2 June 2011
Westminster Group plc:
2010 Preliminary Announcement
Westminster Group plc ('Westminster', 'the Company' or 'the Group'), the AIM listed supplier of system solutions and products to the security, defence, fire protection and safety markets worldwide, is pleased to announce its preliminary results for the 12 months ended 31 December 2010.
Key points for the year:
· Continued expansion of international distribution network to over 45 countries offering unique in-country representation, knowledge and support
· New agents amongst others in Vietnam, Brazil, Colombia, Morocco and Latvia
· Record number of delegates trained by our close protection business Longmoor
· Exclusive distribution agreement for heart beat scanning equipment in UK
· Acquisition of niche security specialist CTAC Limited for £825,000
· Contracts won in fields of: Intruder Detection, Fever Detection, Access Control, Command & Control, Blast Film Protection, Overt & Covert Scanning Equipment, Close Protection, Countermeasures Equipment, Explosive Detection Equipment and Fire Prevention
· Placings to raise £2.27m in aggregate before expenses
· Underlying loss from operations £2.77m
· Net assets at 31 December 2010, £2.24m
· Net cash at 31 December 2010, £0.26m
Post year end:
· £11.9m of new orders won to date, including:
· Multi million pound scanning order, expected completion in 2011
· Multi million pound order for the Middle East, expected completion in Q1 2012
Commenting on the results, Peter Fowler, Chief Executive of Westminster Group, said:
"Whilst 2010 suffered a downturn due to delayed contract awards, we have made an extremely positive start to 2011 with several significant contract awards being announced, including two multi-million pound contracts for expected delivery within the next 12 months. In January we announced a major contract award for mobile surveillance vehicles, which was then our largest contract award to date, and have given an update to the market today.
"We have since announced an even larger contract for the supply of integrated security solutions to high profile sites in the Middle East. This contract involves the protection of a number of high profile sites within the Middle East and involves the provision of advanced detection and surveillance equipment including radars, sonars and thermal imaging surveillance equipment networked to an advanced integrated central Control & Command system.
"The above two orders show a step change in the size and value of project we are now securing and bode well for future trading. As at 31 May 2011 we have received £11.9 million of orders so far this year, which means that our order book is at its highest level ever, the majority of which we expect to deliver by the year end. We also have a number of other significant contracts under negotiation. Our enquiries are running at record levels and we have our largest ever active quote bank.
"We continue to demonstrate our ability to deliver complex and innovative solutions and secure a broad range of contracts in our target markets globally. Westminster's reputation in these markets is significantly enhanced with each contract delivered.
"We have a solid order book, a robust business plan and vision, clear strategic goals and objectives and a commitment to the continuing development of our operational infrastructure. We have a strong management team and an experienced board of Directors. Accordingly we are confident of a solid performance for 2011 and exciting growth prospects beyond."
Annual Report and Accounts
Copies of this preliminary results announcement are available from the Company's website (www.wg-plc.com). Copies of the Annual Report and Accounts will be sent to shareholders by 6 June 2011 for approval at the Annual General Meeting to be held on 28 June 2011.
Enquiries:
Peter Fowler 01295 756 300
Chief Executive - Westminster Group Plc
Nicholas Mearing-Smith 01295 756 300
Finance Director - Westminster Group Plc
Alex Clarkson 0161 831 1512
Nick Cowles
Zeus Capital Limited - Nominated Adviser
John Grant / Karen Kelly 020 7101 7070
XCAP Securities PLC - Broker
Tom Cooper/Paul Vann 020 3176 4722
Winningtons Financial 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, risk assessments and close protection services. These can range from product only assignments, such as the supply of specialised scanners, to the design and implementation of an integrated system solution such as a border detection and surveillance system. The majority of its customer base, by value, comprises governments and government agencies, non governmental organisations and blue chip commercial organisations.
For further information please visit www.wg-plc.com
Chairman's statement
Overview
I am pleased to present the preliminary results of Westminster Group plc for the year ended 31 December 2010. Whilst the results show a reduction in revenues for the year and an underlying loss from operations of £2.77million, I am pleased to report that our international reputation and demand for our services continues to grow as illustrated by the current order book and our enquiry activity is now at an all-time high. The downturn we experienced during the challenging economic conditions of 2010 was due to delays on expected major contract awards from our governmental and blue chip client base. I am pleased to report, however, that we have started 2011 on a particularly strong note with several of the contracts we expected to secure in 2010 being won in early 2011, including two multi-million pound contracts, which are the largest we have won to date.
Market
Despite continued global economic uncertainties we believe the market for security, defence, fire and safety solutions will continue to develop as recent events in North Africa and the Middle East illustrate only too well. Organisations throughout the world remain mindful of the need to protect their infrastructure, their assets and their people. Westminster, with its global presence and growing international reputation, is well placed to take advantage of such opportunities.
A key strength of our business model is the wide-ranging network of agents and offices we have established and continue to expand around the world.
We are a British based but internationally focussed business with our focus outside of the UK being predominantly the Middle East, Asia and Africa. This network means we can carry out our international business in a very cost effective manner and ensures scalability in our operations. We have agents located in all the countries in which we wish to operate. Although we cover a wide range of countries, we focus our efforts on countries where our skills and expertise can be of most benefit and do not actively pursue other markets.
Staff
As a service based business our staff are vital to the continued growth and development of our business. We are fortunate in having a highly committed and dedicated workforce who have performed exceptionally well during a difficult period and I warmly thank them for all their hard work and effort during the past year.
Summary
2011 has started on a strong note with a number of significant new contract awards and the Directors believe the Company will show considerable organic growth in 2011.
Finally I would also like to thank you, our shareholders, for your continued support.
Lt. Col. Sir Malcolm Ross GCVO, OBE
Chairman
Chief Executive Officer's report
Overview
The Group's principal activity remains the design, supply and ongoing support of advanced technology security, defence, fire and safety solutions, together with risk management, close protection and training services. Our principal clients are governments and related agencies, non-governmental organisations (NGOs), military establishments, airports, sea ports, banks, power stations and blue chip commercial organisations worldwide.
