AIM quoted Westminster (LON:WSG) is poised to take on a 20 year border security project in the Middle East, it said, as it revealed encouraging trading so far in 2016 and a new loan deal to fund its pipeline of commercial activities.
The group's technology business inked a memorandum of understanding (MoU) for the Middle East project, which is at a major and very busy transit point between two countries.
Westminster would provide equipment, training and ongoing maintenance of security screening checkpoints and generate revenue from a security charge on vehicles and containers passing through the crossing.
The group is now undertaking analysis and a feasibility study prior to finalising contract negotiations.
Peter Fowler, Westminster's chief executive, said: "I am delighted to announce this latest development for our Technology Division which follows several important long term (typically 15 - 25 year) project MoU's signed by our Managed Services Division in the last few months and shows the momentum we are achieving in establishing long term, recurring revenue projects in various regions of the world."
Separately, the firm said 2015 revenues are expected to be around £3.4mln, with sales as the technology division higher overall due to larger product sales in the first quarter of the year whilst Managed Services revenues were lower than 2014 due to the impact of the Ebola crisis.
The firm reduced costs across the group in 2015 and continues to review options. Non-depreciation ongoing costs have now been cut by more than 25% since before Ebola.
Operating results are expected to be materially better than in 2014.
For 2016 so far, Westminster said increasing passenger volumes at the airport operations as the recovery form Ebola continues together with contribution from the Technology Division have produced a much improved overall result.
It traded at overall near break-even EBITDA in the month, while operating costs were around £0.27mln, reflecting further reductions which are now beginning to be come through, it revealed.
The firm added: "The group continues to target achieving cash break even during 2016 based on improving airport numbers, the ferry becoming operational and the contract book and run rate orders from the Technology Division with all new contract wins and revenue streams being incremental."
Updating on the Sierra Leone ferry service, it said following sea trials the vessel is close to being operational, although the delay to starting the service originally envisage for July last year, have meant significant lost revenues, it said.
Westminster believes, before Ebola, the annual addressable market to be more than US$9mln, so this has materially impacted the business.
On February 19, the firm inked a subscription for a further 19 Convertible Unsecured Loan Notes (CULN) with Darwin Strategic with a value of £475,000 to fund development of its pipeline of commercial activities, it added.
The CULN has a zero coupon and consists of 19 individual notes with a par value of £25,000 each.
The notes can be converted to Westminster shares at 90% of the then ruling market price, or may be repaid by Westminster at 102.5% of face value, it said.
Westminster shares gained 3.28% to stand at 15.75p.