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LONDON (Alliance News) - Westminster Group PLC on Thursday said it was undertaking a strategic review of its businesses and will need additional near term financing, as delays continued its Americas consultancy project and the group is still waiting to commerce repairs on its Sierra Queen ferry.
The group said it was exploring a number of potential financing options, which include directors' support and investment by strategic investors, as well as finalising plans for a capital reconstruction which will reduce its nominal share capital to 1.0 pence.
Westminster said this was due to its share price recently trading around or below its nominal share price of 10p. On Thursday morning, shares were down 22% at 7.51p.
Westminster said its average earnings before interest, tax, depreciation and amortisation loss was around GBP40,000 per month in 2016 to date, although this was a slight improvement from the implied GBP155,000 loss for the first six months of 2015.
The group noted its Americas consultancy project had continued to be hit by delays in funding from the government concerned, which has been affected by the significant drop in oil price. As such, it said it is now unlikely that material revenue will be recognised by the end of 2016.
Westminster added its much smaller US bridge project has also commenced, although said the project is also facing delays and said it has "no clarity in relation to the expected timescales to completion of this project".
Its ferry project continues to be delayed, as repairs cannot commence on its Sierra Queen ferry until the slip is vacated by the vessel currently occupying it.
Last month, the Sierra Queen sustained damage from an uncharted submerged obstacle while transiting between terminals in Sierra Leone. Westminster Group said at the time that repairs were unable to be carried out while the vessel was still in the water, but that the slip would be vacated within 7 to 10 days, following which repairs could be commenced.
Later in April, Westminster Group said the slip was still occupied by the other vessel but that repairs on that vessel would be completed that week, providing the Sierra Queen with access to begin its own repairs.
However, on Thursday, the company said the vessel was still in the slip, but added its Sierra Princess vessel is en route to Sierra Leone, which it said will provide "greater resilience against such delays in future".
Mitigating the impact of these delays slightly is the increasing passenger footfall as the recovery from the Ebola virus continues and said passenger numbers in the first four months of 2016 are 83% higher than the same period last year. "May numbers so far would indicate that this positive trend continues," Westminster said.
The company added that interest in its security technology remained "strong" during the first four months of 2016, and said it has signed a memorandum of understanding for a 25 year airport security programme for an unnamed international airport in the Middle East.
"The last couple of years have been a challenging period for our group with the Ebola crisis lasting longer and becoming more destructive than anyone had anticipated, coupled with the delays in the commencement of our ferry project in Sierra Leone, and the significant drop in oil prices having a knock on delaying factor with several of our key project opportunities," said Chief Executrix Peter Fowler.
"Whilst many of the issues faced have been beyond the company's control, we have taken a critical look at our operations, learned lessons with the benefit of hindsight, and are therefore undertaking a strategic review of our business to streamline operations and to ensure maximum shareholder benefit is achieved from the numerous large scale, long term and high margin opportunities we are developing and which we remain excited about," Fowler added.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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