REG - Westminster Group - Final Results & Investor Presentation
29/04/2022 07:00
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RNS Number : 7621J Westminster Group PLC 29 April 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
EU REGULATION 596/2014
Westminster Group Plc
('Westminster', the 'Group' or the 'Company')
Final Results for 12 months to 31 December 2021
& Investor Presentation
Westminster Group Plc (AIM: WSG), a leading supplier of managed services and
technology-based security solutions worldwide, announces Final Results for the
12 months ending 31 December 2021.
Highlights
Operational:
· Continued to navigate Covid-19 pandemic successfully despite
declining market confidence and delays of Technology Division's projects.
· Services Division delivered a robust performance.
· Recognised for excellence in International Trade with a Queen's
Award for Enterprise.
· Supplied products and solutions to 60 (2020: 78) countries across
the world.
· Secured prestigious contract for the Tower of London.
· Entered strategic partnership with Covid-19 testing company,
Certific.
· Secured 20-year managed services contract for airport security in
DRC (subject to ratification).
· Secured 10-year managed services contract for port security in
West Africa.
· Secured $1.7m airport security contract in Southeast Africa.
· Kept all our employees safe during Covid-19 and maintained full
employment utilising the UK Government furlough scheme, where appropriate.
Financial:
· Despite continuing material impact from the effects of Covid-19,
achieved revenues of £7.1m (2020: £9.9m).
· Loss after tax £1.9m (2020: loss of £0.7m).
· Total Equity / Net Assets increased from £7.1m in 2020 to £7.5m
in 2021.
· Commenced year debt free and remained so (other than operating
lease debt under IFRS 16).
· Reduction in capital approved and implemented.
Post period End:
· West African airport ahead of expectations and nearing
pre-pandemic revenue levels, with March 2022 being the highest ever March
figure.
· Ghana Port performing to expectations and with the fourth berth
opened late 2021, further growth is expected.
· Training & Guarding businesses recovering well and winning
new business.
· Product and solution sales showing signs of significant
improvement, with several delayed projects once again back in discussion.
· Successfully completed Palace of Westminster project (now in 5
year maintenance programme).
· Westminster Arabia finally established we fully expect to see KSA
provide a material contribution to our 2022 and future revenues.
· $1.7m airport security contract secured December 2021 underway
and expected to be completed in the year.
· Continue to work on DRC ratification process, expected to be
completed by Q4 2022
· The logistics, licencing and planning phase of our new 10 year
West African port project secured in 2021 is nearing completion and the
operational phase is expected to begin in H2 2022.
· Closely monitoring US Iranian talks regarding JCPOA.
Commenting, Peter Fowler, Chief Executive of Westminster, said:
"The defining aspect of 2021 was, of course, the ongoing global impact of the
Covid-19 pandemic, whilst one of the main highlights of the year was the
prestigious Queen's Award for Enterprise in recognition of Westminster's
outstanding contribution to International Trade, which recognised
Westminster's many achievements, particularly given the challenges presented
by the global pandemic.
"Despite parts of our business being adversely impacted by lockdowns and
travel restrictions, the strength of our business model, with multiple revenue
streams from multiple sources around the world, together with our global
footprint has meant that we were better placed than many companies to deal
with the numerous challenges created by the Covid-19 pandemic.
"I am proud of how our staff have pulled together and how we have managed to
navigate the crisis. We have continued to keep our people safe, fully employed
(utilising the UK government's furlough scheme where appropriate) and
maintained our global operations, albeit some on reduced levels.
"We continued to deliver on business opportunities and, in 2021, we supplied
goods and services to 60 countries around the world, including some notable
contract wins. We have continued to invest in our worldwide business
development programmes in order to deliver on our growth potential,
particularly in our long-term major managed services projects.
"I am pleased to report therefore that, the outlook for 2022 is looking
positive as the worst impact of the global Covid-19 pandemic recedes, travel
restrictions are being lifted and business confidence is beginning to return.
"Building on 2021's recorded revenue we are targeting a number of incremental
revenue growth opportunities for 2022 which, if delivered, will be a step
change for the business. Our West Africa airport operations are recovering
strongly returning to pre-pandemic levels. Our port security business is
growing and we are targeting new opportunities to be delivered in the year. We
are seeing recovery and anticipate healthy growth in both our guarding and
training businesses. Our enquiries remain buoyant, and we are targeting
material growth both in our product sales and larger-scale solutions business.
"In conclusion therefore, the recovery we are seeing in existing revenue
streams and new contracts, together with our business model and the
opportunities we have been developing over the years, despite the challenges
and setbacks we have experienced from the global Covid-19 pandemic, underpin
our confidence for the future growth of our business. Whilst there is still
uncertainty in the world, not least with evolving global events, we remain
optimistic that we can meet 2022 financial year market expectations."
Investor Presentation: 15:00hrs on Tuesday 10 May 2022
The presentation will be hosted through the digital platform Investor Meet
Company at 15:00hrs on Tuesday 10 May 2022. Investors can sign up to Investor
Meet Company for free and add to meet Westminster Group plc via the following
link:
https://www.investormeetcompany.com/westminster-group-plc/register-investor
(https://www.investormeetcompany.com/westminster-group-plc/register-investor)
.
Investors who have already registered and added to meet the Company will
automatically be invited.
Peter Fowler, Chief Executive Officer, and Mark Hughes, Chief Financial
Officer, will review the results for 2021 and update on prospects for the
Group.
Questions can be submitted pre-event to westminster@walbrookpr.com, or in real
time during the presentation via the "Ask a Question" function.
Annual Report and Accounts - The final results announcement can be downloaded
from the Company's website (www.wsg-corporate.com). Copies of the Annual
Report and Accounts (in addition to the notice of the Annual General Meeting)
will be sent to shareholders on or before 1 June 2022 for approval at the
Annual General Meeting to be held on 28 June 2022.
For further information please contact:
Westminster Group Plc Media enquiries via Walbrook PR
Rt. Hon. Sir Tony Baldry - Chairman
Peter Fowler - Chief Executive Officer
Mark Hughes - Chief Financial Officer
Strand Hanson Limited (Financial & Nominated Adviser)
James Harris 020 7409 3494
Ritchie Balmer
Arden Partners plc (Broker)
Richard Johnson (Corporate) 020 7614 5900
Tim Dainton/Simon Johnson (Broking)
Walbrook (Investor Relations)
Tom Cooper 020 7933 8780
Paul Vann
Nick Rome Westminster@walbrookpr.com (mailto:Westminster@walbrookpr.com)
Notes:
Westminster Group plc is a specialist security and services group operating
worldwide via an extensive international network of agents and offices in over
50 countries.
Westminster's principal activity is the design, supply and ongoing support of
advanced technology security solutions, encompassing a wide range of
surveillance, detection (including Fever Detection), tracking and interception
technologies and the provision of long-term managed services contracts such as
the management and running of complete security services and solutions in
airports, ports and other such facilities together with the provision of
manpower, consultancy and training services. The majority of its customer
base, by value, comprises governments and government agencies,
non-governmental organisations (NGO's) and blue-chip commercial organisations.
The Westminster Group Foundation is part of the Group's Corporate Social
Responsibility activities.
The Foundation's goal is to support the communities in which the Group
operates by working with local partners and other established charities to
provide goods or services for the relief of poverty and the advancement of
education and healthcare particularly in the developing world.
The Westminster Group Foundation is a Charitable Incorporated Organisation,
CIO, registered with the Charities Commission number 1158653.
Chairman's Statement
Overview
2021 was a year of great challenges, but also of great success for
Westminster. We saw the signing of two major managed services contracts in
the Democratic Republic of Congo and West Africa, but also the frustration of
projects right shifting into 2022 and beyond. Against a difficult year
dominated by the uncertainty caused by the Covid-19 pandemic, I am pleased to
present the Westminster Group PLC Final Results for the year ended 31 December
2021.
In April 2021, Westminster was recognised for its excellence in International
Trade given its outstanding growth in overseas sales in the last 3 years. It
was one of just 205 organisations nationally for which Her Majesty the Queen
has approved the Prime Minister's recommendation that Westminster be awarded
the prestigious Queen's Award for Enterprise. The significance of this
prestigious award is recognised worldwide and is an indication of the growth
and momentum we have achieved with our world-wide business over the past few
years. To have now been selected for this distinguished award is an honour,
not just for the Company but for all our employees around the world who have
contributed to this success.
The award was formally presented by the Lord Lieutenant of Oxfordshire, Sir
Tim Stevenson CVO OBE, on behalf of Her Majesty the Queen, at a ceremony at
Westminster House on Friday, 3 September 2021.
I am proud that the Group is recognised globally for its specialist security
and services expertise, operating worldwide via an extensive international
network of agents and offices in over 50 countries. Britain has always been
at the forefront of innovation in security and defence solutions and this
Queen's Award accolade further validates the position Westminster holds in
that marketplace.
The last two years have been dominated by Covid-19, which was declared a
global pandemic in March 2020, creating a worldwide healthcare crisis with
hundreds of millions of citizens infected and millions tragically losing their
lives. Governments around the world reacted in various ways with many closing
borders, some putting large parts of their populations on lockdown and
imposing travel restrictions. This has had a profound impact on the global
economy and businesses across the globe, the like of which has not been seen
in a generation.
We are a business that operates internationally with staff around the world,
and we are heavily involved in international travel, as such we have been
affected by the impact of the global disruption caused by the pandemic. During
2021, Covid-19 has had a profound impact on the global economy with much
uncertainty and many travel restrictions. This did have a negative impact on
the Company, with sales dropping to just under £7m and losses commensurately
increased.
Corporate Conduct
As a company whose shares are traded on the AIM market of the London Stock
Exchange, we recognise the importance of sound corporate governance throughout
our organisation, giving our shareholders and other stakeholders including
employees, customers, suppliers and the wider community confidence in our
business. We endeavour to deliver on our corporate Vision and Mission
Statements in an ethical and sensitive manner irrespective of race, colour or
creed. This is not only a requirement of a well-run public company but makes
good commercial and business sense.
In my capacity as Executive Chairman, I have ultimate responsibility for
ensuring the Board adopts and implements a recognised corporate governance
code in accordance with our stock market status. Accordingly, the Board has
adopted, and is working to, the Quoted Companies Alliance (QCA) Corporate
Governance Code 2018. The Chief Executive Officer (CEO) has responsibility for
the implementation of governance throughout our organisation, commensurate
with our size of business and worldwide operations.
The QCA Corporate Governance Code 2018 has ten key principles and we set out
on our website how we apply those principles to our business, and more
detailed information is provided in these accounts.
We operate worldwide with a focus on emerging markets and in a sector where
discretion, professionalism and confidentiality are essential. It is vitally
important that we maintain the highest standards of corporate conduct. The
Corporate Governance Report in this annual report sets out the detailed steps
that we undertake to ensure that our standards, and those of our agents, can
stand any scrutiny by Government or other official bodies.
Corporate and Social Responsibility
As a Group, we take our corporate and social responsibilities very seriously,
particularly as we operate in emerging markets and in some cases in areas of
poverty and deprivation. As highlighted in the Chief Executives Report we are
building on our environment, social and governance strategies. I am proud of
the support and assistance we as a business provide in many of the regions in
which we operate, and I would like to pay tribute to our employees and other
individuals and organisations for their generous support and contributions to
our registered charity, the Westminster Group Foundation. We work with local
partners and other established charities to provide goods or services for the
relief of poverty or advancement of education or healthcare making a
difference to the lives of the local communities in which we operate. For more
information or to donate please visit www.wg-foundation.org
(http://www.wg-foundation.org) .
Employees and Board
Our overriding priority however is and has been the safety and wellbeing of
our people around the world and to continue to provide a valuable service to
our customers. To those ends, we put in place various precautionary measures,
including cost reductions and are undertaking regular risk assessments for all
areas of our business, and have put in place processes and safe working
practices, with a number of employees working from home. We also utilised the
UK furlough scheme where appropriate.
In June 2021, Simon Barrell replaced Charles Cattaneo as a Non-Executive
Director and Chairman of the Audit Committee. Simon's wealth of experience
gained from a variety of business sectors, in particular working in AIM quoted
companies and serving on boards of growing and successful companies, is of
great value to our business as we expand and deliver on our significant
potential. He has worked in groups in adjacent sectors who also serve
emerging markets. This gives him an understanding which will be invaluable
to Westminster in the next stage of its growth.
After several years' valuable service, Lady Patricia Lewis (Patsy Baker)
stepped down from her role as Non-Executive Director as of 1 November 2021.
To replace her, we appointed Major General (Retired) Graham Binns, CBE, DSO,
MC. Graham is a highly decorated retired British Army officer with over 10
years' experience as a senior board level executive in the commercial security
sector. He served as General Officer Commanding 1st (UK) Armoured Division
and then Commandant Joint Services Command and Staff College, retiring in
2010. He had previously commanded the 7th Armoured Brigade (the Desert Rats)
during Operation Telic 1 when the brigade took Basra in southern Iraq.
Following his military career, Graham was recruited as Chief Executive Officer
of Aegis Defence Services Ltd. providing security services to governments and
major corporations throughout the Middle East and Africa, with revenues of
£300m and a staff of over 3,000. Following the acquisition of Aegis by
GardaWorld, the world's largest privately owned security group with 122,000
employees and a turnover of $3 billion, Graham served for several years as
Senior Managing Director of GardaWorld International Protective Services, and
more recently as their senior advisor on strategic client relationships.
Both Lady Patricia Lewis and Charles Cattaneo stepped down in order to spend
more time on their other commitments. I would like to thank them both for
their dedication and hard work over the past few years. They made a positive
contribution to the Group and were valued board members.
I would finally like to extend my appreciation to our investors for their
continued support and to our strategic investors who are bringing their
expertise to help deliver value for all.
Rt. Hon Sir Tony Baldry DL
Chairman
Chief Executive Officer's Report
Business Description
The Westminster Group is a global integrated security services company
delivering niche security solutions and long-term managed services to high
growth and emerging markets around the world, with a particular focus on long
term recurring revenue^ business.
Our target customer base is primarily governments and governmental agencies,
critical infrastructure (such as airports, ports & harbours, borders and
power plants), and large-scale commercial organisations worldwide.
We deliver our wide range of Land, Sea and Air solutions and services through
a number of operating companies that are currently structured into two
operating divisions, Services and Technology, both primarily focused on
international business as follows:
Services Division
Focusing on long term (typically 10 - 25 years) recurring revenue managed
services contracts such as the management and operation of security solutions
in airports, ports and other such facilities, together with the provision of
manpower, consultancy and training services.
Technology Division
Focussing on providing advanced technology led security solutions encompassing
a wide range of surveillance, detection, tracking, screening and interception
technologies to governments and organisations worldwide.
In addition to providing our business with a broad range of opportunities,
these two divisions offer cost effective dynamics and vertical integration
with the Technology Division providing vital infrastructure and complex
technology solutions and expertise to the Services Division. This reduces both
supplier exposure and cost and provides us with increasing purchasing power.
Our Services Division provides a long-term business platform to deliver other
cost-effective incremental services from the Group.
We have a successful track record of delivering a wide range of solutions to
governments and blue-chip organisations around the world. Our reputation grows
with each new contract delivered - this in turn underpins our strong brand and
provides a platform from which we can expand our business.
Overview
The defining aspect of 2021 was, of course, the ongoing global impact of the
Covid-19 pandemic, whilst one of the main highlights of the year was the
prestigious Queen's Award for Enterprise in recognition of Westminster's
outstanding contribution to International Trade, which recognised
Westminster's many achievements, particularly given the challenges presented
by the global pandemic.
