I have been looking at defence and Security stocks as I feel they may fair better than most in this market, particularly those with overseas earnings in USD or Euro.
I have noticed this company (WSG) seems to have a good news flow, a tight spread for an AIM stock with growth prospects and I quite liked the recent pre close statement ...
Westminster Group Plc ('Westminster' or the 'Group'), the AIM listed supplier of system solutions and products to the security, defence, fire protection and safety markets worldwide, will announce preliminary results for the year ended 31st December 2008 on Friday 24th April 2009.
Historically, the business has shown a seasonal revenue pattern, with a bias towards the second half of the year, which was repeated in 2008. The order book at the year end stood at £4.2million, compared with £1.5m at 31st December 2007.
Taking the year as a whole, the Board is satisfied with the Group's trading performance in 2008 which is in line with market expectations. Westminster has no borrowings and at 31st December 2008 had net cash of £570,000.
I like the no debt and cash in bank position and an increasing order book sounds interesting.
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I also see they have announced an acquisition in the sector - a paper transaction so again preserving cash.
Small but the management look right and they seem to have plenty of potential to grow!
See the web site at www.wg-plc.com
I feel this could well be one to watch .... any one have thoughts on this?
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Westminster Group Plc is a United Kingdom-based company. The Company’s principal activity is the design, supply and ongoing support of advanced technology fire, safety, security and defense solutions to government and government agencies, non-government organizations and blue chip commercial organizations worldwide. The Company operates in five divisions: Westminster International Ltd, Longmoor Security Ltd, RMS Integrated Solutions Ltd, CTAC Ltd and International Monitoring Services Ltd. The Company operated through a network of agents located in 46 countries at 31 December 2011. Its subsidiaries include Westminster International Limited, RMS Integrated Solutions Limited, Longmoor Security Limited, CTAC Limited and Westminster Aviation Security Services Limited. In March 2013, the Company disposed two subsidiaries MS Integrated Systems Limited including CTAC (RMS) and International Monitoring Services Limited (IMS). more »
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A good piece by Edison on Westminster.
http://www.wg-plc.com/investors/publications/Westminster_Outlook_260109.pdf
Yes they have quoted for £300m of work, but how much will be converted to sales? Edison say 5%, which could lead to £15m revenues... but it's still speculative.
Westminster still need to show that they can run a tight ship and turn profitable... all our eyes should be on the H2 figures and how the trends are developing... the board is relatively experienced with ex FTSE 100 directors etc... can they execute?
I don't like stocks that aren't already profitable - the markets are completely unforgiving, and earnings is one of the only crutches available in a credit downturn.... My hunch is that if they do turn profitable, there will be plenty opportunity to buy with less risk at a later date. Other defence plays may prove more defensive in this environment...
The most recent thing I saw on this was the £2.3m acquisition of LongMoor - anyone heard anything since then?
http://www.stockopedia.co.uk/news/announcement/WSG/090226wsg8943n.htm
When are the results out?
According to the company's pre close statement the preliminary results will be announced on 24th April - it will be interesting to see how they are doing as they certainly have had a reasonable news flow over the past year and the board look very competent! I like the no debt and cash in the bank comments mentioned in the pre close.
The recent acquisition is a maximum payout of £2.3m but initially only £389k and that was in shares, the remainder is performance based on net profit so looks like a clever deal - no cash outlay, new division with interesting client base and further payments only if they make a profit. The size of the deferred payout would suggest they are optimistic of high growth from Longmoor
I see a nice £1million order announced this week adding to a healthy order book - this company certainly seems to be able to secure some interesting business!
I read a good book a few months back called War Plc, which detailed how private military companies ("PMC") were being hired both by oil companies in dangerous parts of the globe, as well as by govts to provide security to army bases, in Iraq, Afghanistan, etc, and also to provide security to convoys in war zones, take soldiers to and from airports etc... The numbers quoted (I don't have this to hand) show how this has grown exponentially in recent years (certainly since the first Iraq war). For example the US Dept of Defence is rumoured to have over 100,000 contractors in Iraq undertaking PMC duties - helped in no small part by the immunity from prosecution offered to all Americans involved with the coalition.
My first thought reading the book was to see if there was an investment angle on it, but of course a lot of these PMCs are private companies, which provides them with the lack of transparency they need for contracts and how they are performed. Another reason companies are private is to remain as far out of the spotlight as possible following various incidents of unprovoked attacks on civilians. One of the most well-known names in the PMS arena is Blackwater. In terms of UK companies, you may have heard of Executive Outcomes (& Tony Buckingham, director of HOIL), Sandline Intl (& Tim Spicer, Simon Mann).
Anyway, getting back to the point of the post, the author of the book commented that the industry was looking for ways to diversify away from protecting mines and oil rigs in far-flung places, or providing security to armies in the Middle East. The next large area of growth will come from providing security at large-scale events in the UK, in place of the Met Police - such as sporting events, Olympics 2012, Trafalgar Square on NYE, etc... It is not thought that PMCs will replace the police altogether, but will provide the main numbers for standing by barricades in fluorescent jackets, directing crowds etc... allowing police to better manage their manpower & budgets.
To this end, it is worth watching companies in the security sphere that have some exposure to events-type protection. WSG are one such firm, and Group 4 (GFS) probably the largest. A small firm I found within theBusiness Services sector is Sectorguard (SGD) but they really are few and far between. Does anyone know of other such listed firms, or a way to play this opportunity? G4S seems the leader in the market but I cannot think of other large-cap companies in this area.
Good news today that it has secured a prestigious €2m contract to protect the new Nagaa Hammadi Dam complex on the river Nile in Egypt. The contract is to supply and install an advanced security net across the river Nile; to prevent access to the dam from either vessels or divers and to protect the hydraulic control structurefrom any floating or submerged objects.
http://www.stockopedia.co.uk/news/announcement/WSG/090420wsg000327.htm
Good quality contract win which follows the previous £1million contract award recently announced for Iraq both of which clearly suggests they have the ability to secure interesting and sizeable business with national governments etc.
Results out later this week - will be interesting reading!
Impressive results announced yesterday with doubling of revenues and delivering profits.
http://www.stockopedia.co.uk/news/announcement/WSG/090424wsg000741.htm
Highlights:
These are impressive results on the back of recent quality contract announcements.
This reinforces my view that this company is worth watching - I like the look of the management and they appear to have a good business model in a sector I believe will weather the economic climate better than many.
Just bringing the thread up to date with the Interims that were released in September:
Highlights
Since the half year-end date, WSG have issued no less than nine RNS' concerning contract wins or distributorships. Whilst it's good to have good news flow, I'm not a fan of companies that RNS everything down to the date of the Christmas party! Saying that, for a company of this size (£5m market cap) these deals may be considered material.
One contract of note, announced last Friday, is a $2.7m extension to the 2008 contract worth $4.7m that WSG was awarded to secure Juba International Airport (in Sudan). The RNS also states the winning of more than $1m more in contracts in October.
SM