2010 was a challenging year with the continued global uncertainty of the economic downturn causing our government and corporate clients around the world to defer their spending plans. As a consequence, after three years of growth in turnover, we experienced a downturn in revenues resulting in an underlying loss from operations of £2.77 million for the year. The results however do not reflect the success of the Company during the year in building its international reputation and presence, evidenced by the significant increase in enquiries received, which by the year end was at its highest ever level.
We continue to be focussed on providing niche products and services for niche markets worldwide and in 2010 we successfully delivered a wide range of products and services which illustrate that focus.
The scope of our services ranges from the regular supply of a wide array of products and services to the design and provision of large scale major projects to our governmental and commercial clients worldwide. Whilst the provision of large scale major projects may have long lead times and can be subject to delays as experienced in 2010 it is such projects that we believe will deliver substantial growth to the Company in due course. In this respect we made good progress in 2010 and we are currently negotiating a number of important potential major projects any one of which, if secured, would be transformational.
Our Market
Our market is wide and diverse with intense competition in certain areas, whilst having under-developed, fragmented competition in others. These latter areas are the primary focus of our international activities.
Whilst we have a presence and operate in around 45 countries, our market focus outside of the UK is predominantly the Middle East, Asia and Africa with a growing interest in Eastern Europe and South America. We have made, and continue to make, significant investment in building up our international presence and agency network which, together with the marketing strategy we have developed, provide Westminster with a competitive advantage and I believe we are therefore well placed to achieve significant growth from the many opportunities presented in our focused markets.
Our acquisition of CTAC extends our market into the high security and utilities market as well as opening up new markets in the extensive area of remote monitoring and surveillance whilst our Longmoor Security division further extends our market focus and capabilities with the provision of risk management, close protection and training services to high net worth clients, corporations and government bodies worldwide.
Strategy
We believe success in our target markets requires meeting exacting criteria: credibility, financial stability, professionalism and experience, with a demonstrable track record and, crucially, 'in-country' knowledge and connections. These, together with the political and logistical issues presented in many countries, present a significant barrier to entry for many companies, yet provide a major opportunity for a company such as Westminster, which has the right credentials and an extensive local support network. Our target clients are potentially high value repeat order customers with demanding performance criteria.
We have demonstrated our ability to deliver complex and innovative solutions to an impressive list of clients worldwide and have therefore clearly established credibility and a demonstrable track record with governments and blue chip organisations, which stand us in good stead to secure and deliver increasing business within this target market.
We have, in recent years, devoted much of our efforts to establishing a credible worldwide network of agents who can provide in-country logistics support, manpower, intelligence and, critically for our clients, on-going service support once we have provided the goods or services. We now have an extensive agent network in over 45 countries covering every continent with the exception of Antarctica, which has undoubtedly helped us achieve our global exposure. However, our strategy is to build on and improve this network, replacing underperforming agents and in key markets appointing 'Super Agents', who have the size and financial strength to prime and finance major contracts in their regions. We have already appointed super agents in the UAE and Qatar and are in discussions with potential super agents in Iraq, Saudi Arabia and a number of other countries.
Our strategy is to deliver significant growth via the successful deployment of major projects whilst increasing the flow of smaller product and services sales. We recognise however that this can lead to lumpy revenue depending on the timing of contracts, which was the strategic objective of acquiring CTAC in order to acquire its 24 hour Alarm Receiving Centre (ARC) which generates regular recurring revenue and has substantial capacity for expansion. We are now in the process of establishing the ARC as its own operating division under the name of International Monitoring Services and are already in discussions with several major corporations regarding the provision of large scale monitoring services, which, if successful, would generate significant additional recurring revenue. The installation and maintenance business of CTAC will be merged with our existing UK systems integrator RMS.
We have now established Longmoor Security as a leading training provider for ex-military personnel wishing to obtain SIA licensing to operate as close protection officers and our strategy going forward is to extend the number and scope of the training courses provided both within the UK and overseas. We are also looking to extend the scope of its close protection operations and risk assessment studies worldwide.
We are not a manufacturer and are not therefore tied to any one single product or technology. As a solutions provider, we offer a broad range of products and services from manufacturers all over the world, wherever possible negotiating advantageous or exclusive rights prior to promoting them to our target client base. We believe that one of the key strengths of the Group is our ability to bring together and integrate a wide range of technologies from different sources to produce comprehensive bespoke solutions suited to clients' needs.
We are committed to delivering this strategy both through organic growth and by strategic and targeted acquisitions.
Marketing
Due to the global nature of our business, an effective web presence is an important aspect of our marketing strategy. We have established a major website presence for each of our operating companies as well as our Investor based Group website and we continue to invest heavily in search engine optimisation. Our international website is particularly successful and is believed to be one of the largest security product websites in the world running into hundreds of pages. We are currently creating multi lingual versions of key pages including an extensive Russian version with the assistance of our Ukrainian agent.
Our various group websites are as follows:
· www.wg-plc.com Westminster Group plc
· www.wi-ltd.com Westminster International Ltd
· www.longmoor-security.com Longmoor Security Ltd
· www.rms-is.com RMS Integrated Security Ltd
· www.c-tac.net CTAC Ltd
All websites are fully interactive and provide an excellent showcase for the Group's extensive range of products and services.
We also have a number of Group videos which can be viewed on the various websites or on the Westminster Channel on Youtube - http://www.youtube.com/user/WestminsterGroup.
Our various Group brochures may be found here - http://www.wg-plc.com/media/brochures.
Westminster's growing international reputation is evidenced by the increasing number of events and lectures that the Company is asked to attend or speak at.
In March 2010 Westminster Group Plc provided the keynote speaker on security issues facing the Oil and Gas industries at the prestigious Oceantex 2010 Conference & Exhibition in Mumbai.
Business review
2010 was a difficult year in terms of revenue and earnings due to delayed orders in a continuing uncertain economic climate. Nevertheless the year was a success in terms of the continued enhancement in the quality and size of enquiries in which we are involved, the number and size of quotations issued, acquisition, new strategic investors and the overall activity of the various Group companies.
CTAC
On 15 April 2010 we acquired CTAC Limited. CTAC is a specialist integrated provider of 'high end' security solutions to a blue chip client base and which operates in operationally critical, high value and high profile fields such as cash handling, bullion storage, jewellery and diamond merchants, chemical storage and utilities.