In January 2021, the UK entered its third national lockdown from the ongoing
Covid-19 pandemic, which lasted until March 2021. Many areas of the world
similarly had ongoing travel restrictions, all of which impacted large parts
of our business. However, with such restrictions beginning to ease in Q2 2021,
the expectation was that we would see a recovery in H2 2021 and that some of
our delayed projects would once again begin to come on stream. Ultimately,
this was not to be the case. With lockdowns and travel restrictions continuing
in many parts of the world, together with a lack of business confidence
causing many companies to defer capital expenditure etc., exasperated by the
Omicron variant outbreak sweeping the world in the later part of the year, the
events materially impacted parts of our business for the full year, with
resultant reductions in revenues.
However, I am pleased to report that, despite parts of our business being
adversely impacted by lockdowns and travel restrictions, the strength of our
business model, with multiple revenue streams from multiple sources around the
world, together with our global footprint has meant that we were better placed
than many companies to deal with the numerous challenges created by the
Covid-19 pandemic and despite the challenges we did manage to secure a number
of notable achievements, not least of which was the Queen's Award for
Enterprise in recognition of Westminster's outstanding contribution to
International Trade.
This prestigious award was formally presented by the Lord Lieutenant of
Oxfordshire, Sir Tim Stevenson CVO OBE on behalf of Her Majesty the Queen, at
an Award Ceremony and Open Day at Westminster House on Friday, 3 September
2021. The event proved to be a huge success and was attended by over 100
guests including many Ambassadors, High Commissioners, Embassy staff and
Government representatives from countries around the world, as well as
customers, partners, and shareholders. In presenting the award Sir Tim
Stevenson said, "The Queen's Award for Enterprise is not an easy award to
achieve, and Westminster's performance has been extraordinarily impressive
demonstrating impressive sales growth."
^ This is an Alternative Performance Measure - refer to Note 2 of the
financial statements for further details
The significance of this prestigious award is recognised worldwide and is an
indication of the growth and momentum we have achieved with our world-wide
business over the past few years.
Given the ongoing worldwide impact of the global Covid-19 pandemic, 2021 has
been another challenging year but a year in which we have still achieved a
number of successes to move our business forward and I am proud of how our
staff have pulled together and how we have managed to navigate the crisis. We
have continued to keep our people safe, fully employed (utilising the UK
government's furlough scheme where appropriate) and maintained our global
operations, albeit some on reduced levels.
Notwithstanding the many challenges, we continued to deliver important new
business and develop new opportunities, with parts of our business performing
well but with other parts, particularly Technology Division sales, being
materially impacted. The Services Division increased revenues by 16% to £5.1m
(2020: £4.4m), despite still being impacted by Covid-19 travel and lockdown
restrictions which shows the value of this division, particularly the
long-term managed services, as recovery gets underway. However, the
Technology Division revenues reduced to £2.0m (2020: £5.6m). This was
largely due to a lack of business confidence and uncertainty through the
Covid-19 pandemic and a reluctance from many companies to commit to capital
expenditure resulting in a number of expected contract awards being delayed
and the ensuing revenues being delayed.
We have continued to deliver on business opportunities and, in 2021, we
supplied goods and service to 60 countries around the world, including some
notable contract wins. We have continued to invest in our worldwide business
development programmes in order to deliver on our growth potential,
particularly in our long-term major managed services projects.
Divisional Review
Services Division
Our Services Division has performed well and delivered some notable
achievements in the period.
In our 2020 Annual Report, we stated one of our key goals for 2021 was to
secure at least one more long-term managed services contract and in that
respect, I am delighted that we have secured two significant new long-term
contract wins.
On 15 June 2021, we signed a 20-year manged services contract to provide
security services to 5 airports in the Democratic Republic of the Congo
("DRC"), Central Africa. The contract is subject to a formal ratification
process and whilst this process has taken far longer than anticipated, largely
due to the client's internal procedures, the contract is an exciting
development for the company. There is considerable pressure on the airport
authority to conclude this process and we expect this to be finalised by Q4
this year. Once the process is completed, it will not only deliver meaningful
long-term revenues but means we will have established an important presence in
a new region of Africa.
In addition, on 16 June 2021, we further announced that we had signed another
long-term managed service contract to provide port screening services in West
Africa for the next 10+ years. We had been pursuing and developing this
opportunity for several years and it is another important win for the Company
that further extends our global footprint and profile in the port screening
sector. The majority of preliminary works required at the port, such as
acquisition of the required land for the port security operations and export
licencing requirements, have now largely been completed and we anticipate
revenues from this long-term project will commence in H2 2022.
Furthermore, in early July, we announced that we had been awarded yet another
high-profile contract to supply security services to help protect the historic
Royal Palace and Fortress of the Tower of London. Security of such a
landmark building, which is open to the public, is paramount and Westminster
has been contracted to provide, inter alia, professional security services to
the pedestrian and vehicular entrances.
These important new contract wins demonstrate our global reach but, as we have
stated on a number of occasions, that large-scale projects such as these do
take time to develop and negotiate and in securing such contracts, we equally
demonstrate that we have the skills and resources required to successfully
deliver on such opportunities. Together these new contracts alone will add,
once fully operational, several million pounds to our annual revenues and
together with our other managed services and recurring revenue contracts,
underpin confidence in our future forecasts and growth.
In addition to these important new contracts, we are encouraged in the
recovery and growth of our existing operations during the latter part of 2021
as the worst of the Covid-19 challenges are hopefully put behind us.
Our West African Airport managed services operation which, like aviation
across the world, had been severely impacted by lockdowns and travel
restrictions but encouragingly has seen a strong bounce back through 2021. In
January 2021, we were running at 39% of the pre-Covid-19 pandemic 2019 levels
but, by the end of the year in December 2021, we were running at around 84% of
pre-pandemic levels and I am pleased to say this trend has continued into 2022
with the first few months of the year ahead of budget expectations and nearing
pre-pandemic levels.
Overall, in 2021, the Services Division revenue achieved around 60% of
pre-pandemic revenues and due to the operational gearing of these projects,
most of the 40% lost revenues would have flowed through to the bottom line and
in turn would have materially improved the performance for the year.
Our port managed services operations in Ghana have not been materially
affected by Covid-19 and continue to perform well. The 4th berth became
operational in late 2021 and we expect to see further growth with this
important project.
Both our guarding and training businesses were heavily impacted by Covid-19
lockdowns and travel restrictions, but we are encouraged by the recovery we
are seeing in both businesses, and we expect this to continue into 2022 as
travel restrictions around the world continue to ease.
Our guarding business has already secured important new business in 2021 that
will benefit future years and we are currently pursuing a number of
interesting new opportunities which could see revenues from this business
increase dramatically.
We are also pleased to see our training business securing new contracts from
governments and organisations and is now operating ahead of budget. The global
Covid-19 pandemic has demonstrated the importance of distance and online
training and the strategic decision we took some time ago to invest in
building an online training capability, both in house and through strategic
partnerships, will prove to be very beneficial and we expect this part of our
business to continue to grow.
As the pandemic impacted parts of our business, we continued to develop new
opportunities and initiatives such as our partnership with Certific in its
Covid-19 testing programme for which Westminster is providing verification
services. This new initiative delivered six figure revenues in 2021 although,
as the requirements for Covid-19 testing reduce, we anticipate this service
will cease to be material going forward.
Technology Division
We continue to experience healthy enquiry levels and during 2021 have secured
orders for our products and services from 60 countries around the world,
although effects of Covid-19, including travel restrictions, have caused some
delays in delivery.
The caution on spending by many companies during 2020 continued into 2021
which meant that purchasing decisions regarding some of our larger technology
project opportunities have been deferred. We are encouraged however that
several of these opportunities are once again beginning to move forward.
An example of such delayed projects was the $1.7m airport security contract
for two airports in Southeast Africa, which we announced in December 2021.
This contract, which is being funded by the European Investment Bank, was
expected to be announced in early 2021 after a lengthy international
competitive tender process and involves the upgrading of security equipment,
including new x-ray screening and metal detection equipment, an advanced CCTV
surveillance system and new control and command centres at both airports. Had
the contract been awarded, as expected in 2021, it would have been completed
that year, however, it is now expected to be undertaken and completed in 2022.
In the UK, we were pleased to report the Palace of Westminster contract,
however it is another project that suffered delays due to the Covid-19
pandemic. It was initially secured in 2020 but could not be started until
later in 2021. The project was successfully completed in early 2022 and we are
already in discussions regarding extensions to this project.
As previously advised, we have been working on the establishment of
Westminster Arabia in the Kingdom of Saudi Arabia jointly with our partners
Hazar International and this process, which had been delayed by various
lockdowns and restrictions. I am delighted to report that this has now been
completed and we expect Saudi Arabia to be an important contributor to future
revenues with some substantial project opportunism already being discussed and
pursued.
Our German subsidiary, situated to the Southeast of Munich, is focussed on
supplying security technology and solutions to the European market. Post
Brexit the business is particularly well positioned to serve the Group's EU
clients. The team has secured a number of important new clients including US
military bases and is developing substantial business opportunities in the
region.
In addition, a key project opportunity for the team is the 15 year, €24
million per annum contract for airport security at Tehran International
Airport in Iran, which was signed, with the full support of the British
Government, in 2019 but was put on hold when President Trump unilaterally
withdrew from JCPOA. We are closely monitoring geo-political events with
regards to the US and Iran regarding the JCPOA agreement. We remain in close
contact with our partners and the UK Government regarding current talks
regarding resumption of the JCPOA agreement and potential outcomes. Should
circumstances change and US and international sanctions, including banking, be
lifted, there remains an opportunity for our German office to revisit this
prospect and other opportunities.
Our French business, Euro Ops, which we acquired in May 2019, continues to be
a valuable strategic addition to the Group. The company provides aviation
focussed services such as humanitarian flights and logistics, emergency
flights, flight operations, charter and storage management. The company has
not only brought new skills, services and revenues to the Group but provides
greatly improved access to Francophone countries for the wider Group services,
with some interesting project opportunities being pursued. Our DRC contract
was secured as a direct result of this enhanced access to Francophone
countries and is just one of several such opportunities in the region we are
pursuing.
Summary
On a wider front, despite all the challenges we continued to face in 2021, we
have continued to progress various existing and new large-scale managed
services project opportunities around the world which can and will provide
step changes in growth when secured. No two opportunities are the same and
each can have their own idiosyncrasies and challenges. As we have previously
advised, project opportunities of this size and nature, particularly in
emerging markets, are not only time-consuming and involve complex negotiations
with numerous commercial and political bodies, but discussions can ebb and
flow over many months, with periods of intense activity which can be followed
by long periods of inactivity. This has been particularly the case with the
added disruption of the Covid-19 pandemic. It is however precisely because of
such challenges that competition is limited and the opportunities offer
transformational growth opportunities.
Whilst there is never certainty as to timing or outcome of the many project
opportunities we are pursuing, we are making progress on a number of fronts,
and we will provide market updates on material developments when appropriate
and in line with our regulatory responsibilities.
In summary, despite the ongoing challenges created by Covid-19, and in some
cases because of it, 2021 was a busy year and whilst our results for the year
have been impacted by lockdowns, travel restrictions and lack of business
confidence around the world, we continued to make progress on a number of
fronts, and it was pleasing that some of our achievements were recognised by
the Queen's Award. We continued to deliver on business opportunities and
during the year supplied goods and services to countries around the world,
including some notable contract wins. We have continued to invest in our
worldwide business development programmes in order to deliver on our growth
potential, particularly in our long-term major managed services projects. The
benefits from these achievements will begin to be seen in 2022 and beyond and
the Board and I remain excited by our growth prospects.
Strategy
Our vision is to build a global business with strong brand recognition
delivering advanced security solutions and long-term managed services, on
Land, at Sea and in the Air, primarily to high growth and emerging markets
around the world, with a particular focus on building multiple revenue
streams, many of which involve long term recurring revenue business, from
diverse sources in varying parts of the world, providing a degree of
resilience to external events and enhancing shareholder value. The value of
this strategy has been demonstrated during the Covid-19 pandemic where
Westminster has been able to maintain and grow revenues from parts of the
business helping to offset reductions in other parts, such as its airport
security, training and guarding businesses, all of which were materially
impacted by the Covid-19 pandemic.
The Board considers strategy at each regular Board Meeting and has at least
one 'off-site' strategy day each year to review the Company's rolling
five-year Strategic Growth Plan and to consider new short-, medium- and
long-term strategies that could be implemented to achieve our goals and to
deal with changing global and economic issues.
The last two years of the global Covid-19 pandemic have demonstrated the
challenges and impact global events can have on businesses and our flexible
and proactive approach to strategy has helped us mitigate some of the adverse
impacts on our business. For example, in 2020, we took early action to stock
up with and market suitable products and systems, such as fever screening and
sanitisation systems, greatly increasing our sales in this respect helping to
offset other impacted areas of the business. In 2021, whilst demand for fever
screening and certain other Covid-19 related products diminished, our
strategic alliances in the field of Covid-19 testing systems also proved a
valuable new revenue stream offsetting reduction elsewhere.
Covid-19 is of course not the first and will not be the last external
challenge for which we need to have strategies in place to deal with. In 2014,
the world experienced the West African Ebola outbreak which caused huge
problems for the region, and now, in 2022, the Russian invasion of Ukraine has
world-wide implications. I am confident the strategies we have now and will
further put in place, together with our diverse business model, will help us
not only manage the challenges but seek new opportunities from them.
Whilst we still believe that the opportunities we have been developing,
primarily in emerging and high growth markets, are what will deliver
exponential growth over the next few years, these can and do take time to
develop and as we have seen, can be disproportionately impacted by global,
regional and local events. Accordingly, one of the strategies we are now
developing is to balance some of that risk by building more core business in
the UK and developed world areas. We have made a good start with prestigious
contracts such as the Tower of London, Palace of Westminster, Scottish
Parliament, HM Prisons, UK Border force, and we will be looking to materially
increase such business through 2022 and beyond.
One initiative we are pursuing regarding building our UK business relates to
the forthcoming new legislation in the UK, Protect Duty. Protect Duty was born
out of Martyn's Law, named after Martyn Hett, who at 29 years was killed in
the Manchester Arena terrorist attack in May 2017. Martyn's mother, Figen
Murry, has been a tireless campaigner and the force behind Protect Duty,
formally Martyn's Law legislation that will require many businesses giving
access to the general public, to formally assess and take measures to address
terrorism risks for the first time.
Protect Duty is set to have a profound and lasting effect on security
provision in the UK - encompassing Publicly Accessible Locations (PALs) and
requiring them to actively protect visitors and staff. The Home Office
estimates that 650,000 UK businesses could be affected by Protect Duty, and
this offers substantial business opportunities for Westminster's extensive
portfolio of products and services. The Westminster Group has been working on
this opportunity for over a year, in collaboration with a number of
stakeholders, including public figures, magazines, industry experts and the
police, in readiness for the upcoming legislation and can not only provide
support and consultancy to assist venues understand the requirements but can
provide all the equipment, training and support services required.
As part of our strategy for growth, we will also continue to improve and
enhance our Board and senior management team and have made a number of key
appointments broadening our range of experience and expertise. If we are to
maximise the substantial growth opportunities we are developing, particularly
with our managed services operations, it is essential we have the right
strategies, people, processes and systems in place to successfully deliver
such growth.
Given budget constraints for many companies resulting from the global Covid-19
pandemic, another strategy we are exploring is with debt funding and leasing
providers to transition large scale projects from a 'capital' purchase to a
longer term, 5+ years, revenue model, which would also include maintenance and
training, along with value-add services such as Big Data acquisition for
applications such as border crossings. Given that some of these project
opportunities can be multi-million dollars in value, we believe that this
model brings added value which sets us apart from the competition and will be
attractive to many potential clients; indeed, we are already in discussions
with a few government bodies on this basis. With large scale projects such as
these, there is never certainty of outcome or timing, but we are very
optimistic this initiative will lead to material and additional long-term
revenues.
