Westminster Group results don’t inspire confidence

AIM-listed security solutions firm Westminster Group (LON:WSG) saw its shares fall by 22.26% to 8.94p (as of 14:30 BST) after operations at airports and training provision were disrupted by COVID-19. Revenues for the year ended 31st December were up by 63% and the company booked an EBITDA profit for the period, but certain activities have been heavily disrupted since the start of the second quarter of 2020.

CEO Peter Fowler commented: “Both the Managed Services and Technology divisions delivered an impressive performance during the year, both financially and operationally. Financially our Managed Services Division achieved a 50% increase in revenues to £5.5m (2018: £3.7m) whilst our Technology Division achieved an impressive 80% increase in revenues to £5.4m (2018: £3.0m). Operationally both Divisions had a busy year and made excellent progress on a number of fronts.

“2020 has started on an equally positive note, building on the success of 2019 with both order intake and revenues ahead of budget. Q1 delivered revenues of over £4.5m, an increase of more than 22% over the same period in 2019 (Q1 2019: £3.7m), and I am pleased to report our management accounts show we made a healthy profit of several hundred thousand GBP in the quarter at both pre and post-tax levels as we begin to benefit from new contracts and the investment we have been making in our business over the years.

“The current Coronavirus (COVID-19) pandemic, in addition to the tragic loss of life, is of course having a profound impact on the global economy and businesses across the globe. As a company operating globally the pandemic has affected parts of our business in various ways. The business model we have been developing is based on multiple revenue streams, many of which are from long term or recurring contracts, from diverse sources in varying parts of the world and this has proved invaluable during the current pandemic. Whilst some parts of our business have been adversely affected and others have seen little impact, some have experienced significant growth, particularly our sales of fever screening and safety solutions.

“We entered 2020 with visibility of over £8m of annual recurring revenue for the year from long term managed services, guarding and maintenance contracts and because of the nature of our long term contracts, where we have experienced reductions in such revenue streams during the COVID-19 disruption these are expected to resume quickly once the pandemic passes. We not only have more large-scale project opportunities under discussions than ever before but in view of the COVID-19 situation we continue to expand our online and non-contact sales opportunities and are developing new opportunities as our business model evolves”.