Trading Update

RNS Number : 2695S

Westminster Group PLC

29 November 2012

 



29 November 2012

Westminster Group Plc:

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

Trading Update

Trading Update

The Board of Westminster today announces that it expects revenues for the year ended 31 December 2012 to be broadly similar to those for the year to 31 December 2011 (2011: £10.1m). This revenue expectation excludes the potential benefit of certain large ongoing solution and product sales opportunities deriving from the Group's original Product and Solutions business.  These opportunities may still deliver revenues and cash in this financial period however supply chain timing means that revenue recognition in this period is unlikely resulting in a materially lower contribution from this business than previously envisaged.

The revenue slippage outlined above, combined with our investment focus on our expanding aviation division, has delayed our expected pay-down of the Synergy loan which will result in a higher interest charge than envisaged for the current financial year. The Board intends to make repayment of this loan at the earliest opportunity.

Westminster Aviation Security Services  

Whilst 2012 expected revenues are similar in overall quantum to 2011, they will include approximately £1.7m of additional recurring revenues derived from the delivery of the managed services airport security business. In this business, revenues are generated by end user charges for each embarking passenger ("PAX") and for each kg of scanned hold cargo, and are billed directly to the airlines.

We are further pleased to report that, as a result of an improving local economy and an improved security record at the West African airport, which went live in May 2012, several further airlines have recently commenced flights there and others are expected to commence in the near term. A new passenger terminal which has a greatly expanded capacity is expected to open shortly. Furthermore our recent investment in cargo scanning equipment is expected to generate additional revenues when operations commence in early 2013.  Strong appetite for such services has already been expressed by airlines operating into that airport. This demonstrates the benefit to the local economy of the enhanced security services and gives Westminster further confidence in this model.

The Group is pleased to announce that it has signed exclusive heads of terms with a further airport for the provision of similar services. The Company is engaged in detailed contractual negotiations and will be deploying a survey team on site shortly.  Whilst, as ever, the result of such contract negotiations can be uncertain as to eventual outcome and timing, this is a very positive development for Westminster. The airport has annual embarking passenger volumes of approximately 0.4m PAX, very significantly larger than those of the West African contract announced in February 2012. The airport is located in a different part of the Africa but shares the same high economic growth factors. This indicates the scope of such offerings and the high level market interest being demonstrated.

Currently the Company is in active negotiations with additional airports across Africa for the provision of similar managed services. Our current prospect list has over 2.6m PAX in aggregate.  To put that in context, the contract signed in February2012 was for circa 0.12m PAX. On average, annual passenger volumes at these airports grew by approximately 10% in 2011. Furthermore Boeing expects passenger growth rates in African passenger volumes of over 5.6% to be maintained for the next 20 years. 

The Board recognises that the increasing opportunities in large managed services contracts for protecting critical infrastructure represent a considerable market opportunity for Westminster. Such contracts have the ability to generate substantial value for shareholders, and the Board is focussing its efforts on aligning the Company around this opportunity. 

Further updates will be made to the market as appropriate.

For further information please contact:

Westminster Group plc	Tel: [phone]
Peter Fowler (Chief Executive)
Ian Selby (Chief Financial Officer)
S. P. Angel Corporate Finance LLP (Nomad + Broker)	Tel: [phone]
Stuart Gledhill/Katy Birkin
Winningtons Financial (Financial PR)	Tel: [phone]
Tom Cooper/Paul Vann	0797 122 1972

Notes:

Westminster Group plc is a leader in the supply of system solutions and products to the security, defence, fire protection and safety markets worldwide.

Westminster's principal activity is the design, supply and ongoing support of advanced technology security solutions, risk assessments and close protection services. These can range from product only assignments, such as the supply of specialised scanners, to the design and implementation of an integrated system solution such as a border detection and surveillance system. The majority of its customer base, by value, comprises governments and government agencies, non governmental organisations and blue chip commercial organisations.

 

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