------ ----------------------
Segment liabilities 368 359 2,553 238 3,518
----------------------- ---------------------- ----------- ------------------ ----------------------
Capital expenditure 23 3 96 4 126
----------------------- ---------------------- ----------- ------------------ ----------------------
For the year ended 31 December 2017 the decision has been taken to no longer apportion central overheads in the segmental reporting.
Managed Services Technology Group and Central Managed Services Group Total
Aviation Sovereign Ferries
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2016
Supply of products - 1,286 - - 1,286
Supply and
installation
contracts - 177 - - 177
Maintenance and
services 2,758 160 - 3 2,921
Training courses 16 - - - 16
Ferry ticket sales - - - 6 6
---------------------- ----------- ------------------ ---------------------- ------------
Revenue 2,774 1,623 - 9 4,406
----------------------- ---------------------- ----------- ------------------ ----------------------
Segmental underlying
EBITDA 1,280 273 (1,418) (110) 25
Share option expense - - (103) - (103)
Exceptional items (492) - - (585) (1,077)
Depreciation &
amortisation (79) (16) (22) (117) (234)
Apportionment of
central overheads (1,140) (946) 2,116 (30) -
----------------------- ---------------------- ----------- ------------------ ----------------------
Segment operating
result (431) (689) 573 (842) (1,389)
----------------------- ---------------------- ----------- ------------------ ----------------------
Finance cost - - (566) - (566)
Income tax charge (7) - 53 - 46
----------------------- ---------------------- ----------- ------------------ ----------------------
Profit/(Loss) for the
financial year (438) (689) 60 (842) (1,909)
----------------------- ---------------------- ----------- ------------------ ----------------------
Segment assets 1,593 641 1,523 2,651 6,408
----------------------- ---------------------- ----------- ------------------ ----------------------
Segment liabilities 311 448 3,268 85 4,112
----------------------- ---------------------- ----------- ------------------ ----------------------
Capital expenditure 79 42 107 408 636
----------------------- ---------------------- ----------- ------------------ ----------------------
Geographical areas
The Group's international business is conducted on a global scale, with agents present in all major continents. The following table provides an analysis of the Group's sales by geographical market, irrespective of the origin of the goods/services.
2017 2016
GBP'000 GBP'000
United Kingdom & Europe 919 369
Africa 3,779 3,458
Middle East 152 104
Rest of the World 546 475
5,396 4,406
======== ========
Some of the Group's assets are located outside the United Kingdom where they are being put to operational use on specific contracts. At 31 December, 2017 fixed assets with a net book value of GBP895,000 (2016: GBP3,591,000) were located in Africa.
Major customers who contributed greater than 10% of total Group revenue
In 2017 no single customer contributed more than 10% of the Group revenue (in 2016 no customers contributed 10% of the Group's revenue). Approximately 60% (2016: 60%) of the Group's revenues are derived from the contract with the Sierra Leone airport authority. This contract contains many individual customers.
4. Exceptional items
2017 2016
GBP'000 GBP'000
Middle East airport pre-contract costs 603 220
Ferry closure costs 335 -
Ferry pre-launch costs - 585
Loss of margin arising from fall in passenger numbers due to Ebola crisis - 272
Other 50 -
988 1,077
======== ========
5. Finance costs
Group Group
2017 2016
GBP'000 GBP'000
Interest payable on bank and other borrowings (44) (30)
Interest expenses on convertible loan notes (586) (536)
-------- --------
Total finance costs (630) (566)
======== ========
6. Loss from operations
The following items have been included in arriving at the loss for the financial year
Group Group
2017 2016
GBP'000 GBP'000
Staff costs (see Note 8) 2,367 2,267
Depreciation of property, plant and equipment 283 227
Amortisation of intangible assets 31 7
Operating lease rentals payable
Property 83 112
Plant and machinery 3 3
Other 26 42
Foreign exchange loss/(gain) 102 (22)
7. Taxation
Analysis of charge in year:
Group Group
2017 2016
GBP'000 GBP'000
Current year
UK Corporation tax on profits in the year - -
Potential foreign corporation tax on profits in the year - 7
- 7
Group Group
2017 2016
GBP'000 GBP'000
Reconciliation of effective tax rate
Loss on ordinary activities before tax (6,117) (1,955)
======== ========
Loss on ordinary activities multiplied by the standard rate of corporation tax in the UK of
19.25% (2016: 20.0%) (1,178) (391)
Effects of:
(Income)/expenses not deductible for tax purposes 973 88
Capital allowances less than depreciation (105) (203)
Other short term timing differences 1
Recognised/unrecognised losses carried forward 310 512
Adjustment in respect of prior years - (53)
Total tax - (credit)/charge - (46)
======== ========
Tax losses available for carry forward (subject to HMRC agreement) were GBP12.6m (2016: GBP11.0m).