Whilst we continue to pursue our many organic growth opportunities, we
continue to identify potential acquisitions and strategic joint ventures (JVs)
in key markets and regions, and we believe that this strategy will enable the
Company to expand its sphere of operations in a controlled and effective way.
The challenges of the last two years have impacted our performance against our
stated goals and accordingly, the Board has reset its key goals for 2022 as:
1. Improve ratio of enquiries received/quotations issued by number and
quotations issued/orders received by value;
2. Increase product portfolio and sales achieved;
3. Increase sales in the UK and other first world countries;
4. Secure at least one more long-term managed services contract;
5. Deliver another year of significant recurring revenue growth;
6. Deliver a material improvement in revenue and a move to
profitability;
7. Deliver a sustained and material improvement in our share price;
8. Develop a more formal and structured Environment, Social, and
Governance (ESG) strategy;
9. Instigate an Investors in People programme; and
10. Deliver on Market Expectations.
Environment, Social, and Governance (ESG) Strategy
The Westminster Group takes its corporate and social responsibilities very
seriously and recognises that sustainability across our various business
sectors is important to us and our future growth, important to our
shareholders and wider stakeholders. In this respect, one of our key goals for
2022 is to develop our existing corporate social responsibility and governance
activities into a more formal and focussed ESG strategy.
Our people are our most valued asset, and we recognise that a happy and
motivated workforce is important. We are an equal opportunities employer and
endeavour to treat all our staff, equally, fairly and to assist them reach
their maximum potential. We do this by having structured systems to support
staff in their job roles and in providing training programmes to improve their
skills. We hold regular meetings and appraisals with staff and welcome input
and feedback suggestions.
We provide flexible working arrangements, including home working where
possible. We provide free fruit and refreshments, allow gym time to help keep
our staff healthy and provide medical support where appropriate. We organise
team building and social events across our business units (although this has
been challenging over the past 2 years). We are looking to implement an
Investors in People programme.
We take our social responsibilities very seriously including supporting the
communities in which we operate and, in this respect, have our own registered
charity - the Westminster Group Foundation - see here www.wg-foundation.org
(http://www.wg-foundation.org)
Equally, we take our environmental responsibilities seriously and look to
minimise our carbon footprint, for example by use of electric vehicles where
possible. As an international business, travel has always featured heavily in
our business activities. One thing the lockdown has demonstrated is that some
of this travel can be replaced by remote meetings and conference by systems
such as Microsoft Teams and Zoom, which has now become commonplace and far
more accepted across the world. Accordingly, as the pandemic subsides, we
intend to focus, where possible, of reducing travel by continuing with remote
meetings. Where international travel is still necessary, we are investigating
carbon offset programmes. We are also working towards ISO 14001 Environmental
Management (EMS).
Performance Indicators
The Group constantly monitors various key performance indicators for factors
affecting the overall performance. At Group level, the revenues and gross
margin are monitored to give a constant view of the Group's operational
performance. A key focus for the Group is in building its recurring revenue
base from contracted income relating to its managed services projects, our
maintenance and guarding contracts and this is a key metric being monitored.
As employment costs are the single largest cost base for the Group, the number
of employees and employee costs are also monitored to ensure best use of
resources. Day's sales outstanding is used to measure the cash conversion of
revenue and identifies debtor aging issues this has returned to more normal
levels following an unusually low 2020 year end position.
The Services Division measures its performance in the four key areas of its
deliverables - passengers served in its airport operations, vehicles and
containers served in its port and border operations, the number of days
training delivered by our training businesses and the number of guarding hours
delivered by our guarding businesses.
The Technology Division measures its sales activity by reference to the number
of enquiries received per month and the number of orders received. The number
of countries and number of return customers are monitored to give a view on
the performance of the division. It is pleasing that we are seeing higher
levels of return customers even though overall market activity is down due
primarily to the uncertainty caused by the pandemic.
Group 2021 2020
Revenue £7.1m £9.9m
Gross Margin 46% 40%
Recurring Revenues £5.4m £4.5m
Days Sales Outstanding 57 19
Number of Employees 241 239
Average Employee Cost Per Head £18,129 £16,264
Services Division 2021 2020
Passengers Served ('000) 77 51
Vehicles/Containers Served ('000) 1,090 1,003
Training Hours Delivered 1,136 1,520
Guarding Hours Delivered 29,677 38,962
Technology Division 2021 2020
Average Enquiries Per Month 293 356
Average Number of Orders Per Month 37 54
Number of Countries Supplied 60 78
Number of Return Customers 242 70
Current Trading & Business Outlook
The outlook for 2022 is looking positive as the worst impact of the global
Covid-19 pandemic recedes and travel restrictions are lifted in many areas,
although we remain mindful that global outlook remains uncertain, not least
with the Russian invasion of Ukraine.
Building on 2021's Covid impacted revenues, we are targeting a number of
incremental revenue growth opportunities and anticipate increases in our
various services, solutions and product sales revenue streams. We are
targeting growth in product sales (£2.5-£3.5m), solution sales
(£3.5m-£4.5m), existing services (3.5m-£4.5m) and new services
(£5.5-£6.5m). These growth targets are based on the recovery and growth we
are seeing in our various business sectors as shown below.
We are encouraged to see our West African airport operations have recovered
strongly ahead of expectations. The recovery we saw in the latter part of 2021
has continued into 2022 and we start the year nearing pre-pandemic levels and
with March 2022 passengers exceeding pre-pandemic levels, being the highest
March volume ever.
Our Ghana port security operations continue to generate healthy revenues and
with the fourth berth having come on stream at the end of 2021 we expect this
to continue, which demonstrates the value of this long-term managed services
contract. In addition, our business in Ghana is growing and we are now
securing other important new business in the country and are pleased to be the
Gold Sponsors of the Queen's Platinum Birthday Celebration in Ghana on 26
April 2022 organised by the British High Commission, which will be a
high-profile event and an excellent opportunity to expand our profile.
Due to the delays we have encountered with the DRC ratification process we now
expect revenues will commence in Q4 2022, although given the momentum we are
seeing elsewhere in the business we do not anticipate this will have a
material impact on market expectations.
The logistics, licencing and planning phase of our new 10 year West African
port project secured in 2021 is nearing completion and the operational phase
is expected to begin in H2 2022.
Our guarding and training businesses continue to recover from the impact of
lockdowns and travel restrictions and both businesses are not only delivering
on existing contracts, such as the Tower of London, but also winning important
new business.
We continue to receive a healthy flow of enquiries for our products and
services and are already seeing improved product sales and in the first
quarter of 2022, we have already supplied goods and services to 31 countries.
Over the past couple of years, we have not seen any large-scale solution sales
due to the economic impact of Covid-19, however we are now once again seeing
movement in a number of the large-scale opportunities we have been pursuing
and, in this respect, the $1.7m contract for security solutions at two
airports in Southeast Africa, we secured at the end of 2021, and which will be
fully delivered in 2022 is an encouraging example.
We are pleased to have successfully completed in Q1 2022 the installation
phase of the Palace of Westminster contract and for which we are now providing
maintenance services and we are already in discussions on other matters and
extensions.
We are pleased to report that Westminster Arabia is now finally established
and together with our local partners, Hazar we are working on a number of
exciting project opportunities, and we fully expect to see Westminster Arabia
provide a material contribution to our 2022 revenues.
We continue to invest in our worldwide business development programmes in
order to deliver on our growth potential, particularly in our long-term major
managed services projects and our expectation is that we will secure at least
one more long-term managed services contract in 2022 with the potential to
secure more.
The foregoing, outlining the recovery we are seeing in existing revenue
streams and new contracts, together with our business model and the
opportunities we have been developing over the years, despite the challenges
and setbacks we have experienced from the global Covid-19 pandemic, underpin
our confidence for the future growth of our business. Whilst there is still
uncertainty in the world, particularly with evolving global events, we remain
optimistic that we can meet 2022 financial year market expectations.
Peter Fowler
Chief Executive Officer
Chief Financial Officer's Report
Revenue
2021 revenues of approximately £7.1m (2020: £9.9m) reduced on 2020 levels
because we suffered a full year of Covid-19 pandemic trading (2020 was 9
months) without the benefit of a surge in fever detection sales, which
happened in 2020. Projects continued to be delayed awaiting confidence that
the world was returning back to more normal times.
Services revenues increased by 16% to over £5.0m (2020: £4.4m), despite
being impacted by Covid-19 travel and lockdown restrictions. This was partly
as a result of a strong bounce back of our West African Airport passenger
levels during the year. In January 2021, we were running at 39% of the
pre-pandemic 2019 passenger numbers but by December 2021, we were close to
84%. This improvement has continued into 2022, reaching just over 100% of
2019 in Q1 2022.
Westminster's Technology Division revenues reduced to £2.0m (2020: £5.6m).
This was largely due to a lack of business confidence and uncertainty through
the pandemic and a reluctance from many companies to commit to capital
expenditure resulting in a number of expected contract awards being delayed.
Gross Margin
The higher margin Services Division sales dominated the Company's 2021
revenue, increasing the Gross Margin Percent to 46% (2020: 40%). Another
reason for the increase in the Gross Margin for 2021 was the lack of large
solutions sales which typically operate at a lower margin level of
approximately 15%. Thus, we had a better margin mix.
Operating Cost Base
Group administrative costs increased to £5.2m (2020: £4.7m) in total. When
the Covid-19 pandemic began, the Group made redundancies and other cost
cuts. In 2021 continuing into 2022, we are "building back better",
increasing our sales force to be ready to take advantage of the expected
pent-up demand. However, the long lead time on our sales cycle means that this
investment will not fully bear fruit until 2022 and beyond. We also benefited
from more government furlough support in 2020.
We have taken advantage of the UK Government furlough scheme, receiving
£141,000 in 2021, which is less than 2020 (£214,000). This has meant that
we were able to keep key staff such as trainers employed who had no work due
to lockdowns and other restrictions imposed.
Effect of Covid-19
Whilst Westminster has mitigated certain effects of the Covid-19 pandemic due
to its multi revenue stream business model and early action taken by
management to plan for the crisis, there is no doubt that Covid-19 did have a
significant impact on the business and the performance in 2021.
Operational EBITDA^ from underlying operations
The Group's loss from operations was £1.9m (2020: £0.7m). When adjusted for
the exceptional and non-cash items and depreciation and amortisation, as set
out below, the Group recorded an EBITDA^ loss from underlying continuing and
discontinued operations of £1.67m (2020: £0.52m loss).
Reconciliation to EBITDA^ from underlying operations 2021 2020
£'000 £'000
Loss from operations (1,917) (744)
Depreciation, amortisation and impairment charges 244 225
Reported EBITDA (1,673) (519)
Share based expense - -
Exceptional items - -
EBITDA^ from operations (1,673) (519)
^ This is an Alternative Performance Measure refer to Note 2 for further
details
Finance Costs
Total finance costs for 2021 were £0.0m (2020: £0.0m), because the Group has
remained debt free other than the debt imputed from leased assets under IFRS
16. There was an underlying cash charge of £0.0m (2020: £0.3m).
Earnings Results for the Year
The Group loss before taxation was £1.9m (2020: Loss before tax of £0.8m)
and the loss per share was 0.62p (2020: Loss per share of 0.45p).
Statement of Financial Position
The Group's gross assets amounted to £9.3m on 31 December 2021 compared with
£9.5m on 31 December 2020. The main movement was a reduction in cash
offsetting a £1.6m increase in working capital and funding the losses.
The Group's net current assets amounted to £5.3m on 31 December 2021 (2020:
£5.4m) for the same reasons as the change in total Group assets.
The Group's trade and other receivables balance as at 31 December 2021 was
£3.7m (2020: £2.4m). Average days sales outstanding at the year-end were 57
(2020: 19). This represents a return to more normal levels of debtor days.
Cash and cash equivalents were £0.9m at 31 December 2021 compared with £2.1m
at 31 December 2020. The decrease is mainly due to losses and an
unfavourable movement in working capital.
Trade and other payables were £1.8m (2020: £2.3m) and average creditor days
were 43 (2020: 50).
A deferred tax asset of £1.0m (2020: £1.0m) was held at the year end.
Total equity on 31 December 2021 stood at a surplus of £7.5m (2020: £7.1m).
Key Performance Indicators
The Key Performance Indicators by which we measure performance of our business
are set out in the Chief Executive Officer's Report.
Convertible Loan Notes (CLN) and Convertible Unsecured Loan Notes (CULN)
The unsecured CLN's capital was fully repaid on 22 December 2020.
Summary of movements in loan notes at principal value £'000 2021 2021 2021 2020 2020 2020
CULN CLN Total CULN CLN Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January - - - 171 2,245 2,416
Fair Value adjustment on Conversion/ Repayment - - - 19 - 19
Conversion - - - - (213) (213)
Repaid - - - (190) (2,032) (2,222)
At 31 December - - - - - -
Equity Issues
Date Type Number of Shares Price per share Funds Raised
p £'000
18 June 2021 Equity placing 43,859,649 5.7 2,500
22 October 2021 Warrant Redemption 127,500 7 9
43,987,149 2,509
Summary of Warrants
As at 31 December 2021 the warrants outstanding were:
Number Holder Strike Price (p) Issued Life Vesting Criteria
170,455 S P Angel 22.0 31 January 2018 5 At grant
3,499,222 RiverFort 5.2 21 January 2020 4 6 months after grant: - detachable
24,872,500 Various Holders 7.0 22 December 2020 2 At grant: - detachable
127,500 of the 7p warrants issued on 22 December 2020 were exercised in
October 2021.
For further details on warrants, refer to Note 21.
Capital Reduction
At the AGM on 24 June 2021, the Shareholders voted to approve reduction of
capital. This was subsequently ratified by court order in November 2021.
The reduction of capital involved a cancellation of the deferred shares,
cancellation of the share premium account, capitalisation and immediate
cancellation thereafter of the share merger reserve account which then enabled
the creation of distributable reserves in order to enhance the Company's
ability to pay dividends and/or to make other forms of distributions to its
shareholders in the future.
£'000
Deferred Shares Cancelation 15,991
Share Premium Cancelation 16,355
Merger Reserve Cancelation 300
Distributable Reserves 32,646
Prior Year Adjustment
The 2021 financial statements include restated balances for both 2020 and
2019. A prior year adjustment has been made in respect of the minority
interest in a Sierra Leonean subsidiary, Facilities Operations Management
Limited, which had erroneously been recorded as being 90% owned but
investigations have revealed that it is wholly owned by the group. Note 28
identifies the changes from the signed financial statements of 2020 and 2019
to the restated balances in these financial statements.
Cash Flow Statement
During the year, the Group had an operating cash outflow of £3.3m (2020:
outflow £1.9m) which arose from the loss and an unfavourable working capital
movement of £1.6m (2020: £1.0m) which was primarily an increase in
receivables and investment in the new projects.
During the year, the Group raised £2.51m gross from the issue of new equity
(2020: £6.96m).
Reconciliation from adjusted EBITDA^ to normalised operating cash flow 2021 2020
£'000 £'000
Adjusted EBITDA^ (1,673) (519)
Net changes in working capital (1,632) (1,033)
Movement on tax (11) 31
Net Cash used in underlying operating activities (3,316) (1,521)
Net cash used in underlying operating activities is presented excluding
exceptional items, share options expense, and depreciation and amortisation.
