REG - Westminster Group - Final Results <Origin Href="QuoteRef">WSG.L</Origin> - Part 2
15/07/2015 18:43
- Part 2: For the preceding part double click ID:nRSU8486Na
2,794 4,408 - 225 7,427 202 7,629
Segmental underlying EBITDA 665 462 (1,804) (127) (804) (370) (1,174)
Operating Exceptionals (310) - (64) (100) (474) - (474)
Depreciation & Amortisation (182) (30) (41) (4) (257) - (257)
Apportionment of central overheads (756) (668) 1,532 (106) 2 - 2
Segment Operating result (583) (236) (377) (337) (1,533) (370) (1,903)
Finance cost - - (88) - (88) - (88)
Income tax (charge)/benefit (9) - - - (9) - (9)
Loss for the financial year (592) (236) (465) (337) (1,630) (370 (2,000)
Segment assets 1,685 953 1,645 41 4,324 - 4,324
Segment liabilities 49 724 1,354 38 2,165 - 2,165
Capital expenditure 434 18 10 - 462 - 462
4. Operating exceptional items
2014 2013
£'000 £'000
Exchange losses (gains) (15) (76)
(Profit)/loss on disposal of property, plant and equipment 20 5
Share based payments 52 33
Restructure costs -- Longmoor. 2014 represents fixed costs eliminated in the year 87 100
Loss of margin arising from fall in passenger numbers due to Ebola crisis 537 -
West Africa airport contract set up costs and ongoing Managed Services discretionary expansion - 310
Other restructuring - 102
681 474
5. Finance cost
2014 2013
£'000 £'000
Finance costs:
Interest payable on bank and other borrowings (10) (26)
Coupon Interest payable on convertible loan notes (88) (125)
(Fees)/Refund on Synergy Loan Note - 315
(98) 164
Finance income:
Amortised finance cost on convertible loan notes 61 (252)
61 (252)
Finance costs and income, net (37) (88)
6. Taxation
Analysis of (credit)/charge in year
2014 2013
£'000 £'000
Current year
Corporation tax - 9
- 9
2014 2013
£'000 £'000
Reconciliation of effective tax rate
Profit/(loss) on ordinary activities before tax (2,441) (1,991)
Loss on ordinary activities multiplied by the standard rate of corporation tax in the UK of 20.0% (2013: 23.5%) (489) (463)
Effects of:
(Income)/expenses not deductible for tax purposes 60 228
Capital allowances less than depreciation 85 10
Other short term timing differences 15 19
Recognised/unrecognised losses carried forward 329 206
Potential Charge in Overseas Subsidiary (9) 9
Total tax charge/(credit) (9) 9
Tax losses available for carry forward (subject to HMRC agreement) were £8.9m
(2013: £6.5m).
7. 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 diluted 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:
2014 2013
£'000 £'000
Issued ordinary shares
Start of period 46,949 32,571
Effect of shares issued during the period 2,290 6,754
Weighted average basic and diluted number of shares for period 49,239 39,325
For the year ended 31 December 2014 and 2013 the issue of additional shares on
exercise of outstanding share options would decrease the basic loss per share
and there is therefore no dilutive effect. Loss per share excluding
discontinued items was 4.94p (2013: 4.09p).
8. Discontinued operations
On 26 March 2013, the Group entered into a sale agreement with a management
buy-out team to dispose of RMS (CTAC) Integrated Solutions and International
Monitoring Services Limited, which carried out all of the Groups UK alarm
installation and monitoring operations. The disposal was for £200,000 to
generate working cash flows for the expansion of the Groups other businesses.
Consideration is paid over 12 months and if the disposed companies exceed
certain revenue threshold then incremental consideration becomes payable.
The results of the discontinued operations which have been included in
consolidated income statement were as follows:
Group 2013£'000 2012£'000 2011£'000
RevenueCost of sales 202(145) 1,552(964) 1,312(929)
Gross profitAdministration expenses 57(427) 588(953) 383(929)
Loss before tax (370) (365) (546)
Loss on the disposal of discontinued operations (370) (365) (546)
9. Convertible Loan Notes
The Group had the following convertible loan note outstanding during the year
the key details of which are set out below: This was varied as detailed in
note 30 in April 2015.
