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Westminster Group readies for screening surge as world seeks coronavirus solutions

This year has already a surge of enquiries from all around the globe

Westminster Group PLC -
Temperature checks and more set to become the norm

How to get airlines flying again without causing another spike in COVID-19 cases is proving a difficult nut to crack.

One solution widely touted is to introduce fever screening equipment at airports and that possibility has put some zip into AIM-listed Westminster Group PLC (LON:WSG).

“It’s our business,” says Peter Fowler, chief executive of the security and technology group.

 

 

Westminster says orders and enquiries have rocketed since it became clear a way of assessing passengers with potential Covid-19 symptoms is required for any sort of normality to return to flying.

Fowler adds the company has been here before and learnt from the experience.

Westminster has a long-running contract with an airport in a West African country to carry out security checks on passengers arriving and departing.

This operation took a hefty knock during the Ebola crisis in the region in 2014, but the company used what it learnt then to prepare for the Covid-19 pandemic, says Fowler.

“It’s not the first time we’ve dealt with a situation like this”, he says, adding Westminster put marketing and contingency plans in place in January once the scale of the pandemic started to become clear.

The company has been selling this type of equipment since the Ebola days, he adds, and is seen as a professional and dependable supplier.

The surge of interest came too late from the 2019 financial year, but revenues still rose

for a fourth successive year to £10.9mln, up 63% on the previous year.

This year, though, has started to see the benefit of the fever screening demand.

Revenues in the first three months of 2020 were 22% ahead of a year ago at £4.5mln and the company recorded what it described as healthy pre- and post-tax profits of several hundred thousand pounds.

But if coronavirus is here to stay for any length of time, this growth might be just the start of the opportunity for the group.

Fever screens to become a permanent feature

Fowler believes fever screening equipment will become a permanent feature not only at airports but in other places as well.

Enquiries about systems have come from organisations around the world such as schools, hospitals, businesses and even football clubs, he adds.

Westminster says the growth it is seeing it its technology arm, which houses the screening equipment sales operation, is offsetting the parts of the business where the virus had an adverse impact.

The business runs managed services operations in manned guarding of construction and other sites and a UK-based aviation training facility and these have been affected.

The company also still has the long term airport contract in West Africa.

Passenger numbers here were at record numbers before the pandemic, but have been affected by the actions taken across the continent to contain the spread of the virus, and in March flights were suspended for 90 days.

Even so, Fowler believes that recovery at airports in this part of the world will be quicker than elsewhere as traffic is generally either business-driven or diaspora visiting.

There is little of the tourist traffic that dominates airports in other parts of the world.

Fowler believes its performance during the current crisis illustrates the benefit of its multiple revenue streams.

A contract to provide container screening services at the Port of Tema in Ghana is also starting to ramp up, for example,

This is a US$1.5bn development, says Fowler.

Operations began in the middle of last year and Westminster and its partner get a fee for each container passing in and out of the port.

Two of the berths started up in 2019 and a third has just become operational with a fourth scheduled to come on stream later this year.

Revenues are growing and COVID-19 has had little impact on this side of the business.

When complete, it will expand the port's capacity from around one million Twenty-foot Equivalent Units (TEU) a year to over 3.5mln a year.

“We entered 2020 with visibility of over £8m of annual recurring revenue for the year from long term managed services, guarding and maintenance contracts” said Fowler.

Longer-term, Westminster also has an infrastructure joint venture in Saudi Arabia with Hazar International and an aviation training arrangement with Gulf Aviation Academy.

At a share price of 8.25p currently, Westminster is valued at around £13.6mln. which seems to pay little regard to the potential in the short-term for fever screen equipment let alone the ongoing business and longer-term possibilities.

Of course, Westminster still has to execute, but Fowler is confident and says the share price will catch up in due course.

There are no crystal balls, but he remains very positive about the year.

Quick facts: Westminster Group PLC

Price: 10.5 GBX

AIM:WSG
Market: AIM
Market Cap: £16.66 m
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Westminster Group CEO hails multiple revenue stream model as fever screen...

Westminster Group PLC’s (LON:WSG) CEO Peter Fowler said it is seeing unprecedented demand for fever screening equipment due to the impact of coronavirus (Covid-19). The interest is offsetting the impact of coronavirus on its managed services businesses and Fowler expects the growth seen in...

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