FWIW21 Apr 2019 06:37
Trying to oust the board and special resolutions is a waste of time and energy. This is Peter Fowler's business, he has built up relationships with a dozen different countries over the past 4/5 years, negotiated contracts, has implemented one recurring revenue contract and seems v close to implementing one in Africa and one in Iran. Familiarity with the clients, the individual rapport that develops, understanding their particular needs and way of doing business are key to contract closure. Trying to replace management would be a very expensive and destructive waste of time, I will not back it.
I completely understand how the time it has taken is v frustrating. This share is retail led, it requires positive sentiment for the SP to do well. The failure to land one of the two much touted recurring revenue contracts is grinding investors down, slowly killing their belief in the company and has led to a slow decline in the SP from the end of January update. There have been v low trading volumes, just a drip drip of sells out weighing buys in the market. The lack of material progress has fuelled the knockers' mandate which hasn't helped things.
However, what has changed since the last update?.......Nothing has changed, everything is still in play. If the contracts were not viable they would have to inform the market, those are the rules. I don't believe management or the BOD are dishonest and fraudulent . We know from the AGM last year and from repeated RNSs that there are many irons in the fire, not just Iran and the African contract. This time last year the $4.5 million contract was landed. This had been negotiated in the background for years....it wasn't even one of the MOUs!
We know that last years numbers produced a record revenue and they will hopefully be EBITDA positive for the second half. We know that they had about £1.2 million in cash at the end of January, a very healthy position for WSG. We know that $1.2-1.5 million of the tech contract will land in 2019 books, we know that SL is producing record numbers (they are still getting good numbers through the airport). 2019 numbers are already looking OK before any new substantial business lands.
New business:
1/. Numerous small contracts have been announced on their website, one for £300k and one for £200k stand out, perhaps worth £750-1 million between them all. What is interesting and encouraging is their geographical spread and variety.
2/. Last years results showed a huge increase in training contracts, a real emphasis here. We know the income and margins on these are modest but they provide a great contact point into new potential contracts. An excellent foot in the door.
3/. We know that they have taken on a number of new staff in sales and training who are experienced world wide.You don't do this if sales are shrinking.
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