A key strength of the business is its 24hour Alarm Receiving Centre (ARC) which is built, operated and certificated to the National Security Inspectorate (NSI) Gold standard, the highest level of such certification in the UK. The ARC operates as a 24/7 control & command centre and monitors alarm and video signals from over 1,000 systems across the UK, producing a strong recurring revenue stream.
Founded in 2004, CTAC operates from a 3,000sq ft premises in Kidderminster, UK, supporting clients primarily within the UK but with a growing interest and significant market potential internationally.
The addition of CTAC to the Group continues Westminster's expansion through the integration of complementary services. Synergistic benefits of the acquisition include:
· Niche business in sector and good fit with Westminster's core business;
· 24 hour Control & Command facility and Alarm Receiving Centre is a major enhancement to the Group's service operations presenting cross selling opportunities to other Group companies and international clients operating across international time zones;
· Opportunity to add new services such as 24 hour travel advice, emergency medical and hostile extraction services to overseas travellers and third party remote monitoring and call centre services; and;
· Ready built nationwide service team and infrastructure to serve Westminster's increasing UK customer base, including Westminster's recently announced contract with the Ministry of Justice covering 139 Prisons in England and Wales.
The extent of these opportunities means that the Board remains confident that CTAC will prove to have been a worthwhile acquisition.
A review of business activities by region is given below:
The Middle East
The Middle East is a key focus market for us and one we have been actively developing throughout the year. We have increased our agency representation including the appointment of super agents in the UAE and Qatar and are in discussions with suitable companies to become super agents in Iraq and in Saudi Arabia.
We delivered a range of solutions in the Middle East including blast protection to various countries in the region, explosive detection equipment and training, various scanning and screening systems and are currently in advanced negotiations with several governments and major clients in the region on several very sizeable potential projects.
In October 2010 we hosted a high level delegation from the Ministry of Interior in Iraq to discuss and see field trials of a confidential multi million dollar project we have been in discussions about for sometime and which could result in significant business in the region.
In December 2010 we also hosted a delegation from the UAE Navy for presentations and trials of marine security solutions. This followed a multi-million dollar bid submission by Westminster for a marine security solution at naval facilities. The meetings and trials went very well and Westminster has been shortlisted as a potential supplier. In March 2011 a second high ranking UAE naval delegation visited Westminster for further discussions on an increased scope of works.
Our contract for the installation of an advanced security net across the river Nile to protect the new Nagaa Hammadi Dam complex in Egypt is well underway and, despite minor disruption during the recent troubles in Egypt, the project is on course for completion in 2011.
The ability to design and deliver wide and diverse creative solutions of this nature, addressing difficult security issues is, we believe, what distinguishes Westminster in the market.
Africa
Africa remains an important market for us and one where we see significant business opportunities for the future. During 2010 we continued to secure a wide range of contracts for a diverse range of equipment in the region. For example we provided fever screening equipment to Libya, electronic ordinance disposal equipment to an East African Government and various x-ray scanning solutions to clients in the region.
Our major contracts for a complete airport security solution at Juba Airport in Southern Sudan and for a comprehensive surveillance solution for the National Bank of Ethiopia are both progressing well and both are expected to be completed in 2011. Both contracts have also been subject to increased scope of work and extension contracts.
The Americas
We see South America as a potential growth market and our activities in the region continue to grow. As a result we have appointed new agents in Brazil and Colombia. We have secured a number of valuable smaller orders in the region, including risk assessments on potential major projects. We are not focussed on winning business in North America at this time.
Asia Pacific
The Asia Pacific region is also a focus area for the Group where we anticipate growing demand for our services. We have received a number of significant enquiries for our products and services in the region during 2010 and secured a number of contracts including frequency jamming equipment to an Asian Government, silent drilling equipment for covert operations to an Asian security service, fire detection equipment to both New Zealand and Australia as well as numerous sales of x-ray screening and bomb disposal equipment within the region. We have also already secured further significant contract wins in early 2011.
UK & Europe
As reported earlier we are focussed on providing niche products and services to an international marketplace. The UK and Europe are important markets for us and our acquisition of CTAC during the year and the addition of the Alarm Receiving Centre (ARC) that was part of the acquisition, means that we are now expanding our customer base in the region with a broader range of products, services and security solutions, with a focus on delivering recurring revenue streams through monitoring services. The ARC is being separated from the CTAC business under the name of International Monitoring Services allowing the business to operate independently from the installation side of the business and therefore be more attractive to other installers and users of monitoring services. We are already in discussions with several major retailers regarding their monitoring requirements.
During the year we continued to supply and support HM Prisons, under the four-year framework contract with the UK Ministry of Justice (MoJ), relating to the supply and maintenance of various security equipments for UK Prisons. The MoJ oversees the operation of 139 prisons in England and Wales with varying levels of security requirements. Despite the cutbacks experienced within the MoJ we are now seeing increased activity and a growing demand for the Group's services. In addition we have begun to supply prisons and correctional facilities outside of the UK.
RMS continued to suffer from the downturn in construction activity within the UK. However during the period RMS did increase its recurring revenue stream by over £60,000. Going forward the RMS business is being merged with the installation and maintenance business of CTAC and the business refocused away from construction.
Longmoor Security made good progress in 2010, increasing its revenues by 175%. Its training courses for ex military personnel wishing to obtain SIA licences to work in the private security arena were well subscribed and the company ran regular accredited close protection training courses throughout the year.
Management & Staff
We started 2010 with 45 staff which by the year end had grown to 70, including our overseas operatives.
Share issues
During the year we have issued ordinary shares to raise £2.27 million before expenses. This included investment from new institutional shareholders and strategic investments from business partners.
Current trading and outlook
Whilst 2010 suffered a downturn due to delayed contract awards, we have made an extremely positive start to 2011 with several significant contract awards being announced, including two-multi million pound contracts. In January we announced a major contract award for mobile surveillance vehicles, which was then our largest contract award to date and is now expected to be fully completed by the end of the year.
We have since announced an even larger contract for the supply of integrated security solutions to high profile premises in the Middle East. This contract involves the protection of a number of high profile buildings within the Middle East and involves the provision of advanced detection and surveillance equipment including radars, sonars and thermal imaging surveillance equipment networked to an advanced integrated central Control & Command system.
