REG - Westminster Group - Interim Results
28/03/2024 07:45
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RNS Number : 6739I Westminster Group PLC 28 March 2024
Westminster Group Plc
('Westminster', the 'Group' or the 'Company')
Interim Results for the six months to 31 December 2023
Westminster Group Plc (AIM: WSG), a leading supplier of managed services and
technology-based security solutions, announces its unaudited interim results
for the six months ended 31 December 2023 (the 'Period') ("H2 2023").
Highlights:
· Ratification process underway re 5 airports project in Democratic
Republic of Congo (DRC).
· Progress made with other managed services opportunities.
· Delivered products and services to 33 countries around the world.
· Guarding business expanded.
· Group revenues of £2.9m (H1 2023: £3.5m; H2 2022: £5.6m).
· Gross margin at 57% (H1 2023: 64%; H2 2022: 56%).
· Administrative expenses (continuing) are down to £1.7m (H1 2023:
£2.5m; H2 2022: £2.7m).
· Continuing business EBITDA profit of £44k (H1 2023: Loss £117k; H2
2022: Profit £340k).
· Continuing business Operating Loss £79k (H1 2023: Loss £293k; H2
2022: Profit £222k).
· Loss per share (with exceptional loss, and discontinued ops,
included) of 0.58p (H1 2023: Loss 0.09p; H2 2022: Profit 0.23p).
Commenting on the results and current trading, Peter Fowler, Chief Executive
of Westminster Group, said:
"We continue to battle against probably one of the worst world economic and
political backgrounds in recent times. I am pleased to report therefore that,
despite the global uncertainty and economic challenges, our underlying
business continues perform largely to expectations although revenues fell in
this six-month period to £2.9m largely due to the economic climate delaying
some capital-intensive orders. However, due to a cost cutting programme and
careful resource management we have delivered a near break-even result for
ongoing operations with an EBITDA profit of £44k.
"Our business development activities made significant progress in the period
which, whilst not benefitting the period in question, will have a material
impact in the current year. A key development being progress on the
long-awaited ratification process, currently being completed, being the final
part of the formal procurement procedure for the 10+ year contract signed in
June 2021 for security services to 5 airports in the Democratic Republic of
the Congo ('DRC'), Central Africa.
"We started 2024 with an order book of £1.1m and recurring revenues of £3.7m
which provide a healthy start for the year. With DRC expected to come on
stream and other potential projects in the pipeline we believe the months and
year ahead will be transformative for the Group."
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
Richard Johnson
Zeus Capital Limited (Broker) 020 3829 5000
Louisa Waddell
Simon Johnson
Walbrook (Investor Relations)
Tom Cooper 020 7933 8780
Paul Vann
Nick Rome 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 (NGOs) and blue-chip commercial organisations.
The Westminster Group Foundation is part of the Group's Corporate Social
Responsibility activities. www.wg-foundation.org
(http://www.wg-foundation.org)
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.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE
MARKET ABUSE REGULATION NO. 596/2014 ("MAR") WHICH IS PART OF UK LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF
THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE
PUBLIC DOMAIN
Chief Executive Officer's Review
Overview
We continue to battle against probably one of the worst world economic and
political backgrounds in recent times. I am pleased to report therefore that,
despite the global uncertainty and economic challenges, our underlying
business continues perform largely to expectations although revenues were
down. However, due to a cost cutting programme and careful resource
management we have delivered a near break-even result for ongoing operations.
Traditionally our business is weighted towards the second half of the calendar
year as we complete and deliver projects secured during the earlier part of
the year. H2 2023 was an anomaly in this respect largely due to delayed orders
for some of our larger technology projects because of the global economic
situation and not helped by a delayed stage payment of $847k from the European
Investment Bank for a large airport project in Southeast Africa, now received,
which meant that project could not be completed in 2023 as planned.
In December we settled our dispute with Scanport, Ghana regarding the
discontinued port project receiving $500k USD in settlement. Whilst the figure
is less than the carrying figure of £1.1m in our accounts, we considered the
terms of the settlement to be favourable and timely given the expected
development of the Group's managed services business in early 2024 as
mentioned below.
Consequently in H2 2023 we achieved revenues of £2.9m (H1 2023 £3.5m; H2
2022: £5.6m). Gross Margins at 57% were in line with expectations (H1 2023:
64% H2 2022: 56%) leading to a near break-even result for ongoing operations
with an EBITDA profit of £44k (H1 2023: Loss £117k; H2 2022: Profit £340k)
and Loss £79k (H1 2023: Loss £293k; H2 2022: Profit £222k).
