9th Dec 2015 09:46
LONDON (Alliance News) - Westminster Group PLC Wednesday said it has signed a memorandum of understanding with a government owned airport authority to supply security services for up to 25 years, and said it will launch its new ferry service shortly after months of delays.
The airport and country has not been named, a standard practice for the company who keeps its operations under lock and key for security reasons. It has signed the deal though its subsidiary Westminster Aviation Security Services.
"The airport is strategically located and is a key hub serving several million passengers per annum and growing. In addition, and in line with Westminster's strategy, the airport is in a region outside of the group's existing operations offering a further mitigation of risk through a broader spread of operations," said the company.
The subsidiary has mobilised a team to complete a detailed survey of the airport before entering into formal contract discussions.
Westminster also provided an operational update, and said it has completed the survey on the airport relating to a separate memorandum of understanding signed back in October. That MoU is with a non-West African government and arrangements are currently being made to make that deal formal.
At its flagship ferry service in Sierra Leone, which will use the company's Sierra Queen vessel to transport people from Freetown International Airport and the capital of Freetown, the company is hoping to begin sea trials "shortly" following several delays.
To put the demand for the ferry service into perspective, Westminster has previously said around 9,000 passengers passed through Freetown airport in March - which was its highest level in seven months, giving the company confidence demand for a ferry service was growing.
Back in March, Westminster decided to purchase its own vessel for the ferry services contract that it secured in November, which ended up being much larger and more expensive than originally envisaged.
The launch of the ferry service was then hit by delays because tests on the vessel showed repair work was required to ensure the boat was better suited to local climate conditions, involving work on air conditioning and hull strengthening. Following those repairs, Westminster was aiming to launch operations in August.
The company was then hit by further delays when one of the prop shafts on the vessel had to be removed and returned to the UK for repair - pushing its target to launch operations to September.
On Wednesday, Westminster said: "Whilst this process has been frustratingly slow due to the challenges involved in the country, once operations commence the new ferry service offers tremendous expansion opportunities, not only in the country concerned but also in neighbouring countries and I can report that we are already now in discussions with and undertaking feasibility studies regarding extending the services to other countries in the region."
The company's technology division has also faced a "disappointing year" in terms of revenue, but Westminster said it plans to deliver on a "substantial new and existing order pipeline" in 2016 as the division continues to chase a number of large scale opportunities and smaller contracts around the world, it said.
Most notably, it said the US Bridge project has commenced and the USD4.4 million consultancy contract in the Americas is expected to be recognised before the end of 2016.
Westminster Chief Executive Peter Fowler said the company currently has a total of four MoU's in place through its managed services division, three of which have been signed in 2015, including the one announced Wednesday and the one signed back in August.
The other two MoUs concern an Asian airport which serves 2.0 million passengers a year which is currently going through a parliamentary process and one in East Africa which is still live but "taking far longer than anticipated" because of local issues and bureaucracy.
"Whilst there is of course no certainty as to timing or the final outcome of these or any of the project opportunities in progress we believe the detailed discussions and works we have been undertaking and the current security situation worldwide are providing significant momentum and we will of course update the market on progress in due course," said Fowler.
Westminster shares were down 0.5% to 95.50 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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