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Two weeks into 2011, two new contracts for Westminster Group

Westminster Group (LON:WSG) has won more new business, with a US$645,000 contract with a new governmental client in the Far East. Investors liked the news and sent the stock up 15 percent in morning deals.

It will provide the new client with a sophisticated countermeasures system. The contract will be delivered in the first half of 2011.

The deal follows the firms largest ever single contract, which it secured last week. The multi-million dollar deal will see Westminster sell mobile surveillance systems to a government client.

"I am delighted to be able to announce this latest contract award which is not only significant in terms of revenue but also future business potential,” chief executive Peter Fowler said.

“This is yet another new governmental client to Westminster and further contract awards are likely to follow successful implementation.

"I am particularly pleased to be able to announce this new contract award so soon after our previous contract announcement which means we are now entering the 2011 trading year with our largest ever secured order book and a healthy enquiry flow.”

The stock has been under pressure for some time but crucially it appears to be delivering on the promises made to investors in the wake of December’s profit warning.

The security specialist had previously warned that it expects to make an operating loss of £2 million in 2010, as a result of contract delays.

Speaking with Proactive Investors in December, finance director Nicholas Mearing Smith emphasised that it was merely a timing problem and that, provided they are completed, the delayed contracts could ultimately prove to be business transforming.

Indeed the new year has already seen new contracts rolling in.

Westminster’s interests span from fire alarms to flak jackets and site protection. The group’s major customers are governments, who have been re-assessing their spending priorities in recent months, which has in turn has led to delays in winning new business. 

However in December Mearing Smith told Proactive Investors that most deals in its pipeline are with governments in the Middle East - where cash rich states have not had the same budgetary concerns of the western economies.