Mark L W Hughes
Chief Financial Officer
^ This is an Alternative Performance Measure refer to Note 2 for further
details
Westminster Group PLC
Consolidated Statement of Comprehensive Income for the year ended 31 December
2021
Note 2021 2020
Restated
Total Total
£'000 £'000
REVENUE 3 7,051 9,945
Cost of sales (3,789) (5,974)
GROSS PROFIT 3,262 3,971
Administrative expenses (5,179) (4,715)
(LOSS) / PROFIT FROM OPERATIONS 5 (1,917) (744)
Analysis of operating loss
Profit from operations (1,917) (744)
Add back amortisation 10 78 63
Add back depreciation 11 166 162
Add back share-based expense - -
Add back exceptional - -
items
EBITDA^ (Loss)/Profit from underlying operations (1,673) (519)
Finance costs 4 (3) (17)
LOSS BEFORE TAXATION (1,920) (761)
Taxation 6 (11) 31
LOSS AND TOTAL COMPREHENSIVE INCOME FOR THE YEAR (1,931) (730)
LOSS AND TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
OWNERS OF THE PARENT (1,921) (577)
NON-CONTROLLING INTEREST (10) (153)
LOSS AND TOTAL COMPREHENSIVE INCOME (1,931) (730)
LOSS PER SHARE 8 (0.62p) (0.45p)
The accompanying notes form part of these financial statements.
^ This is an Alternative Performance Measure refer to Note 2 for further
details
Westminster Group PLC
Consolidated and Company Statements of Financial Position
As at 31 December 2021
Restated Restated
Group Group Group Company Company
2021 2020 2019 2021 2020
Note £'000 £'000 £'000 £'000 £'000
Goodwill 9 614 614 614 - -
Other intangible assets 10 150 187 129 120 187
Property, plant and equipment 11 1,895 1,901 1,979 1,133 1,088
Investment in subsidiaries 13 - - - - -
Deferred tax asset 15 953 956 907 - -
TOTAL NON-CURRENT ASSETS 3,612 3,658 3,629 1,253 1,275
Inventories 17 681 773 47 - -
Trade and other receivables 18 3,661 2,438 2,525 9,830 9,147
Cash and cash equivalents 19 944 2,143 557 380 1,716
TOTAL CURRENT ASSETS 5,286 5,354 3,129 10,210 10,863
Assets 0f disposal groups clasified as held for sale - - 170 - -
Non current receivable 18 424 484 - - -
TOTAL ASSETS 9,322 9,496 6,928 11,463 12,138
Called up share capital 20 331 16,278 14,540 331 16,278
Share premium account - 14,069 9,577 - 14,069
Merger relief reserve - 300 300 - 300
Share based payment reserve 1,043 1,050 978 1,043 1,050
Equity reserve on convertible loan notes - - 423 - -
Revaluation reserve 139 139 133 139 139
Retained earnings:
At 1 January (24,409) (23,830) (22,688) (20,957) (18,468)
(Loss)/profit for the year (1,921) (577) (1,290) (2,389) (2,504)
Other changes in retained earnings 32,670 15 148 32,653 15
At 31 December 6,340 (24,392) (23,830) 9,307 (20,957)
(DEFICIT)/EQUITY ATTRIBUTABLE TO:
OWNERS OF THE COMPANY 7,853 7,444 2,121 10,820 10,879
NON CONTROLLING INTEREST (390) (385) (232) - -
TOTAL (DEFICIT)/EQUITY 7,463 7,059 1,889 10,820 10,879
Lease liability 22 12 29 - 5 13
Borrowings - - 2,510 - -
TOTAL NON-CURRENT LIABILITIES 12 29 2,510 5 13
Contractual liabilities 23 87 100 73 - -
Trade and other payables 23 1,760 2,308 2,456 638 1,246
TOTAL CURRENT LIABILITIES 1,847 2,408 2,529 638 1,246
Liabilities of disposal group classified as held for sale - - - -
TOTAL LIABILITIES 1,859 2,437 5,039 643 1,259
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 9,322 9,496 6,928 11,463 12,138
The accompanying notes form part of these financial statements. The Company
has taken advantage of the exemption under Section 408 of the Companies Act
2006 from presenting its own profit and loss account. The Company made a loss
of £2,348,000 in 2021, (2020: £2,545,000 restated loss). The Group and
Company financial statements were approved by the Board and authorised for
issue on 28 April 2022 and signed on its behalf by:
Peter
Fowler
Mark L W Hughes
Director
Director
Westminster Group PLC
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Called up share capital Share premium account Merger relief reserve Share based payment reserve Revaluation reserve Equity reserve on convertible loan note Retained earnings Total Non-controlling interest Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
AS AT 1 JANUARY 2021 as previously stated 16,278 14,069 300 1,050 139 0 (24,242) 7,594 (535) 7,059
Prior year adjustment (Note 28) - - - - - (150) (150) 150 -
AS AT 1 JANUARY 2021 16,278 14,069 300 1,050 139 0 (24,392) 7,444 (385) 7,059
Shares issued for cash 44 2,456 - - - - - 2,500 - 2,500
Cost of share issues - (179) - - - - - (179) - (179)
Lapse of share options - - - (7) - - 7 - - -
Exercise of warrants and share options - 9 - - - - - 9 - 9
Capital Reduction (15,991) (16,355) (300) - - - 32,646 - - -
TRANSACTIONS WITH OWNERS (15,947) (14,069) (300) (7) - - 32,653 2,330 - 2,330
Total comprehensive expense for the year - - - - - - (1,921) (1,921) (5) (1,926)
AS AT 31 DECEMBER 2021 331 - - 1,043 139 - 6,340 7,853 (390) 7,463
Westminster Group PLC
Consolidated Statement of Changes in Equity
For the year ended 31 December 2020
Called up share capital Share premium account Merger relief reserve Share based payment reserve Revaluation reserve Equity reserve on convertible loan note Retained earnings Total Non-controlling interest Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
AS AT 1 JANUARY 2020 as previously stated 14,540 9,577 300 978 133 423 (23,697) 2,254 (365) 1,889
Prior year adjustment - - - - - (133) (133) 133
AS AT 1 JANUARY 2020 14,540 9,577 300 978 133 423 (23,830) 2,121 (232) 1,889
Shares issued for cash 1,525 5,225 - - - - - 6,750 - 6,750
Cost of share issues - (733) - - - - - (733) - (733)
Share based payment charge - - - 87 - - - 87 - 87
Lapse of share options - - - (15) - - 15 - - -
Exercise of warrants and share options 213 - - - - - - 213 - 213
Revaluation of freehold property - - - - 6 - - 6 - 6
CLN Movement - - - - - (423) - (423) - (423)
TRANSACTIONS WITH OWNERS 1,738 4,492 - 72 6 (423) 15 5,900 - 5,900
Total comprehensive expense for the year - - - - - - (577) (577) (153) (730)
AS AT 31 DECEMBER 2020 16,278 14,069 300 1,050 139 - (24,392) 7,444 (385) 7,059
Westminster Group PLC
Company Statement of Changes in Equity
For the year ended 31 December 2021
Called up share capital Share premium account Merger relief reserve Share based payment reserve Revaluation reserve Equity reserve on convertible loan note Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
AS AT 1 JANUARY 2021 16,278 14,069 300 1,050 139 - (20,957) 10,879
Shares issued for cash 44 2,456 - - - - - 2,500
Cost of share issues - (179) - - - - - (179)
Share based payment charge - - - - - - - -
Lapse of Share Options - - - (7) - - 7 -
Exercise of warrants and share options - 9 - - - - - 9
Capital Reduction (15,991) (16,355) (300) - - - 32,646 -
TRANSACTIONS WITH OWNERS (15,947) (14,069) (300) (7) - - 32,653 2,330
Total comprehensive expense for the year - - - - - - (2,389) (2,389)
AS AT 31 DECEMBER 2021 331 - - 1,043 139 - 9,307 10,820
AS AT 1 JANUARY 2020 14,540 9,577 300 978 133 12 (18,468) 7,072
Shares issued for cash 1,525 5,225 - - - - - 6,750
Cost of share issues - (733) - - - - - (733)
Share based payment charge - - - 87 - - - 87
Lapse of Share Options - - - (15) - - - (15)
Exercise of warrants and share options 213 - - - - - - 213
Revaluation of freehold property - - 6 - - 6
CLN Movement - - - - - (12) - (12)
Other movements in Equity - - - - - - 15 15
TRANSACTIONS WITH OWNERS 1,738 4,492 - 72 6 (12) 15 6,311
Total comprehensive expense for the year - - - - - - (2,504) (2,504)
AS AT 31 DECEMBER 2020 16,278 14,069 300 1,050 139 - (20,957) 10,879
Consolidated Cash Flow Statement
For the year ended 31 December 2021
2021 2020
Total Total
Note £'000 £'000
(LOSS) / PROFIT AFTER TAX (1,931) (730)
Taxation 11 (31)
(LOSS) / PROFIT BEFORE TAX (1,920) (761)
Non-cash adjustments 24 244 (59)
Net changes in working capital 24 (1,632) (1,033)
NET CASH USED IN OPERATING ACTIVITIES (3,308) (1,853)
INVESTING ACTIVITIES:
Purchase of property, plant and equipment 11 (160) (111)
Purchase of intangible assets 10 (41) (121)
CASH OUTFLOW FROM INVESTING ACTIVITIES (201) (232)
CASHFLOWS FROM FINANCING ACTIVITIES:
Gross proceeds from the issues of ordinary shares 2,509 6,963
Costs of share issues (179) (733)
Repayment of convertible loan note - (2,222)
Reduction in finance lease debt (17) (69)
Finance cost on lease liabilities (3) (5)
CLN and other interest paid - (262)
Other loan repayments, including interest - (1)
CASH INFLOW FROM FINANCING ACTIVITIES 2,310 3,671
Net change in cash and cash equivalents (1,199) 1,586
CASH AND EQUIVALENTS AT BEGINNING OF YEAR 2,143 557
CASH AND EQUIVALENTS AT END OF YEAR 19 944 2,143
Company Cash Flow Statement
For the year ended 31 December 2021
Company Company
2021 2020
Note £'000 £'000
(LOSS)/PROFIT AFTER TAX (2,389) (2,545)
Other Non-cash adjustments 24 140 583
Net changes in working capital 24 (1,291) (1,811)
NET CASH (USED IN) /FROM OPERATING ACTIVITIES (3,540) (3,773)
INVESTING ACTIVITIES:
Purchase of property, plant and equipment 11 (111) (62)
Purchase of intangible assets 10 (6) (121)
CASH OUTFLOW FROM INVESTING ACTIVITIES (117) (183)
CASHFLOWS FROM FINANCING ACTIVITIES:
Gross proceeds from the issues of ordinary shares 2,509 6,963
Costs of share issues (179) (733)
Repayment of convertible loan note - (190)
Change in lease debt (8) (20)
Finance cost on lease liabilities (1) (2)
Interest paid - (374)
CASH INFLOW FROM FINANCING ACTIVITIES 2,321 5,644
Net change in cash and cash equivalents (1,336) 1,688
CASH AND EQUIVALENTS AT BEGINNING OF YEAR 1,716 28
CASH AND EQUIVALENTS AT END OF YEAR 380 1,716
The accompanying notes form part of these financial statements.
Notes to the Financial Statements
1. General information and nature of operations
Westminster Group PLC ("the Company") was incorporated on 7 April 2000 and is
domiciled and incorporated in the United Kingdom and quoted on AIM. The
Group's financial statements for the year ended 31 December 2021 consolidate
the individual financial statements of the Company and its subsidiaries. The
Group design, supply and provide on-going advanced technology solutions and
services to governmental and non-governmental organisations on a global basis.
2. Summary of significant accounting policies
Basis of preparation
The Group financial statements have been prepared and approved by the
Directors in accordance with UK adopted International Accounting Standards.
The Parent Company has elected to prepare its financial statements in
accordance with IFRS. The Company has taken advantage of the exemption under
Section 408 of the Companies Act 2006 from presenting its own profit and loss
account. This announcement does not represent the statutory financial
statements of the company. The auditors have reported on the financial
statements and their report is unqualified.
The financial information is presented in the Company's functional currency,
which is British pounds sterling ('GBP') since that is the currency in which
the majority of the Group's transactions are denominated.
Basis of measurement
The financial statements have been prepared under the historical cost
convention with the exception of certain items which are measured at fair
value as disclosed in the accounting policies below.
Consolidation
(i) Basis of consolidation
The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries for the year ended 31 December 2021.
(ii) Subsidiaries
Where the company has control over an investee, it is classified as a
subsidiary. The company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
De-facto control exists in situations where the company has the practical
ability to direct the relevant activities of the investee without holding the
majority of the voting rights. In determining whether de-facto control exists
the company considers all relevant facts and circumstances, including:
· The size of the company's voting rights relative to both the size
and dispersion of other parties
· who hold voting rights
· Substantive potential voting rights held by the company and by
other parties
· Other contractual arrangements
· Historic patterns in voting attendance.
The consolidated financial statements present the results of the company and
its subsidiaries ("the Group") as if they formed a single entity.
Intercompany transactions and balances between group companies are therefore
eliminated in full.
The consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the statement of financial
position, the acquiree's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the acquisition
date. The results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is obtained.
They are deconsolidated from the date on which control ceases.
(iii) Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and losses or income and expenses
arising from intragroup transactions are eliminated in preparing the
consolidated financial statements.
(iv) Company financial statements
Investments in subsidiaries are carried at cost less provision for any
impairment. Dividend income is recognised when the right to receive payment is
established.
Going concern
The Group made a loss during the period of £1,931,000 (2020: £730,000), The
cash outflow from operating activities during the year was £3,308,000 (2020:
Outflow £2,023,000), which was partly financed through raising new equity.
The financial statements are prepared on a going concern basis. In assessing
whether the going concern assumption is appropriate, management have taken
into account all relevant available information about the current and future
position of the Group, including new long-term contracts. As part of its
assessment, management have taken into account the profit and cash forecasts,
the continued support of the shareholders and the Directors' and management's
ability to affect costs and revenues. Management regularly forecast results,
the financial position and cash flows for the Group.
In 2020, the Directors took timely action implementing logistical and
organisational changes to consolidate the Group's resilience to Covid-19,
including a reduction in costs, risk assessments, safe working practices and
various other measures, including utilisation of governmental support schemes.
The Directors also took action to expand the Group's range of fever screening
and safety equipment, expanding its supply base and instigating targeted
marketing campaigns which has seen a significant rise in product sales
revenues mitigating reductions elsewhere in the business. The Directors
continue to monitor the situation and to update its risk assessments and
contingency planning as necessary.
Further details on measures being taken to address the challenges and
opportunities presented by Covid-19 can be found in the Chief Executive
Office's report.
The Directors have reviewed the Group's resources at the date of approving the
financial statements, and their projections for future trading, which due to
winning incremental new business give a reasonable expectation that the Group
has adequate resources to continue in operational existence for the
foreseeable future, which for the avoidance of doubt is at least 12 months
from the date of signing the financial statements. Thus, they continue to
adopt the going concern basis of accounting in the preparing the financial
statements.
Business combinations
The consideration transferred by the Group to obtain control of a subsidiary
is calculated as the sum of the acquisition date fair values of assets
transferred, liabilities incurred, and the equity interests issued by the
Group, which includes the fair value of any asset or liability arising from a
contingent consideration arrangement. Acquisition costs are expensed as
incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a
business combination regardless of whether they have been previously
recognised in the acquiree's financial statements prior to the acquisition.
Assets acquired and liabilities assumed are generally measured at their
acquisition date fair values.
Foreign currency
Items included in the financial statements of the Company are measured using
the currency of the primary economic environment in which the entity operates
- 'the functional currency'. The functional and presentation currency in these
financial statements is the Great British Pounds (GBP).