The above two orders show a step change in the size and value of projects that we are now securing and bode well for future trading. As at 1 June 2011 we have received £11.9 million of orders so far this year, which means that our order book is at its highest level ever. We also have a number of other significant contracts under negotiation. Our enquiries are running at record levels and we have our largest ever active quote bank. The timing of orders and the delivery of such is, of course, difficult to forecast with certainty and can be delayed by matters beyond the Company's control.
We continue to demonstrate our ability to deliver complex and innovative solutions and secure a broad range of contracts in our target markets globally. Westminster's reputation in these markets is significantly enhanced with each contract delivered.
We have a solid order book, a robust business plan and vision, clear strategic goals and objectives and a commitment to the continuing development of our operational infrastructure. We have a strong management team and an experienced board of Directors. Accordingly we are confident of a solid performance for 2011 and exciting growth prospects beyond.
P.D. Fowler
Chief Executive Officer
Finance Director's report
General
The revenues of the business fell in 2010 to £3.8 million, 52% lower than in 2009. Principally as the result of this fall in revenues and the impairment of goodwill, we made a loss after tax for the year of £3.822 million, compared with a profit of £121,000 in 2009. The net cash reserves of the Group at 31 December 2010 were £0.3 million (2009: £0.2 million).
Income statement
The revenue reduction in 2010 to £3.8 million (2009: £7.9 million) was primarily attributable to delays in placing orders by our principal government customers, rather than losing bids for contracts. In 2010 UK and Europe represented 57% of revenues (2009: 34%), whereas Africa only represented 16% of revenues (2009: 53%).
Our gross profit in 2010 fell to £399,000 (2009: £2.75 million), as discussed under gross profit margin below.
Administrative expenses increased by 76% over the year to £4.57 million (2009: £2.60 million). £763,000 of this increase is impairment of goodwill, £430,000 is the administrative costs of CTAC, which was acquired during the year, £545,000 is a provision for bad debt against a specific client and £38,000 the acquisition costs of CTAC. In 2010 the Group benefitted from invoicing in dollars and holding dollars to the extent of £93,000, whereas in 2009 we had foreign exchange losses of £73,000. Excluding the impairment of goodwill, CTAC administrative costs, the bad debt provision, CTAC acquisition costs and currency gains or losses, our comparable administrative expenses rose by 14% year on year (2009: 11%). We continue to keep costs under tight control, whilst ensuring that we spend sufficiently to support our continuing growth.
Financing costs were £190,000 for the year (2009: £116,000), £174,000 of this cost was the effective interest cost on the Convertible Loan Notes that were issued on 29 June 2009 (2009: £82,000). Finance income was £136,000 (2009: £107,000), which was all attributable to the fair value movement relating to the embedded derivative in the Convertible Loan Notes.
We have increased the deferred tax asset from £347,000 in 2009 to £770,000 in 2010. The deferred tax asset does not reflect all the tax losses that are available to the Group, but only those that the Directors consider will be usable in the foreseeable future based upon current trading
Segmental performance
Our advanced technological division, Westminster International, saw revenues reduce by 72%, which resulted in a loss after tax of £1,356,000 (2009: profit £239,000). Our low voltage division, RMS, saw a reduction in revenues of 73%, and also came under margin pressure, largely as the result of the downturn in the construction industry. As a result the loss after tax increased from £165,000 in 2009 to £533,000 in 2010. Our close protection division, Longmoor Security, generated a loss after tax of £851,000 (2009:£134,000). Although revenues increased by 164% on a year on year basis, a bad debt provision of £562,000 reversed the benefit of that revenue increase.
Balance sheet
At 31 December 2010 the Group had shareholders' equity of £2.24 million (2009: £3.8 million). The Group's principal tangible assets are £0.3 million cash (2009: £0.2 million) and the 4.5 acre freehold head office site in Oxfordshire. The site was valued as at 31 December 2010 at £890,000.
Trade receivables were £0.90 million at 31 December 2010 (2009: £3.60 million). On the Juba contract $194,000 was due at 31 December 2010 (2009: $3.4million).
The Group has contracts that straddle financial periods and that are closer to completion than invoicing would suggest; this has enabled the Group to recognise amounts recoverable on contracts of £663,000 that will be invoiced in 2011 (2009: £94,000). 792,683 new ordinary shares were issued in the year as part of the consideration for the acquisition of CTAC Limited. They were issued at a price of 41p each, thereby generating a premium of £246,000 taken to merger relief reserve. In the statement of changes of equity this amount has been utilised against the impairment of goodwill recognised in the income statement. In the accounts of the Company the merger relief reserve has been utilised against the impairment in value of CTAC.
During 2010, 8,546,000 new ordinary shares were issued for total cash proceeds before expenses of £2.27 million, generating a total share premium of £1.41 million. Part of the share premium has been utilised in relation to the direct costs of those issues, which totalled £350,000 (2009: nil).
Liabilities include trade payables which totalled £753,000 at 31 December 2010 (2009: £518,000). Deferred income stands at £188,000 (2009: £423,000) and represents invoices raised on which the revenue has not yet been recognised on a number of contracts. Accruals and other payables have risen to £231,000 at the year end (2009: £179,000) and represent a number of relatively minor items. Finance lease liabilities totalling £192,000 (2009: nil) have been recognised as onerous leases, as the Directors do not consider that these leases for software and equipment represent ongoing assets of the business.
One unusual aspect of our balance sheet is the need to provide performance bonds, advance payment guarantees and bid bonds underwritten by our bank in respect of various contracts that we have secured or are seeking. Our bank facility used to provide for a maximum of £545,000 of such bonds to be outstanding at any one time, but has now been limited to those bonds currently outstanding of £232,000. If the total of bonds outstanding exceeds that figure, then the excess has to be locked up as cash on deposit to secure the bonds. In May 2011 the Company entered into a short term loan agreement for £150,000, which is repayable in July 2011.
Cash flows
The Group had net cash inflows of £59,000 (2009: outflow £370,000), which comprised operating cash used of £1.2 million (2009: £1.2 million), investing cash used £755,000 (2009: £185,000) and financing activities cash generated of £1.98 million (2009: £1.02 million). The operating cash used is primarily owing to the losses for the year, reduced by a reduction in working capital of £1.92 million, (2009: increase £1.47 million); cash used relates mainly to the acquisition of CTAC.