Our aviation security business continues to perform ahead of budget. Our West
African airport operation and collaboration with Summa is working well and
have been a positive development. During the period we continued to provide
post pandemic aviation security (AVSEC) training to staff at a major UK
airport and have secured contracts for AVSEC training in other airports around
the world, expanding our network of potential managed services opportunities
for the future. Our $1.7 million project to upgrade security at two airports
in Southeast Africa, funded by the European Investment Bank (EIB), was delayed
due to an administrative issue between the EIB and the country concerned. This
meant progress on the project had to be halted whilst the payment issue was
resolved and so was not completed in 2023 as planned. I am pleased to report
the $847k payment has now been received and the project is back underway and
will be completed in 2024.
I am pleased to report we have made significant strides forward with several
of the large-scale, long-term managed services airports and ports
opportunities, each of which would, when secured, provide multi-million-pound
step changes in annual revenues. Foremost amongst these is our project in the
Democratic Republic of the Congo (DRC) for which I am delighted to announce
that the long-awaited ratification process is currently being completed, being
the final part of the formal procurement procedure for the now 10+ year
contract signed in June 2021 for security services to 5 airports in the
Democratic Republic of the Congo ('DRC'), Central Africa. Arrangements are now
being made for a senior Westminster team to travel to the DRC with a UK
Government Trade delegation in April to hopefully finalise matters and to
prepare for commencement of the project. We expect to make a further
announcement after that visit.
DRC will be a key addition to our international aviation security services,
and we believe the country has exciting growth potential. With a surface area
equivalent to that of Western Europe it is, by area, the largest country in
sub-Saharan Africa, the second largest in all of Africa, and the 11th-largest
in the world. It is also the most-populous Francophone country in the world.
Air travel is therefore an important and a necessary requirement within this
vast country. The country is extremely rich in natural resources and has the
potential for sizeable economic growth. I look forward to Westminster having
a long-term presence in the country and in playing our part in the successful
growth and security of the country's numerous airports.
In our 2022 Annual Report published in June 2023 we stated we could
potentially secure one or maybe two new large-scale manage services contracts
in 2023. The outcome and timing of these complex projects are never certain,
particularly in a challenging world environment, however, whilst we did not
manage to finalise contracts in 2023, we have made important progress and from
current activity and discussions underway we do expect secure these and
potentially other such contracts in 2024.
Our guarding business continues to perform well. The H2 2023 revenues are an
increase over the first half of the year and new contracts have been
secured. We are continuing to develop a strategy which sees both the
quantity and quality of our guarding clients improving.
Our focus has been and will continue to be on expanding our international
operations, predominantly in emerging markets, as we believe that is where we
will see significant growth opportunities, particularly with our managed
services opportunities. However, the ongoing global economic situation of the
past year has created some challenges, not just with increasing costs but
significantly with some economies suffering substantial currency devaluation,
in turn, leading to currency restrictions and in some places civil unrest.
This has understandably led to some order delays, particularly with larger
capital-intensive projects. Not-with-standing these challenges in H2 2023, we
delivered products and services to 33 countries around the world and we fully
expect some if not all of the delayed orders to eventually be secured.
In addition to building our international operations and to provide some
resilience against world events, we have been undertaking a strategy of
developing a significant UK presence with an enviable blue-chip client base,
such as the Palace or Westminster, Scottish Parliament, Tower of London, UK
Border Force, UK Prisons, to name but a few, which provide resilient recurring
revenue streams. We have previously reported on the opportunities for our
business that we anticipate could arise from the long-expected Martyn's Law
legislation and we were pleased to see that included in the Kings Speech on 7
November 2023 and expect it to become law this year. We have already assisted
a number of key-customers and landmark buildings to become compliant ahead of
the legislation and we are active in developing further opportunities and to
be recognised as a leading provider of solutions under the legislation.
Financial
Revenues were at £2.9 million (H1 2023: £3.5 million; H2 2022: £5.6
million) for the first half year. This decrease is represented primarily by
the end of the Ghana port operation and lower Technology sales due to economic
uncertainty in the world. H2 2022 benefited from a large solutions sale.
