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Westminster Group raises funds to benefit from recent contract wins

Last updated: 03:47 11 Dec 2014 AEDT, First published: 04:47 11 Dec 2014 AEDT

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Global security and managed services firm Westminster (LON:WSG) has raised funds to develop its ferry terminal business.

The company has raised £843,250 through the placing of 3.73mln shares at 25p a share with institutional and other investors, including directors of Westminster.

The company has also drawn down £156,750 from its equity financing facility, which entailed the issue to Darwin Strategic of 475,000 new shares priced at 33p each.

The money raised will primarily be used to support the acquisition of initial ferry craft and the development of infrastructure in relation to the 21-year concession and lease agreement with a government in West Africa, which it estimated would deliver revenues in the region of US$300mln over the life of the contract, for the management and operation of a number of ferry terminals, together with the provision of a sea ferry transfer service.

Details of this concession were announced on 19 November 2014, and the company said works to prepare the terminals and structure the business are already underway.

The company also recently announced a US$4.4mln government consultancy contract win in the Americas, and said these contract wins, when combined with the existing order book and run rate of the business, give it much improved visibility over 2015 revenues.

It also stated that the pipeline trials in the Americas, as announced in August, have been completed successfully and further discussions with the client are being held and they expect a positive outcome.

On top of that, the company now expects to make more savings than originally envisaged when it announced a cost savings drive in September. As such, the board of Westminster is confident its cash flow position has the near-term needs covered.

"During this growth phase of our business we continue to look at diverse funding options which are in the best interests of the company and its shareholders. This share issue was considered the best way to expedite the recently won contracts with a view to ensuring cash contribution to the group at the earliest opportunity,” said Peter Fowler, chief executive of Westminster.

“Debt funding, such as asset based lending or bank facilities, remain a potential route to support capital expenditure requirements for future projects and should become increasingly relevant as the group's cash flow profile matures and contract base expands,” he added.

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