Changes to the UK corporation tax rates were substantively enacted as part of the Finance Bill 2015 (on 26 October 2015) and Finance Bill 2016 (on 7 September 2016) to 17% from 1 April 2020. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements.
8. Employee costs
Employee costs for the Group during the year
2017 2016
GBP'000 GBP'000
Wages and salaries 2,117 2,007
Social security costs 187 157
2,304 2,164
Share based payments 63 103
2,367 2,267
======== ========
The Group operates a stakeholder pension scheme. The Group made pension contributions totalling GBP7,000 during the year (2016: GBP10,000), and pension contributions totalling GBP1,000 were outstanding at the year-end (2016: GBP1,000).
Details of the Directors' remuneration are included in the Remuneration Committee Report. Key management within the business are considered to be the Board of Directors. The total Directors' remuneration during the year was GBP623,000 (2016: GBP541,000) and the highest paid director received remuneration totalling GBP192,000 (2016: GBP192,000).
Average monthly number of people (including Executive Directors) employed
Group
2017 2016
Number Number
Continuing Discontinued Total Continuing Discontinued Total
Operations Operations Operations Operations
By function:
Sales 3 - 3 3 - 3
Operations 220 32 252 195 14 209
Administration 23 - 23 22 - 22
Management 5 - 5 6 - 6
-------------------- ------------------- ------ -------------------- ------------------- ------
251 32 283 226 14 240
==================== =================== ====== ==================== =================== ======
9. 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.
The weighted average number of ordinary shares is calculated as follows:
2017 2016
'000 '000
Issued ordinary shares
Start of year 87,107 63,455
Effect of shares issued during the year 22,087 14,261
----------------- ----------------
Weighted average basic and diluted number of shares for year 109,194 77,716
================= ================
For the year ended 31 December 2017 and 2016 the issue of additional shares on exercise of outstanding share options, convertible loans and warrants would decrease the basic loss per share and there is therefore no dilutive effect. Loss per share was 5.60p (2016: 2.46p).