The Group generated a continuing gross profit of £1.6 million (H1 2023: £2.2
million; H2 2022: £2.9 million) which equates to a gross margin of 57% (H1
2023: 64%; H2 2022 56%). The increase in high margin services sales in H1
2023 changed the margin mix which reverted to a more normal mix in H2 2023.
Cost cutting and careful control over expenses reduced continuing
administration from £2.7 million in H2 2022 and £2.5 million in H1 2023 to
£1.7 million in H2 2023.
The continuing operating loss was £0.1 million (H1 2023: loss of £0.3
million; H2 2022: profit of £0.2 million). The reduction in the
administration expenses was not enough to fully counter the drop in sales and
change in the margin mix.
The RiverFort EPSA has been previously described in the 2020, 2021 and 2022
accounts. In 2020 the Company 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 2023 there remained 4,300,696
Westminster shares, held to the Company's order equally by RiverFort &
YAII, the proceeds of which, when sold, will be for the benefit of
Westminster. If those shares had been sold at 31 December 2023, due to the low
share price at that time, the Company would have received proceeds of
£68,811.14 but would have incurred a book loss of £1.05m. Whilst the
Company can choose to enact the sale of these shares at any time, it has not
done so and there is no reason nor pressure to do so until the Company's share
price has reached a target price of 26p. The Company believes that with
imminent and expected new long-term contracts to be gained over the next 24
months the target price or higher can be achieved in due course at which time
the shares can be sold for the benefit of the Company. In the meantime, for
the sake of good governance it has been decided to mark to market the
underlying shares as at 31 December 2023 and make a provision of £1.05m in
Sundry Gains and Losses. This accounting treatment reflects the current fair
value of the underlying shares. This provision will be assessed at each
accounting reporting date against the market share price until such time as
the shares are sold, should, as the board anticipates, the price be higher
than the current market price with any profit from the reduction of the
provision being recognised in future Profit & Loss statements.
Cash balance as at 31 December 2023 was: £0.2 million overdraft (30 June
2023: £0.1 million, 31 December 2022: £0.3 million). The Group also has
overdraft facilities of £0.385 million which were partially unutilised at 31
December 2023. However, by 31 January 2024, the group had £0.85m in the
bank. Working capital remains strong with receivables at £3.0m (H1 2023:
£4.8m H2 2022: £4.8m) vs creditors of £1.8m (H1 2023: £1.9m H2 2022:
£2.3m).
Earnings per share was a loss of 0.58 pence (H1 2023: 0.09p loss; H2 2022
0.23p profit).
Outlook
We started 2024 with and order book of £1.1m and recurring revenues of £3.7m
which provide a healthy start for the year. With DRC expected to come on
stream and other potential projects in the pipeline we believe the months and
year ahead will be transformative for the Group.
Peter Fowler,
Group Chief Executive
27 March 2024
Condensed consolidated statement of comprehensive income (unaudited)
for the six months ended 31 December 2023
Note Six months ended 31 December 2023 Six months ended 30 June 2023 Six months ended 31 December 2022
Continuing Discontinued Total Continuing Discontinued Total Continuing Discontinued Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 5 2,904 - 2,904 3,393 89 3,482 5,225 387 5,612
Cost of sales (1,257) - (1,257) (1,183) (58) (1,241) (2,319) (140) (2,459)
Gross profit 1,647 - 1,647 2,210 31 2,241 2,906 247 3,153
Administrative expenses (1,726) (770) (2,496) (2,503) (12) (2,515) (2,684) (12) (2,696)
Operating profit / (loss) 6 (79) (770) (849) (293) 19 (274) 222 235 457
Other gains and losses 7 (1,045) - (1,045) - - - - - -
(1,124) (770) (1,894) (293) 19 (274) 222 235 457
Analysis of operating loss (79) (770) (849) (293) 19 (274) 222 235 457
Add back depreciation and amortisation 126 - 126 104 - 104 118 - 118
Add back share-based expense (3) - (3) 72 - 72 - - -
EBITDA profit / loss from underlying operations 44 (770) (726) (117) 19 (98) 340 235 575
Finance Costs (16) - (16) (13) - (13) (35) - (35)
Profit / (loss) before taxation (1,140) (770) (1,910) (306) 19 (287) 187 235 422
Taxation - - - - - - 354 - 354
Total comprehensive profit / (loss) for the period (1,140) (770) (1,910) (306) 19 (287) 541 235 776
Profit / (loss) and total comprehensive profit / (loss) attributable to:
Owners of the parent (1,268) (770) (2,038) (300) 19 (281) 674 235 909
