Westminster Group PLC (LON:WSG) has received a letter of intent (LoI) from a Middle East airport authority relating to a long term security contract.
The LoI relates to the memorandum of understanding (MoU) signed by Westminster’s aviation subsidiary, Westminster Aviation Security Services (WASS), with a Middle East civil aviation authority back in March of this year. It is one of seven MoUs signed this year with the supplier of managed services and technology based security solutions.
WASS completed a gap analysis of the airport after which the aviation authority agreed in principle to engage WASS to provide long-term security services.
Under the draft terms of the contract WASS would generate revenues in excess of £30mln per annum based on the current PAX (passenger) throughput and the currently anticipated fee per passenger.
This project represents a major growth opportunity for Westminster, and is also significant for the United Kingdom and consequently Westminster is working closely with the UK government, as it has its own specific hurdles to overcome prior to contract finalisation, Westminster said.
The company is in discussions with potential specialist financing partners regarding supporting the deployment of this large incremental opportunity, it revealed.
"Whilst the last couple of years have been a challenging period for our group, Westminster has continued to expand its international presence and to advance its large scale project opportunities with a particular focus on airport security, which has the potential to transform the business. This Letter of Intent is an example of such a project,” said Peter Fowler, chief executive of Westminster Group.
"While there can be no certainty as to the timing or final outcome of contract discussions, the receipt of this Letter of Intent is an encouraging step and demonstrates the progress that we have made to date. This, and progress on other long term contract discussions, gives us confidence that our strategy will deliver more positive results in the future," he added.
The shares soared from 5.5p overnight to 9.35p in early deals before coming off the top a little at 8p - a rise of 45%.
As previously announced, the company’s future financing plans may entail a restructure of the share capital to rebase the nominal value of the shares. Such a move would require the approval of shareholders; Westminster now believes those proposals can be put to the vote at the annual general meeting at the end of June, thus saving the expense of calling a separate general meeting.