Coronavirus and Business Update

RNS Number : 3211I

Westminster Group PLC

01 April 2020

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE MARKET ABUSE REGULATION NO. 596/2014 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN  

Westminster Group Plc

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

Coronavirus and Business Update

Westminster Group Plc (AIM: WSG), a leading supplier of managed services and technology-based security solutions worldwide, wishes to provide an update on its business activities and precautionary measures it is putting in place to deal with the effects of the Coronavirus ('COVID-19') pandemic.

An increasing number of countries around the world are restricting and cancelling flights in response to the COVID-19 pandemic including Freetown International Airport, in Sierra Leone, where Westminster provides airport security services. Whilst Sierra Leone has just announced its first recorded cases of COVID-19, the government had previously taken the precautionary step of quarantining passengers and restricting traffic to emergency and special flights only. Whilst this will have an inevitable impact on our revenues from this part of our operations for a period, we believe it is important that we also support our staff and the local community through what will be challenging times for the country, as we did during the Ebola epidemic a few years ago. We will be maintaining employment of our local staff to preserve security at the airport and will be using time between flights to undertake additional training for staff and to carry out comprehensive servicing and maintenance of all equipment.

In addition, through the Westminster Group Foundation, we are also supporting the local community with key supplies such as rice, sugar and water as part of our regular corporate social responsibility programme.

We are in the fortunate position that our business is built on having multiple revenue streams from diverse operations in varying parts of the world.  Whilst our airport operations are being impacted by the COVID-19 pandemic, our product sales team is experiencing record enquiry levels, particularly for fever screening and associated equipment. So far in Q1 2020, the Group has received over $2.1 million USD of online product orders of which $1.7 million USD were in March 2020 and over $1.2 million USD of that was the last two weeks alone, mitigating the reductions in our airport business. We are also fortunate in that much of our revenues are generated from long-term and recurring revenue contracts (we entered 2020 with over £8m of annual recurring revenue for the year) and so where we have reductions in such revenue streams during the COVID-19 disruption these are expected to return once the pandemic passes.

Our container screening business in Tema Port, Ghana, has not been affected by airport closures and restrictions and continues to operate and produce revenues as normal. As previously announced, we and our partners Scanport have been successfully running the container screening and secondary search operations since the port opened on 28 June 2019 under a Technical Partnership Agreement signed between Scanport and Westminster in March 2019. The main contract between Meridian Port Services and Scanport was signed in March 2020, confirming Westminster as the Technical Partner for the duration of the Contract, being a 5-year renewable term. The Technical Partnership Agreement will be updated or replaced in due course to reflect our operational requirements but given the Coronavirus situation, this is not considered important and does not alter the contractual or financial arrangements in place.

Our training business has been affected by the cancellation of many international flights although we are developing our non-contact services such as Computer Based Training (CBT), a growing area in aviation and other training areas, and we have some interesting developments underway that will allow training operations to be undertaken safely from a distance.

Our guarding business is likely to be affected by some site closures although there is a likelihood that some guarding requirements may increase during site closures to ensure sites remain secure.

Overall, despite the disruption from COVID-19, our business has performed well and has been profitable in Q1 with revenues of over £4 million an increase of more than 30% over the same period in 2019 (Q1 2019: £3.1 million) and we have a healthy order book going forward. We have put in place various cost reduction measures and we end Q1 2020 with £2.2 million in cash and are, in addition, pursuing government support initiatives. The Company currently expects to be able to operate effectively within its available resources and will closely monitor the ongoing situation, taking further cost reduction measures if necessary.

We continue to look for new opportunities to expand our online sales opportunities. Our overriding priority however continues to be the safety and wellbeing of our people around the world and to continue to provide a valuable service to our customers. To those ends we have put in place various precautionary measures and are undertaking regular risk assessments for all areas of our business.

Conversion of Convertible Loan Notes and Total Voting Rights

As part of the repayment of the Convertible Loan Notes holders to the value of £6,250 have elected to convert into 62,500 shares.

Application will be made for these shares, which will rank pari passu with the Company's existing issued Ordinary Shares, to be admitted to trading on AIM.  It is expected that Admission will become effective and that dealings on AIM will commence at 8:00am on or around 6 April 2020.

In accordance with the Financial Conduct Authority's Disclosure Guidance and Transparency Rules ('DTRs'), the Company hereby announces that it has 159,465,011 ordinary shares of 10p each in issue, none of which are held in treasury. Therefore, the total number of voting rights in the Company is 159,465,011.

The above figure of 159,465,011 may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the DTRs.

For further information please contact:

Westminster Group Plc	Media enquiries via Walbrook PR
Rt. Hon. Sir Tony Baldry - Chairman
Peter Fowler - Chief Executive Officer
Mark Hughes - Chief Financial Officer
S. P. Angel Corporate Finance LLP (NOMAD & Broker)
Stuart Gledhill	020 3470 0470
Caroline Rowe
Walbrook (Investor Relations)
Tom Cooper	020 7933 8780
Paul Vann
Nick Rome	[e-mail]

Notes:

Westminster Group plc is a specialist security and services group operating worldwide via an extensive international network of agents and offices in over 50 countries.

Westminster's principal activity is the design, supply and ongoing support of advanced technology security solutions, encompassing a wide range of surveillance, detection (including Fever 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.

The Westminster Group Foundation was formed in 2014 as an initiative of Westminster Group plc. during the West African Ebola Crisis.

The Foundation's goal is to support the communities in which the Group operates by working with local partners and other established charities to provide goods or services for the relief of poverty and the advancement of education and healthcare particularly in the developing world.

The Westminster Group Foundation is a Charitable Incorporated Organisation, CIO, registered with the Charities Commission number 1158653.

 

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