21st May 2015 09:24
LONDON (Alliance News) - Security company Westminster Group PLC Thursday reported a wider pretax loss for 2014 as revenue slumped by half due to the hit from the Ebola crisis on its operations in West Africa, although it gave a more positive outlook thanks to new contract wins and as the outbreak of the deadly disease subsides.
Westminster, which manages airport security at two airports in Ebola-hit west Africa, in Liberia and Sierra Leone, reported a pretax loss of GBP2.4 million for 2014, compared with the loss of GBP2.0 million it reported in 2013, as revenue from continuing operation slumped to GBP3.5 million from GBP7.4 million but was partly offset by cost reductions.
"2014 was a year defined largely by the Ebola crisis and our struggles to contain it. We take great pride in what we achieved, however additionally feel disappointment with the lower than expected sales during this difficult period. 2015 by contrast, given the progress during 2014 and the momentum our business is now experiencing, gives me and the board cause for optimism and we remain excited about our future growth prospects," Chief Executive Peter Fowler said in a statement.
At its worst point, the Ebola outbreak meant passenger volumes at the West African airports were just 30% of normal volumes.
It said passenger numbers in its West African airports are recovering as the Ebola outbreak subsides and airlines resume flights, while it has won several news contracts that should bolster its results in 2015.
Its technology division has won about USD2.4 million of orders in the first four months of 2015,, including a USD960,000 deal to help secure an "iconic" bridge in the US. Its managed services business also signed a memorandum of understanding with an unnamed government-owned airport authority in Asia for the long-term provision of airport security.
It is also set to start generating revenue from a new ferry service contract that it won in Sierra Leone last November. It's a 21 year concession and lease deal to manage and operate a number of recently constructed ferry terminals and a sea ferry transfer service, with a potential revenue of USD300 million over the life of the contract. In March of this year, it said it would buy a larger and more expensive ferry than initially planned as sea trials suggested passenger volumes will be over the initial contract scope. The ferry, the Sierra Queen, has now arrived in the country.
"In addition both divisions, Technology and Managed Services, are negotiating a number of sizeable potential projects and whilst of course there can be no certainty as to the outcome or timing of such discussions and whilst we obviously do not expect every prospect to reach contract stage, any one of these contracts can significantly add to our revenues, and several would transform our business beyond recognition," the company said.
Westminster had a cash balance of GBP1.18 million at the end of 2014, up from GBP0.71 million a year earlier, and raised GBP2.3 million gross in April by issuing convertible loan notes to further strengthen its balance sheet and support the launch of the new ferry service.
Still, Westminster Group shares were down 6.3% at 22.02 pence, and have fallen 58% over the past 12 months due to the impact of the Ebola crisis on the company.
By Steve McGrath; [email protected]; @stevemcgrath1
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