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Westminster Group reports another solid full-year performance

Specialist security company Westminster Group (AIM: WSG) said it has again produced another solid full-year performance with a significant increase in revenues and a broadening and expanding revenue base, in line with its strategic growth plans.

In the 2009 financial year, the company increased revenues by 45% year-on-year to £7.9m. In the twelve months ended 31 December, the company maintained a steady gross profit margin at 34.6% (FY08: 34.9%), and turned into profitability, posting an underlying profit of £217,000 compared to a £47,000 loss in the previous financial year.

During the financial year, Westminster has invested heavily in expanding its overseas operations, and it has continued to build its international presence and infrastructure. The company has focused heavily on this expansion, and now it has an international distribution network to over 45 countries, offering in-country representation, knowledge and support for its clients.

Through three primary operating subsidiaries - Westminster International, Longmoor Security and RM Integrated Solutions, the company made substantial progress throughout the full year, with a substantial increase in new business.

“Westminster has demonstrated its ability to deliver complex and innovative solutions in its target markets, across a broad range of projects and challenging environments”, Westminster Group chief executive Peter Fowler commented. ”Westminster’s reputation in these global markets is significantly enhanced with each contract delivered”.

Early in the financial year, in March 2009, Westminster was awarded a £1m contract for its newly developed ‘ThruPORT’ rapid deployment, high security scanning portals at airports in Iraq.  The contract was completed before year end.

ThruPORT is a complete self contained scanning product designed by Westminster, utilising a range of overt and covert scanning systems. The rapid-deployment unit is built within a specialised ISO shipping container which can be deployed worldwide. According to Westminster, the ThruPORT can be set up and fully operational within hours.

In April 2009, the company won a €2 million contract to supply and install advanced security across the river Nile, to protect the new Nagaa Hammadi Dam complex in Egypt. Westminster expects the contract to be completed in 2011. 

In Africa, Westminster agreed a £2.72m contract extension for the Juba International Airport project in Southern Sudan. The company was awarded the initial contract in 2008, and the extension relates to the provision of additional security fencing and perimeter detection systems, together with Under Vehicle Surveillance Systems (OTCPK:UVSS), Automatic Number Plate Recognition systems (ANPR) and Vehicle Control Barriers on entranceways and other equipment.

In Ethiopia, Westminster secured a new contract to provide of an integrated security system for the National Bank of Ethiopia headquarters, along with other bank buildings including the country’s mint. The sophisticated IP-Based CCTV installation will include multiple control rooms which simultaneously monitor and record movements 24/7 for security and safety of bank personnel.

Westminster also has a number of significant projects across the globe, with key contracts in the UK & Europe, and it is actively pursuing opportunities in the Asia Pacific region. For the latter region, it  notably signed a deal with Pentagon Protection (AIM: PPR) to become the exclusive agent and distributor for the Pentagon range of blast and solar reflective films and anchoring solutions.

In South America, the company has won a number of valuable smaller orders, and it is currently discussing several major enquiries. Westminster said it believes that the Americas could be a promising market, particularly with the recent launch of a Spanish version of its website.

Across the whole business, the company has won contracts in a broad range of fields within the security sector, including: Perimeter Intruder Detection, Bank Protection, Access Control, Control & Command, Blast Film Protection, Overt & Covert Scanning Equipment, Police Mobile Surveillance, Close Protection, Frequency Jamming Equipment, Explosive Detection Equipment and Fire Prevention.

On corporate level February’s acquisition and integration of the close protection and security consultancy, Longmoor Services Ltd, was one the year’s highlights. Longmoor’s management team has extensive security experience, gained in the Royal Military Police and UK Police forces.

The newly integrated operating subsidiary offers highly-regarded training courses, which have proved increasingly popular among its client base. Indeed, in January, Westminster reported that demand had reached unprecedented levels, and consequently the company expanded the scheduled number of course booking additional revenues in excess of £105,000.

In addition to its training courses, the company also provides its services through specialist protection contracts, a notable contract in the year included a contract to protect VIPs and celebrities attending the 2009 Eurovision Song Contest in Russia.

Most recently, last week, the expansive security firm added a fourth operating subsidiary with the acquisition of blue-chip security specialist CTAC, in a deal worth up to £1.8m. Concurrently, Westminster has placed 747,000 new ordinary shares at 33.5p to raise £250,245 before expenses to supplement working capital requirements – to three venture capital trusts which have agreed a three-year lock-in.

The newly acquired CTAC provides ‘high end’ security systems and services to a blue chip client base including Brinks, DeBeers LV and Seven Trent Water who operate in operationally critical, high value and high profile fields such as cash handling, bullion storage, jewellery and diamond merchants, chemical storage and utilities.

During the current financial year, Westminster has continued to make progress with strong momentum, with a series of new contracts – including a major contract with the UK Ministry of Justice (MoJ) and recently a US$200,000 deal to supply fever detection systems in North Africa.

Crucially, in response to the significant increase in enquiry levels and new orders since the group’s flotation group in 2007, in January, Westminster International appointed a dedicated sales director, appointed several other new agents and opened two new offices, in Abu Dhabi and Kuala Lumpur.

“We have made a good start to 2010, with significant contracts being won by all of our operating divisions, the acquisition of CTAC Limited announced last week, and the welcoming of three new institutional shareholders to our company through the recent equity placing”, Peter Fowler added.  

“We are confident of a solid performance for 2010 and exciting growth prospects beyond.”

Disclosure: The author holds no positions in the company