Westminster (LON:WSG)
Visited the Westminster group stand at the investor show and had intresting chat with the operations director about their key driver of growth, airport security.
Basically they are looking to expand in poorer countries which donot have the expertise or money to bring their airports upto european standards, which means that many airlines will not fly there.
WSG model overcomes these problems
a) by providing the financing and training
b) by removing the costs from goverment
c) brings airport upto european standard security
d) opens new markets for airlines, generating local growth
so who pays?, the airlines on a straight forward per passenger basis
payment terms 30 days, average actual collection 35 days (sierre leon $38, will vary by airport)
my concerns were political risks, as they put it, yes the son of the president of xx could try and take over the business locally, but wsg walks away, the kits swiched off, no airlines fly there, bad for business all round.
So its expensive to set up, yes in country with no security infrastructure, but many countries have the kit, but not the expertise or training, so still don't get approvals. WSG basically can take its model to many airports, and in some cases benefit from the kit in place. Overtime its expat experts hand over to local trained staff and move on to next airport, increasing margins. contracts are typically long term, 15 years was mentioned.
Personnally i'm nervous about some of the african countries, after all people don't really enjoy going to countries fighting each other (internally or externally), however its a big country with massive resources and oppurtunites, WSG model might help to bring stability (my personal view) through self intrest.
I've never been great on fundemental analysis, like oppurtunites so please do your own research, for clarity i do have a small holding in wsg.




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