Global security and services provider Westminster Group PLC (LON:WSG) suffered its share of slings and arrows last year but 2016 is looking much brighter.
The group, which received a boost last week as institutional investors gave strong backing to a fund-raising, revealed it is now close to breaking even at the underlying earnings (EBITDA) level, as its airport security operations benefit from a recovery in passenger traffic in West Africa now that the Ebola crisis is a receding memory.
The first four months of 2016 saw a continuing improvement in the profitability and cash generation of the aviation division, which was loss making in the same period in 2015 due to the Ebola crisis.
Revenues in the company's airport security operation have increased by over 85% this year as traffic has returned, Westminster revealed, and this, in conjunction with efficiency measures implemented last year has led to a “very significant improvement in the EBITDA performance” of the group as compared to the same period in 2015.
Looking in the rear-view mirror, revenues in 2015 ebbed a little to £3.36mln from £3.49mln the year before, with the Technology division a bright spot, as it contributed £1.7mln to the top-line, up from £1.2mlm the year before.
Things were tougher for the Managed Services division, which comprises the airport security business and the nascent ferry services operations.
The Ebola outbreak, which started in 2014, lasted longer than anyone expected, with passenger volumes only starting to return towards more normal levels in the second half of the year, while the launch of the ferry service was beset by technical difficulties. The division’s revenues fell to £1.7mln from £2.3mln the year before.
Loss before interest, tax, depreciation and amortisation narrowed substantially to £436,000 in 2015 from £1.59mln the previous year, while the loss before tax shrank to £1.99mln from £2.44mln.
"Our 2015 results and achievements reflect not only the continuing challenges we faced, such as the ongoing Ebola crisis, ferry delays, and the oil price collapse, but also the measures we implemented to deal with them and move our business forward,” said Peter Fowler, chief executive of Westminster Group.
"Following two years of dealing with and overcoming a range of challenging issues, I believe we are now emerging leaner, stronger, and as a result of the strategic review we are undertaking, better structured to ensure maximum shareholder benefit is achieved from the numerous large scale, long term and high margin Managed Services opportunities we are developing. These Managed Services opportunities are now a key focus of our business and we remain excited about our future growth prospects," Fowler said.
Fowler revealed that its airport security business is recovering strongly in 2016 and the group is hopeful that pre-Ebola levels of traffic will be reached before the end of the year.
Recent months have seen a string of announcements relating to memoranda of understanding being signed by the airport security business, including a recently signed letter of intent for a potential airport project worth around £30mln a year, but one potential agreement concerning an East African project has remained on hiatus as a result of unrelated political issues; the company revealed in its results statement that these issues have now been largely resolved and negotiations have resumed.
The Technology division won a number of contracts during 2015 but the slump in global oil prices meant that a number of projects were delayed. In view of this the group has been exploring alternative project funding solutions, such as support from UK Export Finance, while a number of clients have expressed interest in a scheme whereby they could pay for Westminster’s services in product, such as oil.