Non-controlling interest 128 - 128 (6) - (6) (133) - (133)
Profit / (loss) and total comprehensive profit / (loss) (1,140) (770) (1,910) (306) 19 (287) 541 235 776
Profit / (loss) per share (pence) 8 (0.58) (0.09) 0.23
Condensed consolidated balance sheet (unaudited)
as at 31 December 2023
As at 31 December 2023 As at 30 June 2023 As at 31 December 2022
Note £'000 £'000 £'000
Goodwill 617 614 615
Other intangible assets 47 80 106
Property, plant and equipment 1,775 1,817 1,825
Deferred Tax 1,308 1,309 1,308
Total Non-Current Assets 3,747 3,820 3,854
Inventories 374 459 485
Trade and other receivables 3,149 4,818 4,808
Cash and cash equivalents (191) 54 289
Total Current Assets 3,332 5,331 5,582
Non-current receivable 10 363 369 593
Total Assets 7,442 9,520 10,029
Called up share capital 11 331 331 331
Share based payment reserve 427 433 964
Revaluation reserve 139 139 139
Retained earnings 4,599 6,899 6,503
Equity attributable to
Owners of the parent 5,496 7,802 7,937
Non-controlling interest (400) (528) (522)
Total Shareholders' 5,096 7,274 7,415
Non-current borrowings 12 137 49 27
Total Non-Current Liabilities 137 49 27
Current borrowing 12 316 182 194
Contractual liabilities 85 69 80
Trade and other payables 1,808 1,946 2,313
Total Current Liabilities 2,209 2,197 2,587
Total Liabilities 2,346 2,246 2,614
Total Liabilities and Shareholders' Equity 7,442 9,520 10,029
Condensed consolidated statement of changes in equity (unaudited)
for the six months ended 31 December 2023
Called up share capital Share premium account Merger relief reserve Share based payment reserve Revaluation reserve Retained earnings Total Non-controlling interest Total share-holders' equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1(st) July 2023 331 - - 433 139 6,899 7,802 (528) 7,274
Loss for the Period - - - - - (2,038) (2,038) 128 (1,910)
Total comprehensive expense for the Period - - - - - (2,038) (2,038) 128 (1,910)
Transactions with owners in their capacity as owners:
Lapse / waiver of Share Options - - - (6) - 5 (1) - (1)
Exchange rate movement in equity - - - - - (267) (267) - (267)
Transactions with owners - - - (6) - (262) (268) - (268)
As at 30 December 2023 331 - - 427 139 4,599 5,496 (400) 5,096
for the six months ended 30 June 2023
Called up share capital Share premium account Merger relief reserve Share based payment reserve Revaluation reserve Retained earnings Total Non-controlling interest Total share-holders' equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1(st) January 2023 331 - - 964 139 6,503 7,937 (522) 7,415
Loss for the Period - - - - - (281) (281) (6) (287)
Total comprehensive expense for the Period - - - - - (281) (281) (6) (287)
Transactions with owners in their capacity as owners:
Lapse / waiver of Share Options - - - (603) - 603 - - -
Issue of new warrants & Share Options - - - 72 - - 72 - 72
Exchange rate movement in equity - - - - - 74 74 74
Transactions with owners - - - (531) - 677 146 - 146
As at 30th June 2023 331 - - 433 139 6,899 7,802 (528) 7,274
for the six months ended 31 December 2022
Called up share capital Share premium account Merger relief reserve Share based payment reserve Revaluation reserve Retained earnings Total Non-controlling interest Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 July 2022 331 - - 1,007 139 5,589 7,066 (390) 6,676
Profit for the period - - - - - 909 909 (133) 776
Total comprehensive income for the period - - - - - 909 909 (133) 776
Transactions with owners in their capacity as owners:
Lapse of share options - - - (43) - 43 - - -
Other movements in equity - - - - - (38) (38) 1 (37)
Transactions with owners - - - (43) - 5 (38) 1 (37)
As at 31 December 2022 331 - - 964 139 6,503 7,937 (522) 7,415
Consolidated Cash Flow Statement (unaudited)
for the six months ended 31 December 2023
Six months ended 31 December 2023 Six months ended 30 June 2023 Six months ended 31 December 2022
Total Total Total
Note £'000 £'000 £'000
Loss after taxation (1,910) (287) 776
Tax - - (354)
Loss before taxation (1,910) (287) 422
Non-cash adjustments 9 (118) 230 116
Net changes in working capital 9 1,638 (135) (744)
Cash outflow from operating activities (390) (192) (682)
Investing activities
Purchase of property, plant and equipment (77) (66) 21
Purchase of intangible assets - (12)
Cash outflow from investing activities (77) (66) 9
Financing activities
Increase in debt 168 36 (50)
Finance cost 54 (4) (37)
Loan drawdown - (9) 185
Other loan repayments, including interest - - (10)
Cash inflow from financing activities 222 23 88
Decrease in cash and cash equivalents in the Period (245) (235) (109)
