The Ebola crisis in West Africa cast a shadow over Westminster Group's (LON:WSG) 2014 results, but 2015 has seen the security firm regain momentum.
Westminster, which has a charitable foundation that is running an Ebola crisis appeal, said passenger volumes in West Africa are beginning to recover as airlines resume flights.
The crisis inevitably affected the top line in 2014, with revenue declining to £3.5mln from £7.4mln in 2013.
The Technology arm recorded revenues of £1.2mln, down from £4.4mln the year before, but the group noted that the division secured orders of around US$7mln that could not be delivered during the year; these contract wins provide better visibility into future performance.
The Managed Service division got off to a strong start to the year before the Ebola crisis dramatically disrupted the airport security business, as passenger volumes – and therefore ticket-derived revenues – reduced by 70%.
Group operating and administrative costs were lower at £4.3mln in 2014 than in 2013 (£5.1mln), as the company responded to the reduced revenues, but Westminster has been at pains to ensure it kept employment levels steady in West Africa, as the last thing the communities needed at the height of the crisis was fear over employment prospects.
In the context of all the above, a deeper loss before tax of £2.44mln versus 2013's loss of £1.99mln is not surprising and with the gross margin improving significantly to 56% from 42%, the company is well-placed to bounce back as revenues recover.
The current year has been characterised by a succession of contract wins, with the Technology division securing around US$2.4mln of orders in the first four months of 2014, including a US$0.96mln contract to help secure an iconic bridge in the USA, while the Managed Services division signed a memorandum of understanding with a government-owned Asian airport authority in February to provide long term security services to their international airports serving in excess of 2 million passengers annually.
Meanwhile, the branch-out into ferry services is going well, with the group's flagship vessel, the Sierra Queen, which is capable of carrying 200 passengers, now in Sierra Leone where it will be delivering revenues for the group later this year.
“2014 was a year defined largely by the Ebola crisis and our struggles to contain it,” said Peter Fowler.
“2015 by contrast, given the progress during 2014 and the momentum our business is now experiencing, gives me and the board cause for optimism and we remain excited about our future growth prospects,” he added.