10. Cash flow adjustments and changes in working capital
The following non-cash items and adjustments for changes in working capital have been made to loss before tax to arrive at operating cash flow:
Group 2017 2017 2017 2016 2016 2016
Continuing Discontinued Total Continuing Discontinued Total
Operations Operations Operations Operations
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Adjustments:
Depreciation,
amortisation and
impairment
of non-financial
assets 567 2,635 3,202 127 107 234
Finance costs 630 - 630 566 - 566
Loss on disposal of
non-financial
assets 9 - 9 13 - 13
Share-based payment
expenses 88 - 88 103 - 103
Total adjustments 1,294 2,635 3,929 809 107 916
---------------- ---------------- -------- ---------------- ---------------- -------------
Net changes in
working capital:
Decrease/(increase)
in inventories 159 - 159 (141) - (141)
Decrease/(increase)
in trade and other
receivables 162 39 201 (431) 21 (410)
Decrease in deferred
income (27) - (27) - - -
Increase/(decrease)
in trade and other
payables 141 167 308 (119) 32 (87)
Total changes in
working capital 435 206 641 (691) 53 (638)
---------------- ---------------- -------- ---------------- ---------------- -------------
11. Called up share capital
The total amount of issued and fully paid shares is as follows:
Ordinary Share Capital 2017 2016
Number GBP'000 Number GBP'000
At 1 January 87,107,903 8,711 63,454,538 6,345
Arising on conversion of Convertible Loan Notes 10,669,227 1,067 10,653,365 1,066
Arising on exercise of Share Options and Warrants 55,000 5 - -
Shares issued to settle an annual broker fee 250,000 25 - -
Other Issues for Cash 22,661,290 2,266 13,000,000 1,300
At 31 December 120,743,420 12,074 87,107,903 8,711
============ ======== =========== ========
During the year the following equity issues took place
Date Comment Shares Issued Issue price
1 February 2017 CULN conversion 2,228,367 13.463p
28 February 2017 Equity placing 5,161,290 11.625p
28 February 2017 CULN conversion 3,440,860 11.625p
4 April 2017 Employee share options exercised 55,000 10.0p
18 April 2017 Equity placing 10,000,000 10.0p
18 April 2017 Share based payment 250,000 10.0p
18 April 2017 CULN conversion 5,000,000 10.0p
26 September 2017 Equity Placing 7,500,000 10.0p
12. Borrowings
Group Group
2017 2016
GBP'000 GBP'000
Non-current
Convertible loan note 2,184 2,071
Convertible unsecured loan note - 952
Other - 36
-------- --------
Total borrowings 2,184 3,059
======== ========
13. Events after the Reporting Period
-- On 3 January 2018, Beaufort Securities exercised warrants over 875,000 new Ordinary Shares of 10 each at an exercise price of 10p per Ordinary Share. Accordingly, 875,000 new Ordinary Shares were issued in settlement of this exercise. Beaufort Securities Limited are no longer joint broker to the Company.
-- On 31 January 2018, the Company raised GBP0.75m (gross) through a placing of 3,409,091 new Ordinary Shares of 10p each at 22 pence per Ordinary Share. The placing was undertaken by S P Angel Corporate Finance LLP who received 170,455 Warrants to subscribe for Ordinary Shares at an exercise price of 22 pence per share.
-- On 28 March 2018, the Technology Division secured a $4.5m contract for the provision of advanced vehicle screening solutions to an existing client in the Middle East
-- On 10 May 2018, the Company announced that its major Middle East project opportunity is in Iran. The contract has been signed but the project is on hold as the Company investigates the impact of the US withdrawal from the JCPOA and the implications for the Company's supply chain
-- On 24 May 2018, the Company extended the term of its Secured Convertible Loan Notes from 18 June 2018 to 30 June 2019, with an option to extend for a further six months to 31 December 2019. The coupon increases from 10% to 12% until June 2019 and increases to 15% for the six months to 31 December 2019 should the Company exercise its option. The conversion price has been reduced from 35p per share to 25p.
14. Publication of Non-Statutory Financial Statements
The financial information set out above does not constitute the Company's Annual Report and Financial Statements for the years ended 31 December 2017 or 2016. The Annual Report and Financial Statements for 2016 have been delivered to the Registrar of Companies and those for 2017 will be delivered following the Company's Annual General Meeting on 26 June 2018. The auditor's reports on both the 2017 and 2016 accounts were unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of the Companies Act 2006. Whilst the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards (IFRSs) this announcement does not itself contain sufficient information to comply with IFRSs. Copies of the Annual Report and Financial Statements for the year to 31 December 2017 will be posted to shareholders by 5 June 2018 and will be obtainable from the Company's registered offices or www.wg-plc.com when published. The information in this preliminary announcement was approved by the Board on 24 May 2018.
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 rns@lseg.com or visit www.rns.com.
END
FR AIMTTMBITTTP
(END) Dow Jones Newswires
May 25, 2018 02:00 ET (06:00 GMT)
1 Year Westminster Chart |
1 Month Westminster Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