Cash and cash equivalents at the beginning of the Period 54 289 398
Cash and cash equivalents at the end of the Period (191) 54 289
Notes to the unaudited financial statements
for the six months ended 31 December 2023
1. General information and nature of operations
This condensed consolidated interim financial report for the half-year
reporting period ended 31 December 2023 has been prepared in accordance with
Accounting Standard IAS 34 Interim Financial Reporting. These unaudited
interim financial statements were approved by the board on 27 March 2024. The
31 December 2022 numbers are extracted from the Group's audited accounts.
The interim report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the annual report for the year ended 31 December 2022 and
any public announcements made by Westminster Group Plc during the interim
reporting period
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 six-month period ended 31 December 2023
consolidate the individual financial information of the Company and its
subsidiaries. The Group designs, supplies and provides advanced technology
security solutions and services to governmental and non-governmental
organisations on a global basis.
The Group does not show any distinct seasonality although traditionally the
second half of the year is stronger than the first.
2. Significant changes in the current reporting period
There were no major changes, however the Ghana contract has now been settled
as explained in the Chief Executive Officers review.
3. Basis of preparation
This condensed consolidated interim financial report for the half-year
reporting period ended 31 December 2023 has been prepared in accordance with
Accounting Standard IAS 34 Interim Financial Reporting.
The interim report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the annual report for the year ended 31 December 2022 and
any public announcements made by Westminster Group Plc during the interim
reporting period.
The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period and the adoption of
new and amended standards as set out below.
These consolidated interim financial statements for the six months ended 31
December 2023 have neither been audited nor formally reviewed by the Group's
auditors. The financial information for the six months ended 31 December 2022
set out in this interim report does not constitute statutory accounts as
defined in section 435 of the Companies Act 2006 but is derived from those
accounts.
The statutory financial statements for the year ended 31 December 2022 have
been reported on by the Company's auditors and delivered to the Registrar of
Companies. A copy is available at
https://www.wsg-corporate.com/investor-relations/publications/
(https://www.wsg-corporate.com/investor-relations/publications/) .
3(a) New and amended standards adopted by the Group
The following new or amended standards relevant to the group became applicable
for the current reporting period.
· IAS 1 - Presentation of Financial Statements
· IAS 8 - Accounting Policies, Changes in Accounting Estimates and
Errors
· Deferred Tax Related to Assets and Liabilities Arising from a Single
Transaction - Amendments to IAS 12
· IAS 16 - Property, Plant and Equipment
· IAS 37 - Provisions, Contingent Liabilities and Contingent Assets
· Income Taxes (Amendments to IAS 12)
The Group did not have to change its accounting policies or make retrospective
adjustments as a result of adopting these standards.
3(b) Impact of standards issued but not yet applied by the entity
The Group does not expect to be significantly impacted by the adoption of
standards issued but not yet applied.
4. Going concern
The directors have considered the way the Group has continued to trade.
Projections have demonstrated that the group has sufficient funds to perform
its obligations. At the time of approving this interim report, and in view
of the foregoing, the directors have a reasonable expectation that the Group
has adequate resources to continue in operational existence for the
foreseeable future. Thus, they continue to adopt the going concern basis of
accounting in preparing the financial statements.
5. 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 Period are the main operating work streams, Services and
Technology (products and solutions).