Transactions in foreign currencies are translated at the foreign exchange rate
ruling at the date of the transaction (spot exchange rate). Foreign exchange
gains and losses resulting from the settlement of such transactions and from
the re-measurement of monetary items at year-end exchange rates are recognised
in profit or loss. Non-monetary items measured at historical cost are
translated using the exchange rates at the date of the transaction and not
subsequently retranslated.
Foreign exchange gains and losses are recognised in arriving at profit before
interest and taxation (see Note 5).
Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief decision-maker. The chief decision-maker has
been identified as the Executive Board, at which level strategic decisions are
made.
An operating segment is a component of the Group;
· That engages in business activities from which it
may earn revenues and incur expenses,
· Whose operating results are regularly reviewed by
the entity's chief operating decisions maker to make decisions about resources
to be allocated to the segment and assess its performance, and
· For which discrete financial information is
available.
Revenue
Revenue recognition
Revenue represents income derived from contracts for the provision of goods
and services, over time or at a point in time, by the Group to customers in
exchange for consideration in the ordinary course of the Group's activities.
Performance Obligations
Upon approval by the parties to a contract, the contract is assessed to
identify each promise to transfer either a distinct good or service or a
series of distinct goods or services that are substantially the same and have
the same pattern of transfer to the customer. Goods and services are distinct
and accounted for as separate performance obligations in the contract if the
customer can benefit from them either on their own or together with other
resources that are readily available to the customer, and they are separately
identifiable in the contract.
Transaction price
At the start of the contract, the total transaction price is estimated as the
amount of consideration to which the Group expects to be entitled in exchange
for transferring the promised goods and services to the customer, excluding
sales taxes. Variable consideration, such as price escalation, is included
based on the expected value or most likely amount only to the extent that it
is highly probable that there will not be a reversal in the amount of the
cumulative revenue recognised. The transaction price does not include
estimates of consideration resulting from contract modifications, such as
change orders, until they have been approved by parties to the contract. The
total transaction price is allocated to the performance obligations identified
in the contract in proportion to their relative stand-alone selling prices.
Given the nature of many of the Group's products and services, which are
designed and/or manufactured under contract to customers' individual
specifications, there are typically no observable stand-alone selling prices.
Instead, stand-alone selling prices are typically estimated based on expected
costs plus contract margin consistent with the Group's pricing principles.
Whilst payment terms vary from contract to contract, an element of the
transaction price may be received in advance of delivery. The Group may
therefore have contract liabilities depending on the contracts in existence at
a period end. The Group's contracts are not considered to include significant
financing components on the basis that there is no difference between the
consideration and the cash selling price.
Revenue recognition
Revenue is recognised as performance obligations are satisfied as control of
the goods and services is transferred to the customer.
For each performance obligation within a contract the Group determines whether
it is satisfied over time or at a point in time. Performance obligations are
satisfied over time if one of the following criteria is satisfied:
· The customer simultaneously receives and consumes the benefits
provided by the Group's performance as it performs;
· The Group's performance creates or enhances an asset that the
customer controls as the asset is created or enhanced; or
· The Group's performance does not create an asset with an
alternative use to the Group and it has an enforceable right to payment for
performance completed to date.
The Group has determined that most of its contacts satisfy the overtime
criteria, either because the customer simultaneously receives and consumes the
benefits provided by the Group's performance as it performs, or the Group's
performance does not create an asset with an alternative use to the Group and
it has an enforceable right to payment for performance completed to date.
For each performance obligation recognised over time, the Group recognises
revenue using an input method, based on costs incurred in the period. Revenue
and attributable margin are calculated by reference to reliable estimates of
transaction price and total expected costs, after making suitable allowances
or technical and other risks. Revenue and associated margin are therefore
recognised progressively as costs are incurred, and as risks have been
mitigated or retired. The Group has determined that this method appropriately
depicts the Group's performance in transferring control of the goods and
services to the customer.
If the overtime criteria for revenue recognition is not met, revenue is
recognised at the point in time that control is transferred to the customer
which is usually when legal title passes to the customer and the business has
the right to payment.
When it is expected that total contract costs will exceed total contract
revenue, the expected loss is recognised immediately as an expense.
Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the
service or at the date of their origin. Expenditure for warranties is
recognised and charged against the associated provision when the related
revenue is recognised. Certain items have been disclosed as operating
exceptional due to their size and nature and their separate disclosure should
enable better understanding of the financial dynamics.
Interest income and expenses
Interest income and expenses are reported on an accruals basis using the
effective interest method.
Goodwill
Goodwill is stated after separate recognition of identifiable intangible
assets. It is calculated as the excess of the sum of a) fair value of
consideration transferred, b) the recognised amount of any non-controlling
interest in the acquiree and c) acquisition date fair value of any existing
equity interest in the acquiree, over the acquisition date fair value of
identifiable net assets. If the fair value of identifiable net assets exceeds
the sum calculated above, the excess amount (i.e., gain on a bargain purchase)
is recognised in profit or loss immediately. Goodwill is carried at cost less
accumulated impairment losses.
Property, plant and equipment
Plant and equipment, office equipment, fixtures and fittings and motor
vehicles are stated at cost less accumulated depreciation and any recognised
impairment loss.
Depreciation is charged so as to write off the cost or valuation of assets to
their residual value over their estimated useful lives, using the
straight-line method, typically at the following rates. Where certain assets
are specific for a long-term contract and the customer has an obligation to
purchase the asset at the end of the contract they are depreciated in
accordance with the expected disposal / residual value.
Rate
Freehold buildings 2%
Plant and equipment 7% to 25%
Office equipment, fixtures & fittings 20% to 33%
Motor vehicles 20%
Freehold land is not depreciated.
Leases
All leases that fall under IFRS 16 will be recorded on the balance sheet as
liabilities, at the present value of the future lease payments, along with an
asset reflecting the right to use the asset over the lease term. Rentals
payable under operating leases exempt from IFRS 16 are charged to income on a
straight-line basis over the term of the relevant lease. At inception of a
contract, the Group assesses whether a contract is, or contains, a lease based
on whether the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.
The Group recognises a right-of-use asset and a corresponding lease liability
at the lease commencement date. The lease liability is initially measured at
the present value of the following lease payments:
- fixed payments;
- variable payments that are based on index or
rate;
- the exercise price of any extension or purchase
option if reasonably certain it can be exercised; and
- penalties for terminating the lease, if
relevant.
The lease payments are discounted using the interest rate implicit in the
lease or, if that rate cannot be readily determined, the Group's incremental
borrowing rate for that type of asset.
The right-of-use assets are initially measured based on initial amount of the
lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs. The right-of-use assets are
depreciated over the period of the lease term using the straight-line method.
The lease term includes periods covered by the option to extend, if the Group
is reasonably certain to exercise that option. In addition, right-of-use
assets may during the lease term be reduced by any impairment losses, if any,
or adjusted for certain remeasurements of the lease liability.
Impairment on non-financial assets
At each reporting date, the Group reviews the carrying amounts of its
non-current assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). The recoverable amount is the higher of fair
value less costs to sell and value in use. If the recoverable amount of an
asset is estimated to be less than its carrying amount, the carrying amount of
the asset is reduced to its recoverable amount. An impairment loss is
recognised as an expense immediately, unless the relevant asset is carried at
a revalued amount, in which case the impairment loss is treated as a
revaluation decrease. Where an impairment loss subsequently reverses, the
carrying amount of the asset is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset in prior years.
Financial instruments
Financial assets
The Group's financial assets include cash and cash equivalents and loans and
other receivables. All financial assets are recognised when the Group becomes
party to the contractual provisions of the instrument. All financial assets
are initially recognised at fair value, plus transaction costs. They are
subsequently measured at amortised cost using the effective interest method,
less any impairment losses. Any changes in carrying value are recognised in
the Statement of Comprehensive Income. Interest and other cash flows resulting
from holding financial assets are recognised in the Statement of Cash Flows
when received, regardless of how the related carrying amount of financial
assets is measured.
The Group recognises a loss allowance for expected losses on financial assets
that are measured at amortised cost including trade receivables and contract
assets. The amount of expected credit losses is updated at each reporting date
to reflect changes in credit risk since initial recognition.
Cash and cash equivalents comprise cash at bank and deposits and bank
overdrafts. Bank overdrafts are shown within borrowings in current liabilities
unless a legally enforceable right to offset exists.
Financial liabilities
The Group's financial liabilities comprise trade and other payables and
borrowings. All financial liabilities are recognised initially at their fair
value and subsequently measured at amortised cost using the effective interest
method. Financial liabilities are derecognised when they are extinguished,
discharged, cancelled or expire.
Convertible loan notes with an option that leads to a potentially variable
number of shares, have been accounted for as a host debt with an embedded
derivative. The embedded derivative is accounted for at fair value through
profit and loss at each reporting date. The host debt is recognised initially
at fair value, and subsequently measured at amortised cost using the effective
interest method.
Convertible loan notes which can be converted to share capital at the option
of the holder, and where the number of shares to be issued does not vary with
changes in fair value, are considered to be a compound instrument.
The liability component of a compound instrument is recognised initially at
the fair value of a similar liability that does not have an equity conversion
option. The equity component is recognised initially at the difference between
the fair value of the compound instrument and fair value of the liability
component. Any directly attributable transaction costs are allocated to the
liability and equity components.
Financial liabilities and equity instruments issued by the Group are
classified according to the substance of the contractual arrangements entered
into and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities.
Investments and loans in subsidiaries
Subsidiary fixed asset investments are valued at cost less provision for
impairment. The Group applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss allowance for all
investment and loans in subsidiaries.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of
ordinarily interchangeable items are assigned using the first in, first out
cost formula. Costs principally comprise of materials and bringing them to
their present location. Net realisable value represents the estimated selling
price less all estimated costs to completion and costs to be incurred in
marketing, selling and distribution.
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax. Current and deferred tax are recognised as an expense or income in profit
or loss, except in respect of items dealt with through equity, in which case
the tax is also dealt with through equity.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the Statement of Comprehensive
Income because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable
or deductible. The Group's liability for current tax is calculated by using
tax rates that have been enacted or substantively enacted by the balance sheet
date.
Deferred tax is the tax expected to be payable or recoverable on material
differences between the carrying amount of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation
of taxable profit and is accounted for using the balance sheet liability
method. Deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction which affects
neither the tax profit not the accounting profit.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks, other short-term highly liquid investments with original maturities of
three months or less, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities unless a legally enforceable right to offset
exists.
Equity, reserves and dividend payments
Share capital represents the nominal value of shares that have been issued.
Share premium includes any premiums received on issue of share capital. Any
transaction costs associated with the issuing of shares are deducted from
share premium, net of any related income tax benefits.
Merger relief reserve includes any premiums on issue of share capital as part
or all of the consideration in a business combination.
The share-based payment reserve represents equity-settled share-based employee
remuneration until such share options are exercised or lapse. It also includes
the equity settled items such as warrants for services rendered accounted for
in accordance with IFRS 2.
The revaluation reserve within equity comprises gains and losses due to the
revaluation of property, plant and equipment.
Retained earnings include all current and prior period retained profits and
losses.
Dividend distributions payable to equity shareholders are included in
liabilities when the dividends have been approved in a general meeting prior
to the reporting date.
Pensions
The Group operates a defined contribution pension scheme for employees in the
UK and is operating under auto enrolment. Local labour in Africa benefit from
a termination payment on leaving employment. The expected value of this is
accrued on a monthly basis.
Share-based compensation (Employee Based Benefits)
The Group operates an equity-settled share-based compensation plan. The fair
value of the employee services received in exchange for the grant of options
is recognised as an expense over the vesting period, based on the Group's
estimate of awards that will eventually vest, with a corresponding increase in
equity as a share-based payment reserve. For plans that include market-based
vesting conditions, the fair value at the date of grant reflects these
conditions and are not subsequently revisited.
Fair value is determined using Black-Scholes option pricing models. Non-market
based vesting conditions are included in assumptions about the number of
options that are expected to vest. At each reporting date, the number of
options that are expected to vest is estimated. The impact of any revision of
original estimates, if any, is recognised in profit or loss, with a
corresponding adjustment to equity, over the remaining vesting period.
The proceeds received when vested options are exercised, net of any directly
attributable transaction costs, are credited to share capital (nominal value)
and share premium.
Share-based payments
The Group has two types of share-based payments other than employee
compensation.
Warrants issued for services rendered which are accounted for in accordance
with IFRS 2 recognising either the cost of the service if it can be reliably
measured or the fair value of the warrant (using Black-Scholes option pricing
models).
Warrants issued as part of Share Issues have been determined as equity
instruments under IAS 32. Since the fair value of the shares issued at the
same time is equal to the price paid, these warrants, by deduction, are
considered to have been issued at nil value.
Provisions
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of a past event which it is probable will result in an
outflow of economic benefits that can be reliably estimated.
SIGNIFICANT MANAGEMENT JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
The following are significant management judgements in applying the accounting
policies of the Group that have the most significant effect on the financial
statements.
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ('the functional currency'). The Board has judged that
because most of the Group's costs and a substantial part of its sales are
situated in the UK.
Goodwill
Goodwill (note 9) has been tested for impairment by considering its net
present value for the expected income stream in perpetuity at a discount rate
judged to be 5% based on the normal lending rate we are offered leases at,
which management consider is a good surrogate for cost of capital. It was also
established that 34% (2020: 20%) is the discount rate at which no impairment
still would be needed. The income is assumed to be flat and stable for the
purpose of this test. Goodwill which does not show a net present value
higher than its carrying cost will be impaired.
Deferred tax asset
Deferred tax assets (note 16) are recognised to the extent that it is probable
that taxable profits will be available against which deductible temporary
differences can be utilised. The Directors have prepared projections for the
next five years based on the best available evidence and have concluded that
this deferred tax asset will be utilised in the future.
Subsidiary intercompany balances
Intercompany balances are stated at full value if the subsidiary is continuing
to trade and a reasonable projection indicates that the subsidiary will be
able to repay the balance at some time in the future, Dormant subsidiaries
owing money to the group are therefore fully impaired.
SIGNIFICANT MANAGEMENT ESTIMATES IN APPLYING ACCOUNTING POLICIES
The following are significant management estimates in applying the accounting
policies of the Group that have the most significant effect on the financial
statements.
Revalued freehold property
The freehold property is stated at fair value. A full revaluation exercise was
carried out in December 2020. The fair value is based on market value, being
the estimated amount for which a property could be exchanged on the date of
valuation between a willing buyer and a willing seller in an arm's length
transaction after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion. The Directors are of the
opinion that the 2020 valuation has not moved materially since the last
valuation was performed. The valuation was not materially different to the
value the asset is recorded at the balance sheet date.
New standards, amendments and interpretations
The following new standards have been adopted:
Income Taxes (Amendments to IAS 12)
This implements a so-called 'comprehensive balance sheet method' of accounting
for income taxes which recognizes both the current tax consequences of
transactions and events and the future tax consequences of the future recovery
or settlement of the carrying amount of an entity's assets and liabilities.
Differences between the carrying amount and tax base of assets and
liabilities, and carried forward tax losses and credits, are recognized, with
limited exceptions, as deferred tax liabilities or deferred tax assets, with
the latter also being subject to a 'probable profits' test. The amendments are
effective for annual reporting periods beginning on or after January 1, 2023,
but have been adopted early.
Standards amendments and interpretations in issue not yet effective
IAS 1 Presentation of Financial Statements
IAS 1 "Presentation of Financial Statements" sets out the overall requirements
for financial statements, including how they should be structured, the minimum
requirements for their content and overriding concepts such as going concern,
the accrual basis of accounting and the current/non-current distinction. The
standard requires a complete set of financial statements to comprise a
statement of financial position, a statement of profit or loss and other
comprehensive income, a statement of changes in equity and a statement of cash
flows. The amendments are effective for annual periods beginning on or after
January 1, 2023.
