Westminster Group Plc ('Westminster', 'the Company' or 'the Group'), the AIM listed supplier of system solutions and products to the security, defence, fire protection and safety markets worldwide, is pleased to announce that on 30th April 2012 it issued and allotted 2,941,176 new ordinary shares of 10p each ("New Ordinary Shares") (representing approximately 9 per cent. of the enlarged issued share capital of the Company) at a price of 17p per share, to a new strategic investor who has significant interests in West Africa, raising £500,000 (the "Placing"). The net Placing proceeds will be used to fund major contract wins and for additional working capital purposes.
The Group has made significant progress in the last 12 months. It had a record year of order intake in 2011, resulting in revenues of c£10m for that year, representing growth of more than 260% compared to 2010. As a result of this, the Company was profitable at an operational level in the second half of that year as orders were delivered. Over the past year, the Group has secured three major multi-million pound contracts, each one larger than the previous one. This culminated in February 2012 when Westminster signed a contract with a West African country for the provision of complete airport security services over a period up to 15 years with a potential sales value in excess of $150m.
On 20th February 2012 Westminster announced that initial financing during the early stages of the airport contract would come from existing working capital resources. This has been the case and the Group is pleased to announce that the implementation phase of the contract commenced on 1st March 2012. During March and April, Westminster deployed an experienced team in-country and has been actively investing in building its infrastructure and in-country operations in preparation for commencement of live operations and therefore revenue generation on 1st May 2012.
New Strategic Investor
Westminster has previously announced that it was in discussions with potential strategic investors as part of its growth plans. The Directors believe that this strategy is a means of accelerating growth as these investors can bring added value to our operations as well as investment into the Company.
Westminster is pleased to report that this significant investment of £500,000 in the Group is being made by one of those strategic investors. The investor is now looking to assist with the delivery of many of the business opportunities in West Africa.
Airport Contract Update
Westminster is pleased to announce that the implementation phase of the contract is well advanced and the Group is now well placed for commencement of live operations on 1st May 2012.
Our initial revenue forecast for the West African airport contract was calculated and based on only 100,000 passengers during 2011, with modest passenger growth over the term of the contract. It did not allow for revenues from cargo scanning, additional services or fare increases throughout the entire contract period, all of which could be significant. Westminster has the contractual right to make such charges, as well as to provide services at all airports in the country. Recent data indicates that passenger numbers are now expected to be ahead of forecast and forward growth rates may be significantly ahead of previous estimates as the country of operations is forecasted to have one of the fastest GDP growth rates in the world, and has discovered large natural resource deposits including oil and iron ore. A new and enlarged terminal capable of accommodating up to 900,000 passengers per year is due to open later in 2012. Given all of the above, our initial aggregate $150m revenue forecast could be achieved by the contract's 8 year break point rather than the full contract term of 15 years. Should that be the case, the revenue potential for the full contract term would be substantial.
The Group plans to use elements of the Placing proceeds to ensure that the implementation is smooth and a quality solution is delivered to the customer. The Company confirms that previously referred to discussions with other airports for the provision of security solutions are still ongoing.
The Placing and Total Voting Rights
The Placing will raise gross proceeds of £500,000. The New Ordinary Shares under the Placing are being issued under existing authorities to issue and allot shares in the Company. Application will be made in relation to admission of these New Ordinary Shares to AIM and it is expected that dealings will commence on or around 4th May 2012 ("Admission").
The New Ordinary Shares will rank pari passu with the existing shares of the Company. Following this issue and allotment, the total issued share capital of the Company has increased to 32,571,934 ordinary shares with voting rights. The Company holds no shares in treasury, therefore the total number of voting rights in the Company is 32,571,934.
This figure of 32,571,934 ordinary shares 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 of their interest in, the share capital of the Company under the FSA's Disclosure and Transparency Rules.
Notice of Annual results
The Directors announce that the Company's annual results for the year ended 31 December 2011 will be announced on Thursday 31 May 2012.
For further information please see the Company's web site, www.wg-plc.com, or contact:
Westminster Group plc
Tel: 01295 756 300
Peter Fowler (Chief Executive)
Ian Selby (Chief Financial Officer)
Fairfax IS Plc (NOMAD + Broker)
Tel: 020 7598 5368
Stuart Gledhill/Katy Birkin
Winningtons Financial (Financial PR)
Tel: 020 3176 4722
Tom Cooper/Paul Vann
0797 122 1972
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. For further information please visit www.wg-plc.com
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