19th June 2013
Westminster Group Plc:
AGM statement,
Synergy Loan Note Resolution and
Issue of New Convertible Secured Note
Westminster Group Plc ('Westminster' or 'the Company'), the AIM listed supplier of system solutions and products to the security, defence, fire protection and safety markets worldwide, is pleased to announce that at the Annual General Meeting of the Company, to be held at 10am today, Chief Executive, Peter Fowler, will make the following statement:
"In my report within the Annual Report and Accounts issued on 28th May 2013 I pointed out that over the past few years much of our efforts have been spent in building our international presence and that we had invested heavily in developing our agent network and establishing a strong global corporate brand. I further commented that we are now seeing the benefit of this effort and investment, and that our activities and achievements in 2012 and continuing progress in 2013, have positioned us for a step change in scale and size as we move to the next phase of our growth plans. I would now like to expand on that statement:
Restructuring and Development:
On 28th March this year we announced the disposal of our UK centric alarms and monitoring business and the restructuring of our business into two internationally focussed divisions - Managed Services (focussed on long term managed services contracts in airports, ports and other such facilities) and Technology (focussed on providing advanced technology led security solutions principally to governments and large 'blue chip' commercial organisations worldwide).
I am pleased to report that this restructuring is complete and that both divisions are extremely active. Our Managed Services division continues to expand its pipeline of potential airports and similar projects throughout Africa, Asia and South America and we are at various stages of discussions with a number of airports regarding long term security services. Our Technology division continues to receive high levels of enquiries from around the world, an increasing number of which are multi-million USD in value, such as the $3.25m USD contract we secured at the end of 2012 and which we now expect to ship within the next few weeks. Whilst there can be no certainty as to the outcome or timing of such projects we have confidence that both divisions are well placed for significant growth.
We continue to win business and deliver a broad range of products and services across the world and in recent weeks have secured numerous contracts in Africa, Middle East and Asia. In addition I am happy to report that a recent independent official audit of our operations in a West African airport has concluded that that in just 12 months of operations we have dramatically improved the security of the airport bringing in new technology, systems and staff training to such an extent that it is now considered at a level comparable with international airports in Europe and other developed regions in the world. We have also recently received very positive feedback from a major European airline as to the improvements we have brought to that airport and which, in their opinion, is now amongst the best in Africa. The airline further commented that they would be happy to see similar Westminster operations in other airports around Africa and would be happy to assist where possible. We see these comments as major endorsements of our airport security programs and believe these will help positivity impact future sales.
Synergy Loan Note Resolution:
I am pleased to announce that we have now reached a settlement with the liquidators of Synergy Capital Ltd ("Synergy") in respect of the £1m loan note entered into in June 2009.
In June 2009 Westminster entered into a 5 year convertible loan note agreement ("CLN") with Synergy for the sum of £1m paying a 10% pa coupon, payable quarterly. In October 2010, due to technical issues, a variation to the CLN occurred, resulting in additional charges (the "Charge") which Westminster has always challenged but had been paying and recognising such payments in its accounts.
In February 2013 Synergy was placed into liquidation by the Courts of Guernsey. The Liquidators of Synergy are now in agreement with Westminster that the Charge was incorrectly applied and that £300,000 of payments made by Westminster will now be treated as capital repayments, with the effect that the CLN will now be reduced to £700,000 and will revert back to the original terms in place at inception of the CLN.
I am delighted that this outstanding matter has been resolved and that the £300,000 costs associated with the disputed Charge have now resulted in a reduced CLN balance which will positively impact the 2013 results.
The matter has been an unwelcome distraction. With this resolved we have a regularised payment structure going forward and can focus fully on delivering on Westminster's potential.
Issue of New Convertible Loan Note ("NCLN"):
I am also pleased to announce the issue of £1.18m of New Convertible Loan Notes ("NCLN")
This instrument is initially secured against the assets of the operating subsidiaries and ranks behind banking facilities.
This new loan note facility of up to £4.0m of loan stock provides additional working capital to the Company to assist with financing new contracts and may also be used to reduce the remaining Synergy Loan Note which can be redeemed at any point prior to 29 June 2014 without a redemption premium. Furthermore a holder of £0.2m of the 2009 loan note has extended their investment in Westminster and has accordingly reinvested in the NCLN.
In conclusion, and as reported in our Annual Report - we have a solid order book, growing recurring revenues, improving gross margins, and a robust business plan and vision. We have clear strategic goals and objectives and a commitment to the continuing development of our operational infrastructure. We are delivering on our vision; we have a strong brand and are now seen as a truly global security business. We have a strong management team and an experienced board of Directors and I remain excited about our growth prospects for 2013 and beyond."
The key terms of the NCLN are set out below:
Conversion Price: 35p of NCLN converts into one ordinary 10 pence share
Interest Rate: 10% per annum payable quarterly in arrears
Maturity Date: 3 years from date of drawdown
Monitoring Fee: £25,000 per annum, can attend board meetings
Loan Note Size: The NCLN has the capacity for £4.0m of loan stock
Westminster may repay the debt without penalty after the first year provided that the average share price for the 15 days prior to repayment is 42 pence or more. Westminster may force conversion of the loan notes if the average share price on the 15 days before conversion is 65 pence or more. The NCLN holders may convert at any time during the term of the instrument at the holders option
For further information please contact:
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Westminster Group plc |
Tel: 01295 756 300 |
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Peter Fowler (Chief Executive) |
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Ian Selby (Chief Financial Officer) |
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S. P. Angel Corporate Finance LLP (NOMAD + Broker) |
Tel: 020 3463 2260 |
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Stuart Gledhill/Katy Birkin |
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Winningtons Financial (Financial PR) |
Tel: 020 3176 4722 |
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Tom Cooper/Paul Vann |
0797 122 1972 |
Notes:
Westminster Group plc is a leader in the supply of system solutions and products to the security, defence, fire protection and safety markets worldwide.
Westminster's principal activity is the design, supply and ongoing support of advanced technology security solutions, encompassing a wide range of surveillance, 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 manned services, consultancy and training services. The majority of its customer base, by value, comprises governments and government agencies, non-governmental organisations (NGO's) and blue chip commercial organisations. For further information please visit www.wg-plc.com or www.wi-ltd.com