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
This standard is applied in selecting and applying accounting policies,
accounting for changes in estimates and reflecting corrections of prior period
errors. The standard requires compliance with any specific IFRS applying to a
transaction, event or condition, and provides guidance on developing
accounting policies for other items that result in relevant and reliable
information. Changes in accounting policies and corrections of errors are
generally retrospectively accounted for, whereas changes in accounting
estimates are generally accounted for on a prospective basis. The amendments
are effective for annual periods beginning on or after January 1, 2023.
IFRS 17 Insurance Contracts
IFRS 17 requires insurance liabilities to be measured at a current fulfilment
value and provides a more uniform measurement and presentation approach for
all insurance contracts. These requirements are designed to achieve the goal
of a consistent, principle-based accounting for insurance contracts. IFRS 17
supersedes IFRS 4 Insurance Contracts as of 1 January 2023. This is not
applicable to the Group.
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
IFRS 3 "Business Combinations" outlines the accounting when an acquirer
obtains control of a business (e.g., an acquisition or merger). Such business
combinations are accounted for using the 'acquisition method', which generally
requires assets acquired and liabilities assumed to be measured at their fair
values at the acquisition date. The amendments aim to promote consistency in
applying the requirements by helping companies determine whether, in the
statement of financial position, debt and other liabilities with an uncertain
settlement date should be classified as current (due or potentially due to be
settled within one year) or non-current. This will apply for annual reporting
periods beginning on or after 1 January 2023.
Reference to the Conceptual Framework (Amendments to IFRS 3)
The amendments update an outdated reference to the Conceptual Framework in
IFRS 3 without significantly changing the requirements in the standard. If
endorsed this will apply for annual reporting periods beginning on or after 1
January 2022.
Property, Plant and Equipment - Proceeds before Intended Use (Amendments to
IAS 16)
The amendments prohibit deducting from the cost of an item of property, plant
and equipment any proceeds from selling items produced while bringing that
asset to the location and condition necessary for it to be capable of
operating in the manner intended by management. Instead, an entity recognises
the proceeds from selling such items, and the cost of producing those items,
in profit or loss. This will apply for annual reporting periods beginning on
or after 1 January 2022.
Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)
The amendments specify that the 'cost of fulfilling' a contract comprises the
'costs that relate directly to the contract'. Costs that relate directly to a
contract can either be incremental costs of fulfilling that contract (examples
would be direct labour, materials) or an allocation of other costs that relate
directly to fulfilling contracts (an example would be the allocation of the
depreciation charge for an item of property, plant and equipment used in
fulfilling the contract). If endorsed this will apply for annual reporting
periods beginning on or after 1 January 2022.
Alternative performance measures (APM)
In the reporting of financial information, the Directors have adopted the APM
'EBITDA profit from underlying continuing and discontinued operations (APMs
were previously termed 'Non-GAAP measures'), which is not defined or specified
under International Financial Reporting Standards (IFRS).
The Directors also look at recurring revenue as a key performance indicator.
This is revenue arising from multi-year contracts.
These measures are not defined by IFRS and therefore may not be directly
comparable with other companies' APMs, including those in the Group's
industry.
APMs should be considered in addition to, and are not intended to be a
substitute for, or superior to, IFRS measurements.
Purpose
The Directors believe that this APM assists in providing additional useful
information on the underlying trends, performance and position of the Group.
This APM is also used to enhance the comparability of information between
reporting periods and business units, by adjusting for non-recurring or
uncontrollable factors which affect IFRS measures, to aid the user in
understanding the Group's performance.
Consequently, APMs are used by the Directors and management for performance
analysis, planning, reporting and incentive setting purposes and this remains
consistent with the prior year.
The key APM that the Group has focused on is as follows: EBITDA profit from
underlying continuing and discontinued operations': This is the headline
measure used by management to measure the Group's performance and is based on
operating profit before the impact of financing costs, share based payment
charges, depreciation, amortisation, impairment charges and exceptional items.
Exceptional items relate to certain costs that derive from events or
transactions that fall within the normal activities of the Group but which,
individually or, if of a similar type, in aggregate, are excluded by virtue of
their size and nature in order to reflect management's view of the performance
of the Group.
3. Segment reporting
Operating segments
The Board considers the Group on a Business Unit basis. Reports by Business
Unit are used by the chief decision-makers in the Group. The Business Units
operating during the year are the two operating divisions; Services and
Technology. This split of business segments is based on the products and
services each offer.
Managed Services Technology Group and Central Group Total
2021 £'000 £'000 £'000 £'000
Supply of products - 1,156 - 1,156
Supply and installation contracts - 329 - 329
Maintenance and services 4,981 395 - 5,376
Training courses 100 90 - 190
Revenue 5,081 1,970 - 7,051
Segmental underlying EBITDA^ 1,106 (365) (2,414) (1,673)
Depreciation & amortisation (97) (9) (138) (244)
Segment operating result 1,009 (374) (2,552) (1,917)
Finance cost - - (3) (3)
Profit/ (loss) before tax 1,009 (374) (2,555) (1,920)
Income tax benefit / (charge) (11) - - (11)
Profit/(loss) for the financial year 998 (374) (2,555) (1,931)
Segment assets 4,785 1,324 3,213 9,322
Segment liabilities 1,056 378 425 1,859
Capital expenditure 83 1 117 201
^ This is an Alternative Performance Measure refer to Note 2 for further
detail
Managed Services Technology Group and Central Group Total
2020 £'000 £'000 £'000 £'000
Supply of products - 4,237 - 4,237
Supply and installation contracts - 1,039 - 1,039
Maintenance and services 4,259 312 - 4,571
Training courses 98 - - 98
Revenue 4,357 5,588 - 9,945
Segmental underlying EBITDA^ 655 781 (1,955) (519)
Exceptional items (note 4) - - - -
Depreciation & amortisation (136) (9) (80) (225)
Segment operating result 519 772 (2,035) (744)
Finance cost (1) - (16) (17)
Profit/ (loss) before tax 518 772 (2,051) (761)
Income tax charge 51 (2) (18) 31
Profit/(loss) for the financial year 569 770 (2,069) (730)
Segment assets 5,255 1,392 2,849 9,496
Segment liabilities 912 694 831 2,437
Capital expenditure 39 10 134 183
Geographical areas
The Group's international business is conducted on a global scale, with agents
present in all major continents. The following table provides an analysis of
the Group's sales by geographical market, irrespective of the origin of the
goods/services.
2021 2020
£'000 £'000
UK and Europe 2,161 2,056
Africa 4,296 4,172
Middle East 122 508
Rest of World 472 3,209
Total 7,051 9,945
Some of the Group's assets are located outside the United Kingdom where they
are being put to operational use on specific contracts.
Information about major customers
No single customer contributed more than 10% of the Group revenue in 2021.
In 2020 included in revenues arising from the Technology Solutions in the
"Rest of World" are revenues of approximately £1,284,000 for the provision of
advanced screening of containers at ports in Asia.
^ This is an Alternative Performance Measure refer to Note 2 for further
details
4. Finance costs
Group Group
2021 2020
£'000 £'000
Finance cost on lease liabilities (3) (5)
Interest payable on bank and other borrowings - (1)
Interest paid on convertible loan notes (Note 15) - (262)
Other movement on convertible loan notes - 251
Total finance benefit / (costs) (3) (17)
5. Loss from operations
The following items have been included in arriving at the loss for the
financial year
Group Group
2021 2020
£'000 £'000
Staff costs (see Note 7) 4,369 3,887
Depreciation of property, plant and equipment (see Note 11) 166 162
Amortisation of intangible assets (see Note 10) 78 63
Operating lease rentals payable
Short term Leases 89 96
Foreign exchange loss/(gain) 132 (43)
Auditor's remuneration
Amounts payable in 2021 years relate to PKF in respect of audit and other
services. The local Audit in Sierra Leone is performed by Moore Sierra Leone
(both years). The local audit in Ghana is performed by PKF Ghana.
Audit services Group Group
2021 2020
£'000 £'000
Statutory audit of parent and consolidated financial statements 46 46
Review of Interim Results 2 2
- Statutory audit of subsidiaries of the company pursuant to 20 20
legislation
Taxation services including research and development tax credits - -
Total payable to PKF Littlejohn UK 68 68
Local audit in Sierra Leone - Moore Sierra Leone 18 18
Local audit in Ghana - PKF Ghana 1 1
Total fees 87 87
6. Taxation
Analysis of tax charge / (credit) in year
The Finance Act 2020 set the Corporation Tax main rate at 19% for the
financial year beginning 1 April 2020. Deferred taxes at the balance sheet
date have been measured using a 19% tax rate and reflected in these financial
statements.
£'000 £'000
2021 2020
Current year £'000 £'000
UK Corporation tax on profits in the year - -
Potential foreign corporation tax on profits in the year 8 18
Deferred Tax (Note 16)
Foreign entity deferred tax 3 (49)
Review of expected utilisation of Losses - -
11 (31)
Group Group
2021 2020
£'000 £'000
Reconciliation of effective tax rate
Loss on ordinary activities before tax (1,920) (761)
Loss on ordinary activities multiplied by the standard rate of corporation tax (365) (145)
in the UK of 19% (2020: 19%)
Effects of:
Expenses not deductible for tax purposes 20 (158)
Foreign entity deferred tax movement (Note 16) 3 (49)
Unrecognised losses carried forward 353 320
Total tax - credit 11 (31)
For further details on Tax refer to Note 16.
7. Employee costs
Employee costs for the Group during the year
Group
2021 2020
£'000 £'000
Wages and salaries 4,083 3,757
Pension contributions 68 60
Social security costs 359 284
4,510 4,101
Share based payments - -
4,510 4,101
Job retention support (141) (214)
Net Cost 4,369 3,887
The Group operates a stakeholder pension scheme. The Group made pension
contributions totalling £68,000 during the year (2020: £60,000), and pension
contributions totalling £15,000 were outstanding at the year-end (2020:
£13,000).
Details of the Directors' remuneration are included in the Remuneration
Committee Report. Key management within the business are considered to be the
Board of Directors. The total Directors' remuneration during the year was
£656,000 (2020: £614,000) and the highest paid director received
remuneration totalling £196,000 (2020: £196,000).
Average monthly number of people (including Executive Directors) employed
Group 2021 2020
By function:
Sales 10 7
Operations 197 198
Administration 24 24
Management 10 10
241 239
8. Loss per share
Earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
For diluted earnings per share the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. Only those outstanding options that have an exercise price below the
average market share price in the year have been included.
The weighted average number of ordinary shares is calculated as follows:
2021 2020
'000 '000
Issued ordinary shares
Start of year 286,528 145,403
Effect of shares issued during the year 23,576 17,245
Weighted average basic and diluted number of shares for year 310,104 162,648
2021 2020
£'000 £'000
Earnings
Loss and total comprehensive expense (1,931) (730)
For the year ended 31 December 2021 and 2020 the issue of additional shares on
exercise of outstanding share options, convertible loans and warrants would
decrease the basic loss per share and there is therefore no dilutive effect.
Loss per share was 0.62p (2020 Loss 0.45p).
9. Goodwill
Group 2021 2020
£'000 £'000
Gross carrying amount at 1 January 1,377 1,377
Acquisition in year - -
1,377 1,377
Accumulated impairment at 1 January (763) (763)
Impairment charge for the year - -
Accumulated impairment at 31 December (763) (763)
Carrying amount at 1 January 614 614
Carrying amount at 31 December 614 614
The goodwill balance relates to the acquisition of Longmoor Security Limited,
Keyguard U.K Limited and Euro-Ops SARL.
The Group tests goodwill annually for impairment, or more frequently if there
are indications that goodwill may be impaired. The recoverable amounts of the
cash-generating unit are determined from value in use calculations. The key
assumptions are discount rate (5%) future revenues (assumed as flat) derived
from the most recent 2021 financial budgets approved by management. The
projection assumes that the companies are held in perpetuity. A discount
rate of 34% (2020: 20%) would not result in any impairment based on
management's latest forecast.
No reasonably possible change in any of the estimates and assumptions used in
the impairment test would give rise to a material impairment.
10. Other intangible assets
Group Website and Software Company Website and Software
2021
£'000 £'000
Cost
At 1 January 2021 415 404
Additions 41 6
Disposals (56) (46)
At 31 December 2021 400 364
Accumulated amortisation and impairment
At 1 January 2021 228 217
Charge for the year 78 73
Disposals (56) (46)
At 31 December 2021 250 244
Net book value at 31 December 2021 150 120
2020
£'000 £'000
Cost
At 1 January 2020 297 286
Additions 121 121
Disposals (3) (3)
At 31 December 2020 415 404
Accumulated amortisation and impairment
At 1 January 2020 168 158
Charge for the year 63 62
Disposals (3) (3)
At 31 December 2020 228 217
Net book value at 31 December 2020 187 187
11. Property, plant and equipment
Group Freehold property Plant and equipment Office equipment, fixtures and fittings Motor vehicles Right of use assets Total
2021 £'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation
At 1 January 2021 1,079 766 1,018 78 164 3,105
Additions 47 10 45 34 24 160
Disposals - (8) (5) (3) (15) (31)
Revaluation - - - - - -
At 31 December 2021 1,126 768 1,058 109 173 3,234
Accumulated depreciation and impairment
At 1 January 2021 59 519 451 75 100 1,204
Charge for the year 22 46 50 5 43 166
Disposals - (8) (5) (3) (15) (31)
At 31 December 2021 81 557 496 77 128 1,339
Net book value at 31 December 2021 1,045 211 562 32 45 1,895
2020 £'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation
At 1 January 2020 1,039 727 998 164 260 3,188
Additions 34 40 37 - - 111
Disposals - (1) (17) (86) (96) (200)
Revaluation 6 - - - - 6
At 31 December 2020 1,079 766 1,018 78 164 3,105
Accumulated depreciation and impairment
At 1 January 2020 38 476 428 160 107 1,209
Charge for the year 21 44 41 1 55 162
Disposals - (1) (18) (86) (62) (167)
At 31 December 2020 59 519 451 75 100 1,204
Net book value at 31 December 2020 1,020 247 567 3 64 1,901
Right of use assets (motor vehicles) above have been created in accordance
with IFRS 16. Motor vehicles are leased for certain employees for lease
terms ranging between 3-5 years with fixed payments. The Group does not
purchase or guarantee the future value of lease vehicles.
The freehold property was valued professionally by White Commercial, Chartered
Surveyors, as at 31 December 2020, which provided a valuation of £1,020,000.
The valuation was made on the basis of recent market transactions on arm's
length terms and on an alternative use basis. The Revaluation Reserve is not
available for distribution to shareholders. The Directors are of the opinion
that the valuation has not moved materially since the last valuation was
performed. The valuation was not materially different to the value the asset
is recorded at the balance sheet date.
Company Freehold property Plant and equipment Office equipment, fixtures and fittings Right of use assets Total
2021 £'000 £'000 £'000 £'000 £'000
Cost or valuation
At 1 January 2021 1,079 18 202 76 1,375
Additions 47 5 35 24 111
Disposals - - - - -
Revaluation - - - - -
At 31 December 2021 1,126 23 237 100 1,486
Accumulated depreciation and impairment
At 1 January 2021 59 16 167 45 287
Charge for the year 22 2 17 25 66
Disposals - - - - -
At 31 December 2021 81 18 184 70 353
Net book value at 31 December 2021 1,045 5 53 30 1,133
2020 £'000 £'000 £'000 £'000 £'000
Cost or valuation
At 1 January 2020 1,039 15 195 84 1,333
Additions 34 3 25 - 62
Disposals - - (18) (8) (26)
Revaluation 6 - - - 6
1,079 18 202 76 1,375
Accumulated depreciation and impairment
At 1 January 2020 38 15 175 26 254
Charge for the year 21 1 10 19 51
Disposals - - (18) - (18)
At 31 December 2020 59 16 167 45 287
Net book value at 31 December 2020 1,020 2 35 31 1,088
The freehold property was valued professionally by White Commercial, Chartered
Surveyors, as at 31 December 2020, which provided a valuation of £1,020,000.
