Westminster soars on airport deal

Shares in Westminster Group (WSG) gained almost 50% in morning trading on Monday after the company announced that its aviation division has secured a major 15 year contract to provide security at an international airport in Africa.

The AIM listed supplier of system solutions and products said the contract, which has a potential revenue value in excess of $150million over its term of the contract, is to provide comprehensive ground security operations at the main international airport of a West African nation.

Following a two month pre-deployment transition period, operations will commence in May. The contract will be funded by a per-passenger fee denominated in US dollars, payable directly to Westminster by airlines using the airport and is expected to generate revenues of $4.5 million in the first year.

Westminster expects that, based on current passenger volumes and growth rates being sustained across the life of the contract, revenues could be in excess $150 million. The airport, which is seeing a marked increase in traffic due to the growing economic prosperity of the country in question, is currently utilised by a number of major European Airlines.

Additional North American and Middle Eastern Airlines are expected to commence services in the foreseeable future, further increasing passenger numbers and, in turn, revenues to Westminster.

The company said it expects to use existing working capital resources during the early stages of this project but added that discussions previously referred to regarding potential strategic investors are ongoing and will provide further updates as, when, and if required.

“Westminster has valuable reference sites for security solutions in airports worldwide and our aviation business is currently experiencing record interest, including enquiries from several other similar international airports,” commented Westminster’s chief executive Peter Fowler.

He added:"The award is a testament to our strategy of focussing on growing markets in the Middle East, Asia and Africa where Westminster is building a significant presence and potential. An indication of that potential can be seen from a recent report from the IMF which states that, in the next five years, seven of the world's ten fastest growing economies will be in sub-Saharan Africa, including many of the countries we are active in."

Interested in Westminster Group? The Interactive Investor discussion board for the company is reacting to today's news....