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Westminster Group regaining momentum as Ebola crisis recedes

Published: 09:56 30 Jun 2015 BST

ferry
The Sierra Queen arrived in Sierra Leone in April and was launched at a grand ceremony in June

Security solutions provider Westminster Group’s (LON:WSG) West African airport operations are making a positive contribution again as the effects of the Ebola virus crisis recede.

In a trading statement issued ahead of the company’s annual general meeting (AGM), the company said its expects revenues from its Technology division in the first half of 2015 will be up year-on-year, but the Managed Services division, which has been hit by the Ebola crisis, will see a year-on-year decline in revenues.

In aggregate, group revenues in the first half of 2015 are set to be down a tad on the corresponding period of 2014, but thanks to prompt action to cut costs following the outbreak of the Ebola virus in July of last year, the group’s operating loss will be about the same as it was in the first half of last year.

The revealed it would have more or less broken even but for the effects of the Ebola crisis, and happily there are signs that travel to and from the regions most affected by the virus outbreak is increasing, which bodes well for Westminster’s West African airport operations in the second half of the year.

The remainder of 2015 will also see revenues lifted by the commencement of the group’s ferry operations, which are due to start in July, following the grand launch of the firm’s Sierra Queen vessel (pictured) earlier this month.

Westminster said that screening of freight remains a significant commercial opportunity for the group when the Ebola crisis abates, while the Managed Services airport pipeline has bulked up substantially compared to the same stage of last year.

Clearly, the Technology division has been the star of the show so far in 2015, with product orders in the first half of 2015 totalling more than £1.5mln, versus £600,000 or so in the same period of 2014.

In addition to the previously announced Technology division order book, the division is seeking to advance several very large prospects, and although the company is not counting its chickens, it believes the interest shown by prospective clients is “highly indicative” of the interest its offerings are generating.

The aim for the rest of the year is for the Technology division to deliver a large part of the order backlog and win further new large deals, while growing the run rate of the business.

On the Managed Services side, the company hopes to a sign a further airport contract in the second half of the year and to progress the sales pipeline.

“We are pleased to report that a combination of improving passenger numbers and a lower cost base has seen the airport contract resume delivering a positive contribution to the group in the last few months of this year,” the company’s AGM trading update revealed.

“This excludes the impact of Kenya Airways resumption of flights at the start of June and today's scheduled resumption by Air France. We have been informed that new and existing operators are looking at commencing services into the region during the summer of 2015,” the company added.

Shares in Westminster were outperforming the market in mid-morning trading, down 0.9% at 23.54p.

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