AGM Statement

RNS Number : 5210C

Westminster Group PLC

18 June 2019

 

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

Westminster Group Plc

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

AGM Statement

Westminster Group Plc (AIM: WSG), a leading supplier of managed services and technology-based security solutions worldwide, will hold its Annual General Meeting today at 11am at the offices of BDO LLP, 150 Aldersgate Street, London, EC1A 4AB. At the meeting, Westminster's Chief Executive, Peter Fowler, will provide shareholders with the following update:

"In our 2018 Annual Report I was pleased to report that our business is now in a better position than it has been for some time in terms of management, structure, revenues and prospects. Trading for 2019 has started on a strong note with both order intake and revenues ahead of budget.

"Passenger numbers for our West Africa airport operations for the first five months of 2019 are at record levels and both our Managed Services and Technology divisions continue to have a healthy and active enquiry bank.

"In April 2019, our Technology division announced the award of a USD $3.4million contract for the provision of advanced container screening solutions to two separate ports in an Asian country, which had been under negotiation for several months. Having earlier this year delivered the remainder of the USD $4.5m vehicle screening contract in the Middle East, which the Company secured in 2018, this latest award for container screening in Asia is a testament to Westminster's expertise and global reach.

"In our 2018 Annual Report we announced that as part of our expansion strategy we are looking at both acquisition and strategic joint venture opportunities to complement our many organic growth prospects.

"Today I am delighted to be able to announce significant developments that demonstrate the benefits of this strategy.

"In March this year, following several months of discussions, we entered into a Technical Partnership Agreement with a Ghanaian company, Scanport Ltd. with the aim and purpose of entering into substantive negotiations with Meridian Port Services Limited ('MPS') regarding a contract to manage, operate, maintain and upgrade, as necessary, the container screening services at the new Tema Container Port in Ghana, West Africa. Westminster's role as technical partner is to provide the requisite expertise and management of the operation.

"The new Tema Container Port is a $1billion investment project by MPS, expanding the port's capacity from 1 million Twenty-foot Equivalent Units ('TEU') pa to over 3.5 million pa, creating a world-class container port operation. The facility incorporates some of the largest and most advanced Ship-to-Shore cranes in the world, designed to accommodate the world's largest container ships. The port has advanced automated systems and processing incorporating world-class technologies, including the container screening solutions, ensuring that there will be 100% screening of all containers entering or leaving the port. The port is due to commence operations later this month, on 28 June 2019.

"Given the imminent opening of the port and the need for preparatory operations to commence immediately, I am pleased to report that Scanport has now received a letter of intent with MPS acknowledging Westminster as the Technical Partner and setting out the preliminary terms regarding the appointment and scope of work. The document confirms exclusivity whilst final rates and the formal agreement are finalised, indicating this should be concluded within 30 days.

"Accordingly, our advanced deployment team have arrived in Ghana today to begin preparations for the commissioning and handover of the screening equipment from the manufacturers and the recruitment, training and deployment of the screening personnel and the setting up of offices and logistics etc. Our revenues will commence once the final terms have been agreed and the formal contract finalised and we expect, once fully underway, that this potential contract will materially increase our annual revenues with the screening operation also expected to generate several hundred new jobs in Ghana. Further details on this substantial, exciting and long-term managed services project will be announced in due course.

"There are further Joint Venture and Strategic Partnerships currently being negotiated in different parts of the world which we will announce at the appropriate time.

"In terms of our acquisition strategy, following on from our acquisition of Keyguard in 2018 which is now fully integrated into the Group, I was pleased to be able to announce in May 2019 that we acquired the French company, Euro Ops, providing us with a French base and better access to Francophone countries, particularly in Africa. I am pleased to report that the Euro Ops team have already generated interest for our long-term airport security programmes in several countries in Francophone Africa. As always there is never certainty as to outcome or timing, but we are very encouraged by the level of activity and performance of Euro Ops since acquisition.

"In our 2018 Annual Report we announced the opening of our new training facility based at our Headquarters in Banbury, Oxfordshire, and that we have already delivered specialist training from delegates from one of the largest airlines in Europe. We believe this training facility opens up new business opportunities for the Group. By way of example, we are now contracted to provide specialist x-ray threat image identification training for a new overseas governmental client. The facility is also currently in the process of achieving the Security Industry Authority accreditation enabling us to deliver a broad cross section of certified training courses beyond Aviation Training. We expect this facility to open up new training opportunities both within the UK and overseas.

"Also, in our 2018 Annual Report we announced we have received offers for the Sierra Queen which is for sale following disposal of the Ferry business and I am pleased to report there have been positive developments in this respect and we will provide an announcement on this as and when a contract has been signed.

Outlook

"We have seen steady year on year revenue growth over the past few years with 2018 being 24% up on the previous year.  We expect this to continue. Based on our current order book, the improvement in our airport passenger numbers and our run rate business, including Keyguard and Euro Ops, we expect 2019 revenues to be significantly ahead of 2018 even without any further new major contract awards, which of course would materially improve the results. We are in a sound financial position having extended the term of our Convertible Loan Note Facility until 30 June 2020, as reported in the announcement of 22 May 2019 and currently have circa £530,000 in cash.

"We continue to monitor and process our various large-scale managed services prospects around the world this includes the Africa airport project which we provided an update on in our 2018 Annual Report for which we continue to await the outcome of the clients internal reorganisation and our Iranian contract which remains on hold whilst we continue to closely monitor the geopolitical situation and the future of the Joint Comprehensive Plan of Action. Whilst it no longer features in our short-term internal forecasts, as mentioned in our 2018 Annual Report we are investigating potential arrangements that could be put in place that could unlock or preserve the potential of this project without affecting the Group's other business or banking arrangements.

"Amongst the many large-scale project opportunities we are pursuing there are several under signed Memorandum of Understanding ('MoU'), some of which we have previously announced and of those, excluding the two we have previously advised in the 2016 Annual report as long-term prospects and one which is in a region affected by the Iranian issue, all remain active and any one or more of which may lead to significant business in the future.  

"Due in part to the confidential nature of such projects and commercial sensitivity, as previously advised, we are no longer announcing or commenting on any individual MoU or project opportunity as this can lead to speculation particularly as negotiations can ebb and flow over prolonged periods and take some time to reach a final outcome. We will of course update the market on material developments as appropriate and in accordance with our regulatory responsibilities, as we have done this morning in respect of our Ghana project.

"Whilst operating in emerging markets does carry a higher risk of delays and disruption, is time consuming and involves a greater degree of frustration and bureaucracy, with perseverance and diligence the potential rewards are substantial and the strategy we are pursuing is, we believe, both ambitious and correct.

"Over the next few months and years we have an opportunity to achieve unprecedented growth from the prospects we are pursuing, and the Board and I remain committed to delivering on this potential."

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 & Joint Broker)
Stuart Gledhill	020 3470 0470
Caroline Rowe
SVS Securities PLC (Joint Broker)
Elliot Hance	020 3700 0100
Walbrook (Investor Relations)
Tom Cooper	020 7933 8780
Paul Vann	0797 122 1972
	[e-mail]

Notes:

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

Westminster's principal activity is the design, supply and ongoing support of advanced technology security solutions, encompassing a wide range of surveillance, detection, tracking and interception technologies and the provision of long-term managed services contracts such as the management and running of complete security services and solutions in airports, ports and other such facilities together with the provision of manpower, consultancy and training services. The majority of its customer base, by value, comprises governments and government agencies, non-governmental organisations (NGO's) and blue-chip commercial organisations.

 

END

 

 

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