Westminster Group Regulatory News (WSG)

10 December 2014

Westminster Group Plc:

Fundraising of £1 million

Westminster Group Plc ('Westminster', the 'Group' or the 'Company'), the AIM listed supplier of managed services and technology based security solutions to governments and government agencies, non-governmental organisations (NGO's) and blue chip commercial organisations worldwide, is pleased to announce the issue of 3,848,000 new ordinary shares of 10p each to raise gross proceeds of £1 million (the 'New Issue').

The aggregate New Issue comprises -

· A placing to institutional and other investors conducted by SP Angel Corporate Finance LLP to raise £843,250 (before expenses) by the issuance of 3,373,000 new ordinary shares of 10p each (the 'Placing Shares'), at a price of 25p per share (the 'Placing Price') (the 'Placing'). The Placing Shares represent approximately 6 per cent. of the enlarged issued share capital of the Company.

· The Placing Shares include 128,000 new ordinary shares that have been placed with Directors of the Company further details of which are set out below.

· A draw down on the Company's Equity Financing Facility ('EFF') with Darwin Strategic Limited to raise gross proceeds of £156,750. This was achieved by the issue of 475,000 new ordinary shares of 10p each being issued at a price of 33p per share ('EFF Shares').

The proceeds of the New Issue will primarily be used to support the acquisition of initial ferry craft and the development of infrastructure in relation to the 21 year concession and lease agreement with a government in West Africa for the management and operation of a number of ferry terminals, together with the provision of a sea ferry transfer service as announced on 19 November 2014. The remaining funds will be used to provide working capital for the Group.

Cash flow update:

The Company's Technology Division has recently secured a US$4.4m contract to provide an extensive security consultancy project in the Americas (which could lead to both further long term Managed Services projects and additional Technology based contracts). The project will be undertaken and completed in stages during 2015, with revenues being recognised as work is completed and milestones achieved, with cash receipts in advance of work being done treated as deferred income. Such contracts can typically have attractive cash and margin attributes and the Company expects it to have a positive impact on 2015's performance. The first receipts of cash are expected in Q1 2015.

Planning for the Ferry and Terminals contract, as referred above, is well underway and works to prepare the terminals and structure the business are already in progress. In addition, dedicated and highly experienced resources are now on board. This project is expected to go live in Q1 2015 once ferry craft arrive in-country. The ferry service will generate cash as soon as passenger services commence. It is expected to deliver profit contribution in the first 12 months of operation and furthermore is also expected to benefit from favourable working capital dynamics.

The recent contract wins announced in the last few weeks, when combined with the existing order book and run rate business, has given the Company much improved visibility over expected 2015 revenues. Furthermore we have received the first franchisee fees from our new partner in Mexico.

The resolution of the CTAC negotiation is agreed in principle with a favourable outcome resulting for Westminster. The settlement is due within H1 2015.

At the Interim Results in September 2014, we referred to a cost reduction program (including board and advisory costs) which would take approximately 15% off our overhead cost base. The Company now expects to exceed this cost saving target (with the full effect being felt in Q1 2015) and, despite the recent sales progress, strict cost controls remain in place.

The Board of Westminster is confident that it has fully considered the cash flow position of the Group and its near term needs.

Commenting on the New Issue, Peter Fowler, Chief Executive of Westminster Group said:

"During this growth phase of our business we continue to look at diverse funding options which are in the best interests of the Company and its shareholders. This share issue was considered the best way to expedite the recently won contracts with a view to ensuring cash contribution to the Group at the earliest opportunity. Debt funding, such as asset based lending or bank facilities, remain a potential route to support capital expenditure requirements for future projects and should become increasingly relevant as the Group's cash flow profile matures and contract base expands.

"Whilst this placing was not open to all shareholders we are cognisant that existing private shareholders would like the opportunity to participate in funding issues and we are currently investigating innovative ways in which all investors may participate in any future issues."

Operational Update:

The Technology Division continues to win and deliver a wide range of solutions to clients around the world and is currently progressing several multi GBP million contract opportunities, including opportunities for consultancy, solutions and product sales. The pipeline trials in the Americas, as announced in August, have been completed successfully and further discussions with the client are being held. We expect a positive outcome. Whilst, as ever in any sales situation, particularly where governments are involved, there is no such thing as absolute certainty as to timing or outcome, the Company is optimistic about this divisions prospects.

In addition to the 21 year ferry contract, the Managed Services division continues to gain further customer interest across several continents and, within our extensive and growing pipeline of long term managed services prospects, there are several potential airport projects with an aggregate of c3.8m embarking passengers per annum which continue to progress through the relevant governmental processes.

On Operations, Peter Fowler added:

"I am both proud and encouraged by the momentum of our two divisions. Both Managed Services and Technology demonstrate through their recently announced contracts, the geographical spread, product range and growth potential that our business model offers. The funding announced today will assist us achieve our aim of generating long term, profitable revenue and enhanced shareholder value."

Admission

The Placing Shares and the EFF Shares are being issued under existing authorities to issue and allot shares in the Company. Application will be made for the Placing Shares and the EFF Shares to be admitted to trading on AIM. It is expected that admission will become effective and that trading in the Placing Shares and the EFF Shares will commence on or around 16 December 2014 ('Admission').

Director Participation in Placing

Sir Malcolm Ross (Chairman), Sir Michael Pakenham (Non-Executive Director), Matthew Wood (Non-Executive Director) and Roger Worrall (Commercial Director) have agreed to subscribe for an aggregate of 128,000 Placing Shares as detailed in the table below:

* including shares held by Mrs. P. J. Fowler

Total Voting Rights

The Placing Shares and EFF Shares will rank pari passu with the existing shares of the Company. The rights attaching to the Placing Shares and EFF Shares, including as to voting, are the same as those of the existing Ordinary Shares. Following these issues, the total issued share capital of the Company consists of 55,145,412 Ordinary Shares of 10p each with voting rights. The Company does not hold any ordinary shares in treasury. Therefore, the total number of voting rights in the Company is 55,145,412 and this figure 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 in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

For further information please contact:

Notes:

Westminster Group plc is a leader in the supply of managed services and 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, encompassing a wide range of surveillance, detection, tracking and interception technologies and the provision of long term managed services contracts such as facilities management and running of complete security services and solutions in airports, ports and other such facilities together with the provision of manned services, 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. For further information please visit www.wsg-corporate.com