Gross profit margin
Gross profit margin in 2010 fell to 10.5% (2009: 34.6%). Our gross margins are a function of the mix of business with large complex projects tending to generate higher gross profit margins than the more straightforward supply of products. In 2010 there was limited revenue from larger projects and certain UK contracts made losses, partly attributable to the problems in the UK construction industry.
Earnings per share
The Group recorded a basic loss per share of 20.54 pence (2009: earnings per share 0.82 pence).
Key performance indicators
The main performance indicators used in 2010 were gross profit margin, operating profit and loss and individual job profitability. The Group management information contains significant detail concerning operational performance and, in addition to the above measures, the Board reviews the ratio of operating profit to operating cash flows, administrative expenses compared to budget as well as debtor ageing and revenue visibility.
In addition to the main financial indicators, the Board reviews a range of non-financial indicators. The business is long-term in nature, meaning that decisions concerning major projects can take years to develop to the point of order. Therefore operational management monitors enquiry activity very closely. The Group maintains an extensive quote book of live enquiries which are reviewed on a regular basis with all call activity logged. We particularly focus on those enquiries where decisions are expected imminently. In addition, the number and average size of orders are carefully reviewed to identify any emerging trends in order sizes or products demanded. The use of these extensive indicators ensures that we are informed of, and in control of, the finances of the Group.
The following table shows the key non-financial indicators that are relevant to the Group:
|
|
|
2008 |
2009 |
2010 |
|
|
|
|
|
|
|
Number of enquiries from potential or existing customers |
|
1,456 |
2,373 |
3,768 |
|
Number of orders placed |
|
465 |
454 |
662 |
|
Value of orders placed |
(£m) |
7.0 |
7.8 |
3.2 |
The number of enquiries is rising substantially each year, which is an important indicator of the effectiveness of the Group's marketing efforts. It can be seen that the number of orders fell in 2009, but rose again in 2010. However the value of orders placed in 2010 fell significantly, as described elsewhere in this report. This demonstrates that the lack of one or two expected major orders in a single year can have a very significant effect on the results for the year. However, the value of orders received so far in 2011 is £11.9 million, the highest level that the Group has known, which is the basis for the Directors' belief that 2011 is likely to show a substantial improvement over 2010.
Acquisition of CTAC Limited
On 15 April 2010 Westminster Group plc acquired the entire issued share capital of CTAC Limited for an initial consideration of £825,000, which was satisfied by £500,000 in cash and the balance of £325,000 by the issue of 792,683 new ordinary shares of 10p each in Westminster at 41p on the date of completion. In each of the two years following completion, a calculation of net profit before tax will be made and, on the basis of that calculation, two performance based payments will be made of 40% of those profits, if earned, up to a maximum aggregate additional payment of £1 million. Based upon the budgeted profitability of CTAC, no deferred contingent consideration would become payable in respect of 2010 or 2011.
A claim for £740,000 is being made against the vendors of CTAC under the terms of the Sale and Purchase Agreement. Nevertheless the Directors believe that CTAC will prove to be valuable addition to the Group.
N. P. Mearing-Smith
Finance Director
Consolidated statement of comprehensive income
for the year ended 31 December 2010
|
|
|
2010 |
|
2009 |
|
|
Note |
|
|
|
|
|
|
£'000 |
|
£'000 |
|
Revenue |
2 |
3,797 |
|
7,948 |
|
Cost of sales |
|
(3,398) |
|
(5,197) |
|
Gross profit |
|
399 |
|
2,751 |
|
Administrative expenses |
|
(4,568) |
|
(2,602) |
|
(LOSS)/PROFIT FROM OPERATIONS |
|
(4,169) |
|
149 |
|
|
|
|
|
|
|
Analysis of (loss)/profit from operations |
|
|
|
|
|
(Loss)/profit before net finance costs, tax, exchange gains and losses, impairment of goodwill, impairment of property, plant and equipment and exceptional bad debt (Underlying (loss)/profit from operations) |
|
(2,770) |
|
222 |
|
Exchange gains/(losses) |
|
93 |
|
(73) |
|
Acquisition costs |
|
(38) |
|
- |
|
Impairment of goodwill |
|
(763) |
|
- |
|
Impairment of property, plant and equipment |
|
(146) |
|
- |
|
Exceptional bad debt |
|
(545) |
|
- |
|
(Loss)/profit from operations |
|
(4,169) |
|
149 |
|
|
|
|
|
|
|
Financing costs |
3 |
(190) |
|
(116) |
|
Finance income |
3 |
136 |
|
107 |
|
(LOSS)/PROFIT BEFORE TAX |
|
(4,223) |
|
140 |
|
Income tax |
|
383 |
|
(19) |
|
(LOSS)/PROFIT FOR THE YEAR ATTRIBUTABLE TO EQUITY SHAREHOLDERS |
|
(3,840) |
|
121 |
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME: |
|
|
|
|
|
Revaluation of non-current assets |
|
14 |
|
- |
|
Deferred tax liability on revaluation of non-current assets |
|
4 |
|
- |
|
TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO EQUITY SHAREHOLDERS |
|
(3,822) |
|
121 |
|
|
|
|
|
|
|
(LOSS)/EARNINGS PER SHARE ON CONTINUING ACTIVITIES: |
|
|
|
|
|
Basic in pence |
4 |
(20.54) |
|
0.82 |
|
Diluted in pence |
4 |
(20.54) |
|
0.81 |
|
|
|
|
|
|
All the activities of the Group are classed as continuing.
