RE: Why is Iran so vital to WSG?16 Sep 2018 10:04
O&W,
Welcome.
The rise was in part link to the announcement of the signing of an MoU for managed services to an East African country.... the fall that followed was largely due to web E-bola outbreak in Sierra Leone where we operate the security screening. ( paid on a per passenger embarking basis). Hence the drop off in flights which followed as air carriers cancelled their routes to Lunghi had a debating effect on revenue. We are still recovering from that now,.. as new carriers are adding to and increasing services all of the time. That said,.. we are still waiting ( I believe) for BA to resume flights in to Lunghi.
We also had a disastrous forray into the Ferry business,... which in theory sounded very like a money spinner,... as the Ferry service would have given arriving passengers the choice of a 50min air-conditioned ferry journey to Freetown,.. as opposed to a three hour drive bus drive on poor roads. However, the implementation of the project was poor,.. with delay after delay and damage to the Ferry before and after sea-trials. In the end we never carried one fee-paying customer and we still have the Sierra Queen bobbing around costing us money. We excited the Ferry 'business' in September 17... probably having chalked up losses of circa £1.5M+
That doesn't on the face of it should like a huge amount of money,.. but to WSG it was crippling given the e-bola impact on the airport revenue. As such the Board had to raise money by issuing equity... this knocked confidence as the Board were continuously promising 'jam tomorrow'.. and of course resulted in dilution.
This weeks trading statement, due Friday, will make for very interesting reading.
Passenger growth at Lunghi has been steadily increasing since the lifting of the e-bola warning, and the Tech services division has one a large contract. In addition this will be the first 6month reported period where we have divested ourselves of the loss-making Ferry operations. So,.. will be very interesting as these are the operations that underpin the share price, ..... without any of the M/E Contracts.
Clearly if we exchange contracts on the M/E Contracts,.. then we are off. You may also want to consider that Peter Fowler's stated intention is to grow the company and then sell-out. The timescale was in a few years..., er.,.. a few years ago! But the importance of the long term contracts,..15yrs +... with recurring revenue.... would make the company very attractive IMHO.
Best.
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