Westminster Group confident of strong bounce-back in 2022 as activity levels continue to recover


Westminster Group PLC (AIM:WSG, FRA:3W5) (AIM:WSG) is seeing recovery in its operations after the disruption caused by the pandemic.

Hot on the heels of a slew of contract wins announced since June, the supplier of managed services and technology-based security solutions released half-year results that showed revenue rose to GBP3.5mln from GBP3.0mln in the preceding six-month period.

Reflecting the uncertainty caused by the pandemic in its target markets, revenue was lower than the GBP7.0mln recorded in the first half of 2020, when the group was enjoying record revenues before the lockdowns kicked in.

Activity is picking up in Westminster’s Services division and the group’s West African Airport managed services operation continues to trade ahead of management’s expectations – by June traffic was back up to 70% of pre-COVID-19 levels and recovering faster than the average African and European airport – while Westminster’s port managed services operations in Ghana have not been materially affected by the pandemic.

The guarding and training businesses have been heavily affected by lockdowns and travel restrictions but both businesses are bouncing back as travel restrictions ease.

The Technology division continues to experience healthy enquiry levels and during the reporting period secured orders from more than 40 countries.

The cautious approach to spending by potential customers that was evident in the second half of 2020 continued into the first half of 2021, resulting in purchasing decisions being deferred on some of Westminster’s larger technology project opportunities but discussions on many of these prospects have now recommenced and could land at any time, Westminster said.

In the six months to the end of June, the group generated a gross profit of GBP1.6mln, down from GBP2.8mln the year before, with the gross margin improving to 45% from 40% thanks to the increase in high-margin managed service sales in the first half of 2021.

The underlying loss (EBITDA) was GBP810,000 compared to a first-half profit of GBP236,000 last year.

The group, which is essentially debt-free, ended June with GBP3.1mln in cash, up from GBP1.6mln a year earlier.

The group acknowledged that there is still global uncertainty and delays may still affect the delivery of certain projects in the short term but provided the world emerges from lockdown much as expected Westminster is on track to meet full-year expectations.

“In our 2020 annual report we stated the outlook for 2021 was looking positive and this remains the case,” said Peter Fowler, the chief executive officer of Westminster Group.

“Not only are we seeing recovery and growth in our existing operations, but we are developing new initiatives and revenue streams, such as the COVID-19 testing programme, and in recent weeks and months we have announced several significant new large-scale, long-term contract wins that will produce a several million-pound step change in our annual revenues, together all underpinning confidence in our business model and growth trajectory.

“H1 [first-half] revenues are 16% ahead of the second half of 2020 (GBP3.0mln) demonstrating recovery is underway and we believe that providing the expected easing of restrictions and the resultant recovery continues, together with the recently secured contracts and our strong pipeline we are on track to deliver a strong performance for 2021 and we are confident in our future forecasts,” Fowler said.


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