Consolidated statement of financial position
for the year ended 31 December 2010
|
|
|
2010 |
|
2009 |
|
|
|
£'000 |
|
£'000 |
|
Goodwill |
|
397 |
|
578 |
|
Other intangible assets |
|
323 |
|
41 |
|
Property, plant and equipment |
|
1,164 |
|
1,137 |
|
Investment in subsidiaries |
|
- |
|
- |
|
Trade and other receivables |
|
1 |
|
10 |
|
Deferred tax asset |
|
727 |
|
350 |
|
TOTAL NON-CURRENT ASSETS |
|
2,612 |
|
2,116 |
|
Inventories |
|
229 |
|
232 |
|
Trade and other receivables |
|
1,797 |
|
3,765 |
|
Cash and cash equivalents |
|
261 |
|
202 |
|
TOTAL CURRENT ASSETS |
|
2,287 |
|
4,199 |
|
TOTAL ASSETS |
|
4,899 |
|
6,315 |
|
Share capital |
|
2,425 |
|
1,492 |
|
Share premium |
|
3,369 |
|
2,304 |
|
Merger relief reserve |
|
299 |
|
299 |
|
Share based payment reserve |
|
27 |
|
22 |
|
Revaluation reserve |
|
134 |
|
116 |
|
Retained earnings |
|
(4,010) |
|
(416) |
|
TOTAL SHAREHOLDERS' EQUITY |
|
2,244 |
|
3,817 |
|
Trade and other payables |
|
141 |
|
181 |
|
Borrowings |
|
897 |
|
843 |
|
Embedded derivative |
|
48 |
|
184 |
|
Deferred tax liabilities |
|
97 |
|
104 |
|
TOTAL NON-CURRENT LIABILITIES |
|
1,183 |
|
1,312 |
|
Borrowings |
|
- |
|
- |
|
Trade and other payables |
|
1,472 |
|
1,186 |
|
TOTAL CURRENT LIABILITIES |
|
1,472 |
|
1,186 |
|
TOTAL LIABILITIES |
|
2,655 |
|
2,498 |
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
4,899 |
|
6,315 |
Consolidated statement of changes in equity
for the year ended 31 December 2010
|
|
|
|
|
|
|
|
|||||||||
|
|
|
Share capital |
Share premium |
Merger relief reserve |
Share based payment reserve |
Revaluation reserve |
Retained earnings |
Total |
|
||||||
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
AS OF 1 JANUARY 2010 |
1,492 |
2,304 |
299 |
22 |
116 |
(416) |
3,817 |
|
||||||
|
|
Share based payment charge |
- |
- |
- |
8 |
- |
- |
8 |
|
||||||
|
|
Deferred tax adjustments |
- |
- |
- |
(3) |
- |
- |
(3) |
|
||||||
|
|
Issue of shares for the acquisition of subsidiary |
79 |
- |
246 |
- |
- |
- |
325 |
|
||||||
|
|
Exercise of share options |
2 |
- |
- |
- |
- |
- |
2 |
|
||||||
|
|
Other share issues |
852 |
1,415 |
- |
- |
- |
- |
2,267 |
|
||||||
|
|
Cost of other share issues |
- |
(350) |
- |
- |
- |
- |
(350) |
|
||||||
|
|
Merger relief reserve utilised in respect of impairment of value of associated subsidiaries |
- |
- |
(246) |
- |
- |
246 |
- |
|
||||||
|
|
TRANSACTIONS WITH OWNERS |
933 |
1,065 |
- |
5 |
- |
246 |
2,249 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Loss for the year |
- |
- |
- |
- |
- |
(3,840) |
(3,840) |
|
||||||
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
||||||
|
|
Revaluation of non-current assets |
- |
- |
- |
- |
14 |
- |
14 |
|
||||||
|
|
Deferred tax liability on revaluation of non-current assets |
- |
- |
- |
- |
4 |
- |
4 |
|
||||||
|
|
TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO SHAREHOLDERS |
- |
- |
- |
- |
18 |
(3,840) |
(3,822) |
|
||||||
|
|
AS AT 31 DECEMBER 2010 |
2,425 |
3,369 |
299 |
27 |
134 |
(4,010) |
2,244 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
AS OF 1 JANUARY 2009 |
1,402 |
2,304 |
- |
14 |
116 |
(537) |
3,299 |
|
||||||
|
|
Share based payment charge |
- |
- |
- |
6 |
- |
- |
6 |
|
||||||
|
|
Deferred tax adjustments |
- |
- |
- |
2 |
- |
- |
2 |
|
||||||
|
|
Issue of shares for the acquisition of subsidiary |
90 |
- |
299 |
- |
- |
- |
389 |
|
||||||
|
|
TRANSACTIONS WITH OWNERS |
90 |
- |
299 |
8 |
- |
- |
397 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Profit for the year |
- |
- |
- |
- |
- |
121 |
121 |
|
||||||
|
|
TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO SHAREHOLDERS |
- |
- |
- |
- |
- |
121 |
121 |
|
||||||
|
|
AS AT 31 DECEMBER 2009 |
1,492 |
2,304 |
299 |
22 |
116 |
(416) |
3,817 |
|
||||||
Consolidated statement of cash flows
for the year ended 31 December 2010
|
|
2010 |
|
2009 |
|
|
£'000 |
|
£'000 |
|
(LOSS)/PROFIT BEFORE TAX |
(4,223) |
|
140 |
|
Adjustments |
1,139 |
|
130 |
|
Net changes in working capital |
1,923 |
|
(1,474) |
|
NET CASH OUTFLOW FROM OPERATING ACTIVITIES |
(1,161) |
|
(1,204) |
|
INVESTING ACTIVITIES: |
|
|
|
|
Purchase of property, plant and equipment |
(187) |
|
(126) |
|
Purchase of intangible assets |
(1) |
|
(15) |
|
Cash costs of acquisition of subsidiary net of cash acquired |
(579) |
|
(44) |
|
Proceeds from disposal of fixed assets |
12 |
|
- |
|
NET CASH USED IN INVESTING ACTIVITIES |
(755) |
|
(185) |
|
FINANCING ACTIVITIES: |
|
|
|
|
Gross proceeds from the issue of Convertible Loan Notes |
- |
|
1,200 |
|
Costs of Loan Note issue |
- |
|
(116) |
|
Gross proceeds from the issues of Ordinary shares |
2,269 |
|
- |
|
Costs of share issues |
(350) |
|
- |
|
Proceeds from finance leases |
192 |
|
|
|
Interest paid |
(136) |
|
(65) |
|
NET CASH FROM FINANCING ACTIVITIES |
1,975 |
|
1,019 |
|
Net change in cash and cash equivalents |
59 |
|
(370) |
|
CASH AND EQUIVALENTS AT BEGINNING OF YEAR |
202 |
|
572 |
|
CASH AND EQUIVALENTS AT END OF YEAR |
261 |
|
202 |
Notes
1. Basis of preparation
The preliminary announcement has been prepared in accordance with applicable accounting standards as stated in the financial statements for the year ended 31 December 2009, except for the adoption of IFRS 3 Business Combinations (Revised 2008).
