30th May 2014 10:02
LONDON (Alliance News) - Westminster Group PLC Friday posted a widened pretax loss in 2013, hampered by the sale of its UK businesses in March as part of its re-focus towards growing its international business.
Westminster provides managed services and technology to the security, defence, fire protection and safety markets.
The company posted a pretax loss of GBP2.0 million, widened from a loss of GBP1.7 million in the previous year, as revenue declined to GBP7.6 million from GBP9.5 million, hit by the sale of the company's UK operations in March, as it refocused its business towards international markets.
It disposed of its RMS Integrated Solutions and International Monitoring Services businesses in March in a management buyout for GBP200,000, however both businesses will continue to provide certain services to Westminster. A further earn out from the sale is contingent of revenues achieved by the businesses over the next two years.
In the previous year the UK operations had contributed GBP1.5 million to revenues.
Westminster's gross margin rose to 42% from 37% over the year, driven by an increase in higher margin revenues from the company's managed services division, offsetting weaker margins in the company's technology division.
The technology division saw revenue decline to GBP4.4 million from 5.8 million, although this was offset somewhat by an increase in managed services revenues to GBP2.8 million from GBP1.7 million.
In managed services revenue growth was driven by an ongoing contract at a West African airport, said the company.
Westminster has invested in the airport's operations during 2013, including providing new screening equipment and detection and surveillance systems. The commencement of cargo screening services which were supposed to take place in 2013 have been delayed due to logistical issues, but Westminster expects to begin these operations in the summer of 2014, producing additional revenues from the contract.
It is continuing discussions over an East African airport project, although this has taken longer than it expected due to governmental processes, it said.
Westminster's Longmoor Security business underwent restructuring during the year, leading to a decline in revenue to GBP200,000 from GBP400,000.
Westminster said that whilst its technology division has a "substantial" pipeline of potential new business, it is the managed service division that offers it "dramatic growth prospects." Interest in long term contracts with potential sales value of over USD100 million continue to grow in the division, Westminster said.
However, Westminster stressed that the technology division provided support for its managed services business that had reduced its overall cash investment by eliminating the need for third parties and their associated margins.
"We are now in the foothills of what could be a substantial growth phase over the next few years," said Chief Executive Peter Fowler in a statement.
Shares in Westminster were trading down 4.7% at 56.20 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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