The valuation was made on the basis of recent market transactions on arm's
length terms and on an alternative use basis. The Directors are of the opinion
that the valuation has not moved materially since the last valuation was
performed. The valuation was not materially different to the value the asset
is recorded at the balance sheet date. The Revaluation Reserve is not
available for distribution to shareholders.
No depreciation has been charged on the freehold land only building additions
have been depreciated. The difference between the net book value of the total
freehold property if depreciation, at 2%, had been charged as shown in the
financial statements is not materially different to the value the asset is
recorded at the balance sheet date.
The freehold property is stated at valuation, the comparable historic cost and
depreciation values are as follows: This depreciation is charged on historical
cost only.
2021 2020
£'000 £'000
Historical cost 803 756
Accumulated depreciation
At 1 January 308 293
Charge for the year 16 15
At 31 December 324 308
Net book value as at 31 December 479 448
12. Lease commitments
The Group accounts for operating leases under IFRS 16. There are some leases
of small value or less than one-year duration which have been charged to
expenses as incurred, but the aggregate commitment of these leases is
immaterial.
Right to use assets
2021 2020
At 1 January 67 158
Additions 24 -
Expensed in the year (47) (91)
As at 31 December 44 67
Of which
Current Lease 32 38
Non-Current 12 29
44 67
13. Investment in subsidiaries
All loans relate to cash movements between Group companies and are repayable
on demand. Loans and other intercompany accounts are included in the Company's
respective current payables or receivables. This is because they are more in
the nature of current assets and current liabilities than longer term
investments.
Company 2021 2020
Investments Investments
Cost £'000 £'000
At 1 January 2020 389 389
Movement in Year - -
At 31 December 389 389
Accumulated impairment
At 1 January 2020 (389) (389)
Movement in Year - -
At 31 December (389) (389)
Investment in subsidiaries - -
A sum of £8,643,000 (2020: £7,915,000) has been recognised in receivables;
and £219,000 (2020: £735,000) has been recognised in payables.
14. Subsidiary undertakings
The subsidiary undertakings at 31 December 2021 were as follows:
Name Country of incorporation Principal activity % of nominal ordinary share capital and voting rights held
Westminster International Limited England Advanced security technology, (Technology Division) 100
Westminster Services Limited (formerly Longmoor Security Limited) England Close protection training and provision of security services (Managed 100
Services)
Westminster Aviation Security Services Limited England Managed services of airport security under long term contracts. (Managed 100
Services)
Sovereign Ferries Limited England Dormant 100
Westminster Operating Limited England Special purpose vehicle which exists solely for listing the 2013 CLN on the 100
CISX. Year end 31 October. Only transactions are intra group
Keyguard U.K Limited England Security and risk management including manned guarding, mobile patrols, risk 100
management and K9 services.
Longmoor (SL) Limited Sierra Leone Security and terminal guarding 100
Facilities Operations Management Limited Sierra Leone Infrastructure management 100
Westminster Sierra Leone Limited * Sierra Leone Local infrastructure for airport operations 49
Westminster Group GmbH Germany Dormant 100
GLIS Gesellschaft für Luftfahrt- und Infrastruktur-Sicherheit GmbH Germany Managed Services 85
Westminster Sicherheit GmbH Germany Dormant 85
Euro Ops SARL France Managed Services infrastructure 100
Westminster Maritime Services Limited # England Dormant 100
CTAC Limited England Dormant 100
Longmoor Security Services Limited (formerly Westminster Aviation Security England Dormant 100
Services (ME) Limited)
Westminster International (Ghana) Limited Ghana Dormant 90
Westminster Aviation Security Services RDC SARLU DRC Managed services of airport security under long term contracts. (Managed 100
Services)
Westminster Liberia LLC Liberia Managed services of port security under long term contracts. (Managed 100
Services)
Subsidiary company registered addresses:
England Westminster House, Blacklocks Hill,
Banbury, Oxfordshire, OX17 2BS, United Kingdom.
Sierra Leone 60 Wellington Street, Freetown, Sierra
Leone.
Germany Chiemseestrasse 25, 83233 Bernau am
Chiemsee, Germany.
France 17 Route de Sundhoffen, 68280
Andolsheim. France.
Ghana No.10, Adomi Street (formerly
3rd Close), Airport Residential Area, Accra.
DRC Cabinet Lohayo Ngola
Patrick, Immeuble Mirlandsis. au No34 du Boulevard Sendwe, Kinshasa DRC.
Liberia Gbaintor Law Firm, Wroto Town.
Sinkor, Airfield, Monrovia, Liberia.
* Consolidated due to de facto control. These
results do not have a material effect on the financial statements.
# Westminster Maritime Services Limited was formerly
known as Westminster Facilities Management Limited & Westminster Managed
Services Limited.
15. Financial instruments
Categories of financial assets and liabilities.
The fair value of carrying amounts presented in the Consolidated and Company
statement of financial position relate to the following categories of assets
and liabilities:
Group Group Company Company
2021 2020 2021 2019
£'000 £'000 £'000 £'000
Financial assets
Trade and other receivables (note 18) 3,606 2,647 9,774 9,059
Cash and cash equivalents (note 19) 944 2,143 380 1,716
4,550 4,790 10,154 10,775
Financial liabilities
Borrowings (note 22) 12 29 5 13
Trade and other payables (note 23) 1,760 2,308 638 1,246
1,772 2,337 643 1,259
See note 2 for a description of the accounting policies for each category of
financial instruments. The fair values are presented in this note and are
the same as the carrying value. A description of the Group's risk management
and objectives for financial instruments is given in note 26.
Convertible Loan Notes
The Convertible Loan Notes were either converted or repaid during 2020 with
the process being completed on 31 December 2020.
2021 2021 2021 2020 2020 2020
£'000 CULN CLN Total CULN CLN Total
At 1 January - - - 179 2,233 2,412
Amortised finance cost - - - 20 265 285
Interest paid - - - (9) (253) (262)
Fair Value adjustment on Extension - - - - - -
Repaid in the year - - - (190) (2,032) (2,222)
Converted in the year - - - - (213) (213)
At 31 December - - - - - -
Analysis of movement in debt at principal value (excluding IFRS impacts),
memorandum only
2021 2021 2021 2020 2020 2020
£'000 CULN CLN Total CULN CLN Total
At 1 January - - - 171 2,245 2,416
Fair value adjustment on conversion / repayment - - - 19 - 19
Conversion - - - - (213) (213)
Repaid - - - (190) (2,032) (2,222)
At 31 December - - - - - -
16. Deferred tax assets and liabilities
Deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. The Group's projections show the expectation of
future profits, hence in 2018 a deferred tax asset was recognised. Reviews
performed since then, including as at 31 December 2021, confirmed those
expectations.
The tax losses against which this deferred tax asset is being recognised are
in the group's holding company and its principal UK based subsidiaries.
Evidence, both positive and negative, primarily the Group's projections of
future profits have been considered. The critical judgement has been the
timing of new contracts. The deferred tax asset is expected to be used in the
period up to the end of 2023.
The Group believes it has a total potential deferred tax asset of £3,396,000
(2020: £2,557,000). It has recognised a deferred tax asset of £953,000
(2020: £956,000) due to budgeted future profits of the business beyond 2021.
There remains £2,443,000 (2020: £1,601,000) of unrecognised deferred tax
asset.
Deferred tax assets and liabilities have been calculated using the expected
future tax rate of 19% (2020: 19%). Any changes in the future would affect
these amounts proportionately.
2021 2020
£'000 £'000
Opening balance as at 1 January 956 907
Credit / (debit) to income statement (3) 49
Deferred tax asset as at 31 December 953 956
17. Inventories
Group Group Company Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Finished goods 681 773 - -
681 773 - -
The cost of inventories recognised as an expense within cost of sales amounted
to £1,313,000 (2020: £2,782,000). No reversal of previous write-downs was
recognised as a reduction of expense in 2021 or 2020.
18. Trade and other receivables
Group Group Company Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Trade receivables, gross 1,193 759 - 1
Allowance for credit losses (56) (52) - (1)
Trade receivables 1,137 707 - -
Amounts recoverable on contracts 136 135 - -
Intercompany receivables - - 8,643 7,915
Other receivables 1,909 1,321 1,131 1,144
Financial assets 3,182 2,163 9,774 9,059
Other taxes and social security 437 211 46 63
Prepayments 42 64 10 25
Non-financial assets 479 275 56 88
Trade and other receivables 3,661 2,438 9,830 9,147
Non-Current Receivable 424 484 - -
The average credit period taken on sale of goods in 2021 was 57 days (2020: 19
days). An allowance has been made for estimated credit losses of £45,000
(2020: £52,000). This allowance has been based on the knowledge of
receivables at the reporting date together with forecasts of future economic
impacts and their collectability. There are no expected credit losses on
amounts recoverable on contracts.
Expected credit losses on intercompany receivables assume that repayment of
the loan is demanded at the reporting date. If the subsidiary has sufficient
accessible highly liquid assets to repay the loan if demanded at the reporting
date, the expected credit loss is likely to be immaterial. If the subsidiary
could not repay the loan if demanded at the reporting date, the Group consider
the expected manner of recovery to measure expected credit losses. This is a
'repay over time' strategy (that allows the subsidiary time to pay),
non-trading subsidiaries will not be able to repay loans over time and are
therefore deemed to be impaired.
Other receivables include a sum of £1,118,000 (2020: £1,130,000) due from
the RiverFort Equity Placing and Sharing Agreement. It is expected that it
will be recovered from the sale of shares currently still held by RiverFort.
However, refer also note 26 on Contingent Liabilities.
The following table provides an analysis of trade receivables at 31 December.
The Group believes that the balances are ultimately recoverable based upon a
review of past payment history and the current financial status of the
customers.
2021 2020
£'000 £'000
Current 619 463
Not more than 3 months 379 130
More than 3 months 195 166
1,193 759
Allowances for Credit Losses 2021 2020
£'000 £'000
Opening balance at 1 January 52 116
Amounts written off - (48)
Amounts provided 37 46
Written back (no longer required) (33) (62)
Closing balance at 31 December 56 52
There are no significant expected credit losses from financial assets that are
neither past due nor impaired.
At 31 December 2021 £574,000 (2020: £307,000) of receivables were
denominated in US dollars, £63,000 (2020: Nil) of receivables were
denominated in Euros and £269,000 (2020: £167,000) were denominated in
Ghanaian Cedi. The Directors consider that the carrying amount of trade and
other receivables approximates to their fair value.
19. Cash and cash equivalents
Group Group Company Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Cash at bank and in hand 944 2,143 380 1,716
Bank overdraft - - - -
Cash and cash equivalents 944 2,143 380 1,716
All the bank accounts of the Group are set against each other where a right of
offset exists in establishing the cash position of the Group. The bank
overdrafts do not therefore represent bank borrowings, which is why they are
presented as above for the purposes of the cash flow statement and the
statement of financial position.
20. Called up share capital
Group and Company
The total amount of issued and fully paid shares is as follows:
Ordinary Share Capital 2021 2020
Number £'000 Number £'000
At 1 January 286,527,511 287 145,402,511 14,540
Arising on exercise of share options and warrants 127,500 - 2,125,000 213
Issued under the RiverFort EPSA - - 14,000,000 1,400
Share capital reorganisation to create deferred shares - - - (15,991)
Other issue for cash 43,859,649 44 125,000,000 125
At 31 December 330,514,660 331 286,527,511 287
Deferred share capital 2021 2020
Number £'000 Number £'000
At 1 January 161,527,511 15,991 - -
Share capital reorganisation to create deferred shares - - 161,527,511 15,991
Capital Reduction (161,527,511) (15,991) - -
At 31 December - - 161,527,511 15,991
Total Share Capital 2021 2020
Number £'000 Number £'000
Ordinary Share Capital 330,514,660 331 286,527,511 287
Deferred share capital - - 161,527,511 15,991
330,514,660 331 448,055,022 16,278
During the year, the following equity issues took place
Date Comment Shares Issued Issue price
18 June 2021 Equity placing 43,859,649 5.7
22 October 2021 Warrant Redemption 127,500 7
Capital Reduction
At the AGM on 24 June 2021 the Shareholders voted to approve reduction of
capital. This was subsequently ratified by court order in November 2021.
The reduction of capital involved a cancellation of the deferred shares,
cancellation of the share premium account, capitalisation and immediate
cancellation thereafter of the share merger reserve account which then enabled
the creation of distributable reserves in order to enhance the Company's
ability to pay dividends and/or to make other forms of distributions to its
shareholders in the future.
£'000
Deferred Shares Cancelation 15,991
Share Premium Cancelation 16,355
Merger Reserve Cancelation 300
Distributable Reserves 32,646
21. Share options and Warrants
Options outstanding
Options outstanding as at 1 January 2021 9,577,500
Lapsed during the year (100,000)
Options outstanding as at 31 December 2021 9,477,500
The Company adopted the 2007 Share Option Scheme on 3 April 2007 that provides
for the granting of both Enterprise Management Incentives and unapproved share
options (Westminster Group Individual Share Option Agreements). The main terms
of the option scheme are as follows:
· Although no special conditions apply to the options granted in
2007, the model form agreement allows the Company to adopt special conditions
to tailor an option for any particular employee.
· The scheme is open to all full-time employees and Directors
except those who have a material interest in the Company.
· For the purposes of this definition, a material interest is
either beneficial ownership of, or the ability to control directly, or
indirectly, more than 30% of the ordinary share capital of the Company.
· The Board determines the exercise price of options before they
are granted. It is provided in the scheme rules that options must be granted
at the prevailing market price in the case of EMI options and must not be
granted at an exercise price that is less than the nominal value of a share.
· There is a limit that options over unissued shares granted under
the scheme and any discretionary share option scheme or other option agreement
adopted or entered into by the Company must not exceed 10% of the issued share
capital.
· Options can be exercised on the second anniversary of the date of
grant and may be exercised up to the 10th anniversary of granting. Options
will remain exercisable for a period of 40 days if the participant is a good
leaver.
The Company adopted the 2017 Share Option Scheme on 21 September 2017 that
provides for the granting of both Enterprise Management Incentives and
unapproved share options (Westminster Group Individual Share Option
Agreements). The main terms of the option scheme are as follows:
· Although no special conditions apply to the options granted in
2017, the model form agreement allows the Company to adopt special conditions
to tailor an option for any particular employee.
· The scheme is open to all full-time employees and Directors
except those who have a material interest in the Company.
· For the purposes of this definition, a material interest is
either beneficial ownership of, or the ability to control directly, or
indirectly, more than 30% of the ordinary share capital of the Company.
· The Board determines the exercise price of options before they
are granted. It is provided in the scheme rules that options must be granted
at the prevailing market price in the case of EMI options and must not be
granted at an exercise price that is less than the nominal value of a share.
· There is a limit that options over unissued shares granted under
the scheme and any discretionary share option scheme or other option agreement
adopted or entered into by the Company must not exceed 10% of the issued share
capital.
· Options can be exercised on the second anniversary of the date of
grant and may be exercised up to the 10th anniversary of granting. Options
will remain exercisable for a period of 40 days if the participant is a "good
leaver".
Options have subsequently been granted on this basis.