The revised standard on business combinations (IFRS 3R) introduced major changes to the accounting requirements for business combinations. It retains the major features of the purchase method of accounting, now referred to as the acquisition method. The most significant changes in IFRS 3R that had an impact on the Group's acquisition in 2010 are as follows:
· Acquisition-related costs of the combination are recoded as an expense in the profit or loss. Previously these costs would have accounted for as part of the costs of the acquisition;
· Any contingent consideration is measured at fair value at the acquisition date. If the contingent consideration arrangement gives rise to a financial liability, any subsequent changes are recognised in profit or loss. Previously, contingent consideration was recognised only once its payment was probable and changes were recognised as an adjustment to goodwill; and
· The measurement of assets acquired and liabilities assumed at their acquisition-date fair values is retained. However, IFRS 3R includes certain exceptions and provides specific measurement rules.
2. Segment reporting
(i) Operating segments
The following segment information has been prepared in accordance with IFRS 8 Operating Segments, which defines requirements for the disclosure of financial information of an entity's operating segments. IFRS 8 follows the management approach, which is the basis for decision making within the Group.
The Board considers the Group on a business unit basis. Reports by Business Unit are used by the chief decision-maker in the Group. The Business Units are the four operating companies: Westminster International, RMS Integrated Solutions, Longmoor Security and CTAC. This split of business segments is based on the products and services each offer.
Westminster International provides advanced technological products, systems and solutions, RMS Integrated Solutions provides low voltage systems for high-rise buildings, Longmoor Security provides close protection training, consultancy and services and CTAC provides high end' security solutions and operates an alarm receiving centre.
|
|
|
Westminster International |
RMS Integrated Solutions |
Longmoor Security |
CTAC |
Unallocated |
Total |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
2010 |
|
|
|
|
|
|
|
|
Supply of products |
|
867 |
13 |
1 |
- |
1 |
882 |
|
Supply and installation contracts |
|
864 |
248 |
- |
762 |
- |
1,874 |
|
Maintenance and service |
|
45 |
77 |
- |
- |
- |
122 |
|
Close protection services |
|
- |
- |
397 |
- |
- |
397 |
|
Training courses |
|
- |
- |
522 |
- |
- |
522 |
|
Revenue |
|
1,776 |
338 |
920 |
762 |
1 |
3,797 |
|
|
|
|
|
|
|
|
|
|
Segment result |
|
(1,850) |
(472) |
(851) |
(647) |
(349) |
(4,169) |
|
Finance cost |
|
- |
- |
- |
(8) |
(182) |
(190) |
|
Finance income |
|
- |
- |
- |
- |
136 |
136 |
|
Income tax |
|
494 |
(61) |
(43) |
- |
(7) |
383 |
|
(Loss)/profit for the financial year |
|
(1,356) |
(533) |
(894) |
(655) |
(402) |
(3,840) |
|
|
|
|
|
|
|
|
|
|
Segment assets |
|
2,622 |
138 |
502 |
462 |
1,175 |
4,899 |
|
Segment liabilities |
|
616 |
215 |
624 |
439 |
761 |
2,655 |
|
|
|
|
|
|
|
|
|
|
Capital expenditure |
|
5 |
- |
4 |
12 |
167 |
188 |
|
Depreciation and amortisation |
|
63 |
4 |
1 |
37 |
174 |
279 |
|
Revaluation of property |
|
- |
- |
- |
- |
14 |
14 |
|
Impairment of investment |
|
- |
- |
- |
- |
763 |
763 |
|
|
|
Westminster International |
RMS Integrated Solutions |
Longmoor Security |
Unallocated |
Total |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
2009 |
|
|
|
|
|
|
|
Supply of products |
|
1,614 |
12 |
- |
9 |
1,635 |
|
Supply and installation contracts |
|
4,740 |
1,155 |
- |
- |
5,895 |
|
Maintenance and service |
|
17 |
81 |
18 |
- |
116 |
|
Close protection services |
|
- |
- |
204 |
- |
204 |
|
Training courses |
|
- |
- |
113 |
- |
113 |
|
Intragroup sales |
|
(6) |
(9) |
- |
- |
(15) |
|
Revenue |
|
6,365 |
1,239 |
335 |
9 |
7,948 |
|
|
|
|
|
|
|
|
|
Segment result |
|
324 |
(191) |
(181) |
197 |
149 |
|
Finance cost |
|
(1) |
- |
- |
(115) |
(116) |
|
Finance income |
|
1 |
- |
- |
106 |
107 |
|
Income tax benefit |
|
(85) |
26 |
47 |
(7) |
(19) |
|
Profit/(loss) for the financial year |
|
239 |
(165) |
(134) |
181 |
121 |
|
|
|
|
|
|
|
|
|
Segment assets |
|
3,820 |
555 |
629 |
1,311 |
6,315 |
|
Segment liabilities |
|
769 |
172 |
373 |
1,184 |
2,498 |
|
|
|
|
|
|
|
|
|
Capital expenditure |
|
88 |
2 |
1 |
50 |
141 |
|
Depreciation and amortisation |
|
62 |
7 |
2 |
44 |
115 |
(ii) Geographical areas
The Group's international business is conducted on a global scale, with agents present in all major continents. The following table provides an analysis of the Group's sales by geographic market,irrespective of the origin of the goods/services:
|
|
|
|
2010 |
|
2009 |
|
|
|
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
United Kingdom & Europe |
|
|
2,172 |
|
2,738 |
|
Africa |
|
|
610 |
|
4,217 |
|
Middle East |
|
|
854 |
|
858 |
|
Rest of the World |
|
|
161 |
|
135 |
|
|
|
|
3,797 |
|
7,948 |
Some of the Group's assets are located outside the United Kingdom where they are being put to operational use on specific contracts. At 31 December 2010 fixed assets with a net book value of £86k were located in Africa and the Middle East (2009: £127k).