Amount £1.118m new funds received in June 2013 with £0.2m of the FY14 note rolling into this instrument. By the balance sheet date all except £575,000 had converted into equity. Subsequent issue of £0.67m April 2015. £4m original capacity
Conversion Price 35p or > 35p for any further new issues after 1 May 2015 onwards
Security Secured fixed and floating subordinate to HSBC
Redemption Date 19 June 2016 (renegotiated to 19 June 2018 in April 2015 as per note 30)
Management Fee £25,000 per annum
Coupon 10%
Company can force conversion Company can force conversion if > 65p for 15 working days after 19 June 2016. Company can make repayment without penalty if > 42p for 15 working days after 19 June 2016
Host Debt 2014 2013
£'000 £'000
At 1 January 651 2,147
Issued in the Year - 1,009
Amortised Finance Cost 46 249
Capital Adjustment regarding fees - (312)
Repayment - (858)
Conversion (159) (1,584)
At 31 December 538 651
Reconciliation of Conversion 2014 2013
£'000 £'000
Amortised Loan Note Interest Cost Element (61) (314)
Principal Amount Converted 220 1,898
159 1,584
Analysis of movement in debt at principal value (excluding IFRS impacts),
memorandum only
2014 2013
£'000 £'000
Opening Balance 1 January 795 2,575
Fresh Issue for Cash - 1,117
Ref-und of previous payments - (296)
Repayment - (685)
Discount On redemption - (19)
Conversion into Equity (220) (1,897)
Closing Balance 31 December 575 795
10. 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)/profit before tax to arrive at operating cash
flow
2014 2013
£'000 £'000
Adjustments:
Depreciation, amortisation and impairment of non-financial assets 167 257
Loss on disposal of CTAC & other intangibles - 176
Financing costs 37 88
Provision on intercompany debt - -
Loss /(Profit) on disposal of non-financial assets 5 11
Share-based payment expenses 52 33
Total adjustments 261 565
Net changes in working capital:
(Increase)/decrease in inventories 31 (26)
(Increase)/decrease in trade and other receivables (628) 5
Increase/(decrease) in trade and other payables 1,132 (772)
Total changes in working capital 535 (793)
11. Post balance sheet events
On 22 April 2015 the Group completed the following debt issues to for general
balance sheet strength and will support ongoing costs and business
development, particularly around the expansion of the Managed Services
division. They were structured in a way so as to minimise potential dilution
to equity shareholders.
Variation of 2016 Convertible Secured Loan Note ("CSLN") and issue of further
loan notes.
On 19 June 2013, the Company issued a CSLN enabling the drawdown of a maximum
of £4m, with a three year duration, a 10% annual coupon and a conversion price
of 35 pence. As at that date, £1.318m of the CSLN had been drawn down.
Subsequently £0.742m of this was converted into ordinary shares in the Company
leaving £0.576m outstanding immediately prior to this announcement. The terms
of this have been varied (as consented to by all existing loan note holders)
so as to attract incoming investors (of which £0.67m subscribed on that day),
the key terms of which are set out below:
· Maturity date extended by 2 years to June 2018
· The conversion price (for issues after 30 April 2015) can be greater
than 35p
Westminster may repay the CSLN without penalty after the first year from the
date of the announcement provided that the average share price for the 15 days
prior to repayment is 42 pence or more. Westminster may force conversion of
the CSLN if the average share price on the 15 days before conversion is 65
pence or more. The CSLN holders may convert at any time during the term of the
instrument at the holder's option. All other terms of the CSLN remain the
same. These loan notes have a current capacity to issue a further £2,013,000
and are listed on the Channel Islands Stock Exchange.
Zero Coupon Convertible Unsecured Loan Notes ("CULN").
The Company also issued a further £1,650,000 (gross) CULN with Darwin
Strategic Limited ("Darwin"). The CULN is unsecured, has a zero coupon
attached and will be divided into 66 individual notes with a par value of
£25,000 each ("Par Value").
For each £25,000 loan note issued, Westminster has received 90% of the Par
Value, equivalent to £22,500 per individual loan note. During the first 12
months, any number of the loan notes is callable in cash by Westminster at
100% of Par Value (subject to the right of a loan note holder to convert with
agreed limitations as below). Following the 1 year anniversary, any number of
loan notes is callable at 102.5% of Par Value, equivalent to £25,625 per
individual loan note. From 1 May 2016, Westminster is required to prepay 3
loan notes every month at 105% of Par Value, equivalent to £78,750 and these
monthly repayments will mean no further equity issue from this instrument.
The loan notes are convertible at Darwin's election into new ordinary shares
of 10p each in Westminster ("Ordinary Shares") at the conversion price, being
the lesser of 39 pence per new Ordinary Share or 90% of the arithmetic average
of the five lowest daily volume weighted average share price per Ordinary
Share out of the ten trading days prior to conversion. The parties have also
agreed to certain limitations on conversion volumes throughout the duration of
the loan notes. In addition to the other redemption rights the loan notes are
redeemable in the event of a change of control or the occurrence of an event
of default in cash at 110% of the Par Value.
Darwin was also issued with warrants (vested immediately) to subscribe for
1,100,000 new Ordinary Shares at an exercise price of 39 pence per new
Ordinary Share. The warrants can be exercised over a two year period from the
date of this announcement.
Westminster and Darwin have mutually agreed to the early expiration of the
previous Equity Finance Facility which was put in place in April 2013.
12. Publication of Non-Statutory Accounts
The financial information set out above does not constitute the Company's
Annual Report and Financial Statements for the years ended 31 December 2014 or
2013. The Annual Report and Financial Statements for 2013 have been delivered
to the Registrar of Companies and those for 2014 will be delivered following
the Company's annual general meeting. The auditor's reports on both the 2014
and 2013 accounts were unqualified, did not draw attention to any matters by
way of emphasis and did not contain statements under s498(2) or (3) of the
Companies Act 2006. Whilst the financial information included in this
preliminary announcement has been computed in accordance with International
Financial Reporting Standards (IFRSs) this announcement does not itself
contain sufficient information to comply with IFRSs. Copies of the Annual
Report and Financial Statements for the year to 31 December 2014 will be
posted to shareholders by 6 June 2015 and will be obtainable from the
Company's registered offices or www.wg-plc.com when published. The information
in this preliminary announcement was approved by the Board on 20 May 2015.
This information is provided by RNS
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