These options are valued by the use of the Black-Scholes model using a
volatility of 70%, interest free rate of 0.5%, dividend of 0% and a life of 5
years.
The Company has the following share options outstanding to its employees
(including those on good leaver terms). The weighted average exercise price at
the reporting date was 18.1p (2020: 18.1p). The average life of the unexpired
share options was 5.4 years (2020: 6.4 years).
As At 31 December 2021 31 December 2020
Grant date Exercise price £ Number outstanding Average life outstanding (years) 2020 number outstanding 2020 average life outstanding (years)
28 June 2012 0.365 225,000 0.5 225,000 1.5
01 July 2014 0.510 225,000 2.5 225,000 3.5
10 December 2014 0.285 2,187,500 2.9 2,187,500 3.9
09 October 2015 0.140 40,000 3.8 40,000 4.8
01 June 2018 0.130 6,050,000 6.4 6,150,000 7.4
01 November 2018 0.130 750,000 6.8 750,000 7.8
9,477,500 5.4 9,577,500 6.4
During the year, no employee options were granted (2020: Nil), none were
exercised (2020: none) and 100,000 lapsed (2020: 93,750). The weighted average
price of the options lapsed in the year was 13.0p (2020: 28.5p). The
weighted average exercise price of exercisable options at the end of 2021 was
18.0p (2020 18.0p).
The Black-Scholes option-pricing model is used to determine the fair value of
share options at grant date. The assumptions used to determine the fair values
of share options at grant dates were as follows:
For share options granted post IPO the expected share price volatility was
determined taking account of the historic daily share price movements. Since
2009, the standard deviation of the share price over the past 3 years has been
used to calculate volatility.
The average expected term to exercise used in the models is based on
management's best estimate for the effects of non- transferability, exercise
restrictions and behavioural conditions, forfeiture and historical experience.
The risk-free rate has been determined from market yields for government gilts
with outstanding terms equal to the average expected term to exercise for each
relevant grant.
Warrants
The Company has historically issued the following warrants, which are still in
force at the balance sheet date:
Date issued Reason for issue Number of warrants Exercise price pence per share Life in years
31 January 2018 Placing Commission 170,455 22.0 5
22 January 2020 RiverFort EPSA 3,499,222 5.2 4
22 December 2020 £5m Share Issue 24,872,500 7.0 2
The Warrants issued on 31 January 2018 and 22 January 2020 are valued in
accordance with IFRS 2 that is for equity‑settled share‑based payment
transactions, the Company measures the goods or services received, and the
corresponding increase in equity, directly, at the fair value of the goods or
services received, unless that fair value cannot be estimated reliably.
Warrants are recorded at fair value at inception and are not remeasured.
The Warrants issued with Share Issues on 22 December 2020 have been determined
as equity instruments under IAS 32. Since the fair value of the shares
issued at the same time is equal to the price paid, these warrants, by
deduction, are considered to have been issued at nil value.
The fair value of £Nil (2020: £88,000) for the issue of these warrants was
recognised in the year.
Movement in Warrants
As at 1/1/21 Lapsed Redeemed As at 31/12/21
Placing Commission 170,455 - - 170,455
RiverFort EPSA 3,499,222 - - 3,499,222
£5m Share Issue 25,000,000 - (127,500) 24,872,500
Share Issue July 2019 9,625,000 (9,625,000) - -
38,294,677 (9,625,000) (127,500) 28,542,177
22. Lease Liabilities
Group Group Company Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Non-current
Non-current lease debt 12 29 5 13
Total non-current lease liabilities 12 29 5 13
Non-current lease debt
As described in Note 12, all leases that fall under IFRS 16 are recorded on
the balance sheet as liabilities, at the present value of the future lease
payments, along with an asset reflecting the right to use the asset over the
lease term. The non-current lease debt is the part of that debt which falls
due after 12 months.
23. Trade and other payables
Current Group Group Company Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Trade payables 509 688 170 125
Accruals and other creditors 1,219 1,582 226 366
Intercompany payables - - 219 735
Finance lease creditor (IFRS 16) 32 38 23 20
Financial liabilities 1,760 2,308 638 1,246
Other taxes and social security payable - - - -
Contractual liabilities 87 100 - -
Non-financial liabilities 87 100 - -
Total current trade and other payables 1,847 2,408 638 1,246
Shown on the balance sheet as:
Contractual liabilities 87 100 - -
Trade and other payables 1,760 2,308 811 1,246
1,847 2,408 811 1,246
Trade and other payables principally comprise amounts outstanding for trade
purchases and ongoing costs, as well as payments received in advance on
contracts. The average credit period taken for trade purchases in 2021 was 43
days (2020: 50 days). The Directors consider that the carrying value of trade
payables approximates to their fair value.
Contractual liabilities relate to amounts received from customers at year-end
but not yet earned.
At 31 December 2021 £160,000 (2020: £438,000) of payables were denominated
in US dollars, £24,000 (2020: £2,000) were denominated in Euros, £21,000
(2020: £1,000) were denominated in Ghanaian Cedi and £23,000 (2020: Nil)
were denominated in Sierra Leone Leones.
24. Cash flow adjustments and changes in working capital
The following non-cash flow adjustments and adjustments for changes in working
capital have been made to loss before taxation to arrive at operating cash
flow:
Group 2021 2021 2021 2020 2020 2020
Continuing operations Discontinued operations Total Continuing operations Discontinued operations Total
£'000 £'000 £'000 £'000 £'000 £'000
Adjustments:
Depreciation, amortisation and impairment of non-financial assets 244 - 244 225 - 225
Lease liabilities (3) - (3) (17) - (17)
Revaluation of fixed assets - - - (6) - (6)
Loss on disposal of non-financial assets - - - 33 - 33
Non-cash accounting for CLN & CULN - - - (119) - (119)
Conversion of CLN - - - (213) - (213)
(Decrease) / increase in Deferred Tax Asset 3 - 3 (49) - (49)
Share-based payment expenses - - - 87 - 87
Total adjustments 244 - 244 (59) - (59)
Net changes in working capital: 2021 2021 2021 2020 2020 2020
Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total
£'000 £'000 £'000 £'000 £'000 £'000
(Increase)/Decrease in inventories 92 - 92 (726) - (726)
Decrease in trade and other receivables (1,223) - (1,223) 128 - 128
Increase in long term receivables 60 - 60 (484) - (484)
Increase/(decrease) in contract liabilities (13) - (13) 27 - 27
Decrease in trade and other payables (548) - (548) (148) - (148)
Decrease in assets of disposal group classified as held for sale - - - - 170 170
Total changes in working capital (1,632) - (1,632) (1,203) 170 (1,033)
Company Company Restated
Company
2021 2020
£'000 £'000
Adjustments:
Depreciation, amortisation and impairment of non-financial assets 139 113
Finance costs 1 376
Revaluation of fixed assets - (6)
(Profit) / loss on disposal of non-financial assets - 8
Non-cash accounting for CLN (1)
Share-based payment expenses - 87
Other non-cash items - 6
Total adjustments 140 583
Net changes in working capital:
Increase in trade and other receivables (683) (427)
Decrease in trade and other payables (608) (1,425)
Increase in asset held for sale - -
Total changes in working capital (1,291) (1,852)
25. Contingent assets and contingent liabilities
In 2020, the company issued 14m ordinary shares and received a £1.5m
mezzanine loan under the RiverFort EPSA. At the same time under the EPSA the
company issued 14m shares and booked a sundry debt of £1.75m. The loan was to
be repaid and the sundry debt settled by selling down the shares. The
mezzanine loan was fully repaid in December 2020. As at the 31 December 2021
there remained shares still to be sold and a residual sundry debt for those
shares. Because of the low share price, had the remaining shares been sold at
the end of 2020 there would have been a loss of £985,000 (2020: £936,000) on
this debt. However, the shares do not have to be fully sold at this time;
and there is reason to believe that it will be at a price higher in the future
than the 31 December 2021 price level which will be enough to recoup the
losses.
In February 2021, Clydesdale Bank PLC trading as Yorkshire Bank offered the
Group an overdraft and other banking facilities. As a condition of these
facilities the Company entered into a multilateral charge and guarantee in
respect of bank overdrafts and other facilities of all companies within the
Group.
26. Financial risk management
The Group is exposed to various risks in relation to financial assets and
liabilities. The main types of risk are foreign currency risk, interest rate
risk, credit risk and liquidity risk.
The Group's risk management is closely controlled by the Board and focuses on
actively securing the Group's short to medium term cash flows by minimising
the exposure to financial markets. The Group does not actively trade in
financial assets for speculative purposes, nor does it write options. The most
significant financial risks are currency risk and interest rate risk.
Foreign currency sensitivity
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to the Euro
(EUR) and US dollar (USD) but also the Sierra Leone Leone (SLL) and Ghanaian
Cedi (GHS). The Group's policy is to match the currency of the order with the
principal currency of the supply of the equipment. Where it is not possible to
match those foreign currencies, the Group might consider hedging exchange risk
through a variety of hedging instruments such as forward rate agreements,
although no such transactions have ever been entered into.
Group Short-term exposure USD Short-term exposure EUR Short-term exposure SLL Short-term exposure GHS
£'000 £'000 £'000 £'000
31 December 2021
Financial assets 574 63 - 269
Financial liabilities (160) (24) (23) (21)
Total exposure 414 39 (23) 248
31 December 2020
Financial assets 307 - - 167
Financial liabilities (438) (2) - (1)
Total exposure (131) (2) - 166
If the US dollar were to depreciate by 10% relative to its year end rate, this
would cause a loss of profits in 2021 of £46,000 (2020: £15,000 Gain).
If the Euro were to depreciate by 10% relative to its year end rate, this
would cause a loss of profits in 2021 of £4,000 (2020: Minimal Gain).
If the Sierra Leonean Leone were to depreciate by 10% relative to its year end
rate, this would cause a gain of profits in 2021 of £3,000 (2020: Nil).
If the Ghanaian Cedi were to depreciate by 10% relative to its year end rate,
this would cause a loss of profits in 2021 of £28,000 (2020: £18,000 Loss).
Exposures to foreign exchange rates vary during the year depending on the
volume of overseas transactions. Nonetheless, the analysis above is considered
to be representative of the Group's exposure to currency risk. Foreign
currency denominated financial assets and liabilities are immaterial for the
Company.
Interest rate sensitivity
There were no material borrowings in 2021. Interest on the cash holdings of
the Group and lease debt noted in note 22 are both not material and also has
fixed interest rates. Therefore, no calculation of interest rate sensitivity
has been undertaken.
Credit risk analysis
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. The Group
has adopted a policy of only dealing with creditworthy counterparties and
where possible working on a "cash with order".
The Group has a credit policy in place and the exposure to credit risk is
monitored on an ongoing basis. Credit evaluations are performed on all
customers requiring credit over a certain amount. In the case of material
sales transactions, the Group usually demands an initial deposit from
customers and generally seeks to ensure that the balance of funds is secured
by way of a letter of credit or similar instruments.
None of the Group's financial assets are secured by collateral or other credit
enhancements. Details of allowance for credit losses are shown in note 18 of
these financial statements.
The Company has investments in and amounts owing from subsidiary companies.
The amounts owing are held at fair value. For loans that are repayable on
demand, expected credit losses are based on the assumption that repayment of
the loan is demanded at the reporting date. If the subsidiary has sufficient
accessible highly liquid assets in order to repay the loan if demanded at the
reporting date, the expected credit loss is likely to be immaterial. If it
does not, then an impairment will be considered.
Liquidity risk analysis
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which has established an appropriate liquidity risk management
framework for the management of the Group's short, medium and long-term
funding and liquidity management requirements. The Group manages its liquidity
needs by monitoring scheduled debt repayments for long term financial
liabilities as well as forecast cash flows due in day-to-day business. Net
cash requirements are compared to borrowing facilities in order to determine
headroom or any shortfalls. This analysis shows if available borrowing
facilities are expected to be sufficient over the outlook period.
As at 31 December 2021, the Group's financial liabilities have contractual
maturities (including interest payments, where
applicable) as summarised below:
2021 2020
Group Current (within 6 months) 6 to 12 months Non-current (1-5 years) Current (within 6 months) 6 to 12 months Non-current (1-5 years)
£'000 £'000 £'000 £'000 £'000 £'000
Trade and other payables 1,760 - - 2,308 - -
Total 1,760 - - 2,308 - -
Company Current (within 6 months) 6 to 12 months Non-current (1-5 years) Current (within 6 months) 6 to 12 months Non-current (1-5 years)
£'000 £'000 £'000 £'000 £'000 £'000
Trade and other payables 638 - - 1,246 - -
Total 638 - - 1,246 - -
27. Related Party Transactions
Balances and transactions between the Company and its subsidiaries, which are
related parties, are listed below:
Balance at 31 December 2019 Movement in Year Balance at 31 December 2020 Movement in Year Balance at 31 December 2021
2019 2020 2020 2021 2021
Westminster International Limited 2,329 (1,483) 846 (719) 127
Westminster Services Limited (formerly Longmoor Security Limited) - 10 10 (10) -
Westminster Aviation Security Services Limited 3,979 6 3,985 777 4,762
Sovereign Ferries Limited 45 503 548 - 548
Westminster Operating Limited (2,398) 2,156 (242) 68 (174)
Keyguard U.K Limited - 68 68 264 332
Longmoor (SL) Limited - - - (24) (24)
Facilities Operations Management Limited 192 (6) 186 1,313 1,499
Westminster Sierra Leone Limited * - (60) (60) 60 -
Westminster Group GMBH 795 63 858 330 1,188
GLIS Gesellschaft für Luftfahrt- und Infrastruktur-Sicherheit GmbH - (50) (50) 50 -
Westminster Sicherheit GMBH - - - - -
Euro Ops SARL 104 104 83 187
Westminster Maritime Services Limited 1,310 - 1,310 (1,331) (21)
Longmoor Security Services Limited (formerly Westminster Aviation Security - - - - -
Services (ME) Limited)
Westminster International (Ghana) Limited - (383) (383) 383 -
6,252 928 7,180 1,244 8,424
The remuneration of the Directors, who are the key management personnel of the
Group, is set out in the Remuneration Committee report as are details of
pension contributions for Directors.
In the year to 31 December 2021 fees and expenses of £ 9,339 (2020: £18,619)
plus VAT were accrued to Cattaneo LLP a Limited Liability Partnership under
the control of Charles Cattaneo. On the 31 December 2021 Cattaneo LLP was owed
Nil (2020: £1,600) including VAT.
In the year to 31 December 2021 fees and expenses of £ 1,320 (2020: Nil) plus
VAT were accrued to Graham Binns Consulting Limited, a Limited Liability
Partnership under the control of Major General (Rtd) Graham Binns. On the 31
December 2021 Graham Binns Consulting Limited was owed £1,584 including VAT
(2020: £Nil).
Certain members of the Fowler family, other than directors, have been employed
by the Group on normal arms-length terms for between 12 and 24 years. Their
remuneration, in aggregate, for the year ended 31 December 2021 was £183,448
(2020: £182,830).
28. Prior Year Adjustment
It has been clarified that Facilities Operations Management Limited, one of
our Sierra Leonean companies, is actually owned 100% by Westminster, not 90%
as stated in previous financial statements. The effect of this is as
follows:
Group statement of financial position (extract)
Signed accounts as at Restated as at
31 December 2020 Adjustment 31 December 2021
Brought forward Reserves (24,242) (150) (24,392)
Minority Interest (535) 150 (385)
Signed accounts as at Restated as at
31 December 2019 Adjustment 31 December 2020
Brought forward Reserves (23,697) (133) (23,830)
Minority Interest (365) 133 (232)
29. Events after the Reporting Period
There are no reportable events in the period 31 December 2021 to 28 April
2022.
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