6 Months to 31 December 2023 Managed Services Technology Discontinued Group and Central Group Total
£'000 £'000 £'000 £'000 £'000
Supply of products - 332 - - 332
Supply and installation contracts - - - - -
Maintenance and services 2,080 256 - - 2,336
Training courses 189 47 - - 236
Revenue 2,269 635 - - 2,904
Segmental underlying EBITDA 149 (86) (770) (19) (726)
Share based expense - - - 3 3
Depreciation & amortisation (32) (21) - (73) (126)
Segment operating result 117 (107) (770) (89) (849)
Other gains and losses - - - (1,045) (1,045)
Finance cost - - - (16) (16)
Profit/ (loss) before tax 117 (107) (770) (1,150) (1,910)
Income tax charge - - - -
Profit/(loss) for the financial year 117 (107) (770) (1,150) (1,910)
Segment assets 4,001 1,306 - 2,135 7,442
Segment liabilities 1,022 1,329 - (5) 2,346
Capital expenditure 128 - - 15 143
6 Months to 30 June 2023 Managed Services Technology Discontinued Group and Central Group Total
£'000 £'000 £'000 £'000 £'000
Supply of products - 379 - - 379
Supply and installation contracts - 13 - - 13
Maintenance and services 2,673 147 89 - 2,820
Training courses 263 6 - - 269
Revenue 2,936 456 89 - 3,482
Segmental underlying EBITDA 1,705 (128) 19 (1,694) (98)
Share based expense - - - (72) (72)
Depreciation & amortisation (72) (2) - (30) (104)
Segment operating result 1,633 (130) 19 (1,796) (274)
Finance cost - (1) - (12) (13)
Profit/ (loss) before tax 1,633 (131) 19 (1,808) (287)
Income tax charge - - - - -
Profit/(loss) for the financial year 1,633 (131) 19 (1,808) (287)
Segment assets 5,740 1,217 1,090 2,563 9,520
Segment liabilities 1,155 550 - 541 2,246
Capital expenditure 51 - - 15 66
6 Months to 31 December 2022 Managed Services Technology Discontinued Group and Central Group Total
£'000 £'000 £'000 £'000 £'000
6 MONTHS TO JUNE 2023
Supply of products - 1,194 - - 1,194
Supply and installation contracts - 1,080 - - 1,080
Maintenance and services 2,453 183 387 - 3,023
Training courses 293 22 - - 315
Revenue 2,746 2,479 387 - 5,612
Segmental underlying EBITDA 693 31 235 (384) 575
Share based expense - - - - -
Depreciation & amortisation (36) (20) - (62) (118)
Segment operating result 657 11 235 (446) 457
Other gains and losses - - - - -
Finance cost - - - (35) (35)
Profit/ (loss) before tax 657 11 235 (481) 422
Income tax charge 40 - - 314 354
Profit/(loss) for the financial year 697 11 235 (167) 776
Segment assets 4,886 1,453 1,090 2,600 10,029
Segment liabilities 878 1,387 1 348 2,614
Capital expenditure 113 1 - 39 153
The Discontinued segment follows the closure of our Ghana port operation.
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.
Six months ended 31 December 2023 Six months ended 30 June 2023 Six months ended 31 December 2022
£'000 £'000 £'000
United Kingdom and Europe 1,430 1,164 1,515
Africa 1,474 2,203 3,994
Middle East - 92 10
Rest of the World - 23 93
Total revenue 2,904 3,482 5,612
6. Reconciliation of adjusted EBITDA
A reconciliation of adjusted EBITDA to operating profit before income tax is
provided as follows:
Six months ended 31 December 2023 Six months ended 30 June 2023 Six month ended 31 December 2022
£'000 £'000 £'000
(Loss) from Operations (849) (274) 457
Depreciation, amortisation and impairment charges 126 104 118
Reported EBITDA (723) (170) 575
Share based expense (3) 72 -
Adjusted EBTIDA (loss) (726) (98) 575
Adjusted EBITDA is an alternative performance measure. For further details
refer to the 31 December 2022 accounts.
7. Other gains and losses
The RiverFort EPSA has previously described in the 2020, 2021 and 2022
accounts. In 2020 the company 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 2023 there remained 4,300,696
Westminster shares, held to the company's order equally by RiverFort &
YAII, the proceeds of which, when sold, will be for the benefit of
Westminster. If those shares had been sold at 31 December 2023, due to the low
share price at that time, the company would have received proceeds of
£68,811.14 but would have incurred a book loss of £1.05m. Whilst the
company can choose to enact the sale of these shares at any time, it has not
done so and there is no reason nor pressure to do so until the company's share
price has reached a target price of 26p. The Company believes that with
imminent and expected new long-term contracts to be gained over the next 24
months the target price or higher can be achieved in due course at which time
the shares can be sold for the benefit of the Company. In the meantime, for
the sake of good governance it has been decided to mark to market the
underlying shares as at 31 December 2023 and make a provision of £1.05m in
Sundry Gains and Losses. This accounting treatment reflects the current fair
value of the underlying shares. This provision will be assessed at each
accounting reporting date against the market share price until such time as
the shares are sold, should, as the board anticipates, the price be higher
than the current market price with any change in the provision being
recognised in future Profit & Loss statements.