(iii) Major customers who contributed greater than 10% of total Group revenue
In 2010 none of the Group's customers contributed more than 10% of Group revenue (in 2009 one customer contributed 31% through Westminster International).
3. Finance costs and income
|
|
|
|
2010 |
|
2009 |
|
|
|
|
£'000 |
|
£'000 |
|
Finance costs: |
|
|
|
|
|
|
Interest payable on bank borrowings |
|
|
(16) |
|
(5) |
|
Interest payable on Convertible Loan Notes |
|
|
(120) |
|
(60) |
|
Embedded derivative transaction costs |
|
|
- |
|
(29) |
|
Amortised finance cost on Convertible Loan Notes |
|
|
(54) |
|
(22) |
|
|
|
|
(190) |
|
(116) |
|
Finance income: |
|
|
|
|
|
|
Fair value movement of embedded derivative |
|
|
136 |
|
107 |
|
|
|
|
136 |
|
107 |
|
Net finance costs |
|
|
(54) |
|
(9) |
4. (Loss)/earnings per share
Earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. Only those outstanding options that have an exercise price below the average market share price in the year have been included.
The weighted average number of ordinary shares is calculated as follows:
|
|
|
2010 |
|
2009 |
|
|
|
'000 |
|
'000 |
|
Issued ordinary shares |
|
|
|
|
|
Start of period |
|
14,917 |
|
14,022 |
|
Effect of shares issued during the period |
|
3,782 |
|
760 |
|
Weighted average basic number of shares for period |
|
18,699 |
|
14,782 |
|
Dilutive effect of options |
|
- |
|
190 |
|
Weighted average diluted number of shares for period |
|
18,699 |
|
14,972 |
Basic and diluted earnings per share is calculated as follows:
|
|
|
2010 |
|
2009 |
|
|
|
|
|
|
|
(Loss)/profit for the year attributable to equity shareholders of the Company (£'000) |
|
(3,840) |
|
121 |
|
|
|
|
|
|
|
Basic earnings per share (pence) |
|
(20.54) |
|
0.82 |
|
Diluted earnings per share (pence) |
|
(20.54) |
|
0.81 |
For the year ended 31 December 2010 the issue of additional shares on exercise of outstanding share options would decrease the basic loss per share and there is therefore no dilutive effect.
5. Acquisition of CTAC Limited
On 15 April 2010 Westminster Group plc acquired 100% of the share capital of CTAC Limited, thereby obtaining control. The acquisition was made to acquire a 24 hour alarm receiving centre and an established UK based specialist security installation, maintenance and monitoring business that is synergistic to existing group businesses.
The details of the business combination are as follows:
|
Fair value of consideration transferred |
|
£000 |
|
Amount settled in shares |
|
325 |
|
Amount settled in cash |
|
500 |
|
Fair value of consideration transferred |
|
825 |
|
Recognised amounts of identifiable net assets |
Pre-acquisition carrying amount at 15 April 2010 |
Adjustments to fair value at 15 April 2010 |
Fair value at 15 April 2010 |
|
|
|
£'000 |
£'000 |
£'000 |
|
|
Plant, property & equipment |
127 |
- |
127 |
|
|
Intangible assets |
- |
269 |
269 |
|
|
Total non-current assets |
127 |
269 |
396 |
|
|
Inventories |
43 |
- |
43 |
|
|
Trade and other receivables |
614 |
- |
614 |
|
|
Total current assets |
657 |
- |
657 |
|
|
Bank liabilities |
(41) |
- |
(41) |
|
|
Finance leases |
(69) |
- |
(69) |
|
|
Trade and other payables |
(881) |
- |
(881) |
|
|
Total current liabilities |
(991) |
- |
(991) |
|
|
|
|
|
|
|
|
Identifiable net assets/(liabilities) |
(207) |
269 |
62 |
|
|
Goodwill on acquisition |
|
|
763 |
|
|
|
|
|
|
|
|
Consideration transferred settled in cash |
|
|
500 |
|
|
Bank liabilities acquired |
|
|
41 |
|
|
Net cash outflow on acquisition |
|
|
541 |
|
|
Acquisition costs charged to expenses |
|
|
38 |
|
|
Net cash paid relating to the acquisition |
|
|
579 |
|
Consideration transferred
The acquisition of CTAC was settled for an initial consideration of £825,000, which was satisfied by the issue of 792,683 Ordinary shares at 41p and £500,000 cash on the date of completion. The Directors considered that this constituted a fair value for the business acquired, and no external valuation was considered necessary.
In each of the two years following completion, a calculation of net profit before tax will be made and, on the basis of that calculation, two performance based payments will be made of 40% of those profits, if earned, up to a maximum aggregate additional payment of £1 million. Based upon the budgeted profitability of CTAC, the fair value of the deferred contingent consideration has been assessed as nil in respect of 2010 or 2011.
Acquisition-related costs amounting to £38,000 are not included as part of the consideration transferred and have been recognised as an expense in the consolidated income statement, as part of 'administrative expenses'.
Goodwill
The goodwill of £763,000 was attributed at the time of acquisition to the synergies that are expected to arise in the post acquisition period, the reputation established by the business in its market and the substantial skill and expertise of the company's staff. Goodwill has been allocated to the cash-generating unit at 31 December 2010, but has now been fully impaired. The goodwill is not expected to be deductible for tax purposes.
CTAC's contribution to the Group results
|
|
Results included in the consolidated statements |
Results for the full year |
Group results for the full year |
|
|
£'000 |
£'000 |
£'000 |
|
Revenues |
762 |
967 |
3,797 |
|
Loss after tax |
(655) |
(794) |
(3,822) |
Contingent asset
A claim under the Sale and Purchase Agreement is being made against the vendors of CTAC, as the result of a deficiency in net assets as at the Completion Date. The amount being claimed amounts to £740,000.
6. Publication of non-statutory accounts
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in the Companies Act 2006.
The consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, consolidated statement of cash flows and associated notes have been extracted from the group's 2010 statutory financial statements upon which the auditor's opinion is unqualified and which do not include any statement under section 498 of the Companies Act 2006.
Those financial statements will be delivered to the registrar of companies following this announcement.
This announcement and the annual report and accounts will be available on the Company's website www.wg-plc.com. A copy of the report and accounts will be sent to shareholders with details of the annual general meeting in due course.