8. Income statement information
a. Significant Items
Other than disclosed elsewhere, the loss for the half year to 31 December 2023
includes no items that are unusual because of their nature, size or incidence.
b. Income Tax
Income tax expense is recognised based on management's estimate. The Group
has significant tax losses in the UK brought forward from prior years and does
not expect to have to provide any material amount for tax.
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
were performed in subsequent years which has confirmed those expectations.
c. Loss per share
Earnings / Loss per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the Period. 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 Period have
been included. For each period, the issue of additional shares on exercise of
outstanding share options would decrease the basic loss per share and
therefore there is no dilutive effect.
The weighted average number of ordinary shares is calculated as follows:
Six months ended 31 December 2023 Six months ended 30 June 2023 Six month ended 31 December 2022
'000 '000 '000
Number of issued ordinary shares at the start of period 330,515 330,515 330,515
Weighted average basic and diluted number of shares for period 330,515 330,515 330,515
£'000 £'000 £'000
Loss and total comprehensive expense (1,910) (287) 776
Loss per share (0.58)p (0.09)p 0.23p
9. Cash flow adjustments and changes in working capital
Six months ended 31 December 2023 Six months ended 30 June 2023 Six months ended 31 December 2022
Total Total Total
£'000 £'000 £'000
Adjustment for non-cash items
Depreciation, amortisation and impairment of non-financial assets 126 104 118
Finance costs 16 13 35
Movement in right to use asset 16 50 (28)
(Profit) on disposal of non-financial assets 8 (5) (4)
IFRS 16 interest adjustment - (4) (5)
(Increase)/decrease in Deferred Tax Asset 1 - -
FX effect (282) - -
Share-based payment expenses (3) 72 -
Total adjustments (118) 230 116
Net changes in working capital:
Decrease / (increase) in inventories 85 26 310
Decrease / (increase) in trade and other receivables 1,669 (10) (1,061)
Decrease / (increase) in long term receivables 6 224 (182)
Increase / (decrease) in contract liabilities 16 (11) 11
Increase / (decrease) in trade and other payables (138) (364) 178
Total increase / (decrease) in working capital 1,638 (135) (744)
10. Non-current Receivable
As at 31 December 2023 As at 30 June 2023 As at 31 December 2022
Sierra Queen 363 369 593
363 369 593
The Sierra Queen was a vessel owned by Sovereign Ferries which was sold in
December 2019 into the Mediterranean leisure market. The pandemic and
subsequent technical issues with the boat have meant that we have had to
renegotiate the payment plan which now stretches out to May 2029. In order
to secure this debt the Group had received cross guarantees from sister
companies of the purchaser as well as a personal guarantee from the owner and
reservation of title over the vessel. Whilst this is stretching out
management consider that this is collectable.
11. Called up share capital
Ordinary Share Capital 6 months to 31st December 2023 6 months to 30th June 2023 6 months to 31st December 2022
Number £'000 Number £'000 Number £'000
At the beginning of the period 330,514,660 331 330,514,660 331 330,514,660 331
Arising on exercise of share options and warrants - - - - - -
Other issue for cash - - - - - -
At the end of the period 330,514,660 331 330,514,660 331 330,514,660 331
12. Borrowings
Six months ended 31 December 2023 Six months ended 30 June 2023 6 months ended 31 December 2022
£'000 £'000 £'000
Current borrowings (due < 1 year)
Loan 280 112 132
Lease Debt 36 70 62
Total current borrowings 316 182 194
Non-current borrowings (due > 1 year)
Lease Debt 137 49 27
Total non-current borrowings 137 49 27
Total borrowings 453 231 221
13. Contingencies
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.
14. Events after the Reporting Period
There are no significant events to report after the period end, other than as
noted in the report.
15. Copies of interim financial statements
A copy of these interim financial statements is available on the Company's
website, www.wsg-corporate.com (http://www.wsg-corporate.com) and from the
Company Secretary at the company's registered office, Westminster House,
Blacklocks Hill, Banbury, Oxfordshire, OX17 2BS.
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