I'm still heavily invested in WSG and that will remain as I think that a transformational deal is just about to finalise.
Velocys though has flagged up under my radar this morning on a deeply reduced share price and is perhaps one for value investors and the patient.
The company through state of the art technology turns waste gas products from landfill sites into jet fuel, diesel and premium wax. There has been a deeply discounted financing announced this morning to part finance another such plant that has reduced the share price to what I think is a price significantly under what it should be as an adjusted price after any such financing. Dyor and in the end its your decision.
Just wanted to say thanks, you recommended this share on another BB about 18 months ago and I watched it climb and climb from 9p and eventually I jumped in at 28p but managed to average down over time to 12p.. I took my stake back yesterday and have a free carry of 70K shares. So seeing as Im unlikely to meet you I just wanted to say thanks as Im looking at a good profit here. Cheers Neil
Maybe read back on numerous posts I have put together for a rough summary of the last 18 months company statements and the different divisions and yes I have backed my own research well. Timely top up into the bargain at mid-21p.
Not here to answer any Q?s as very few tick ups for the effort and you get the odd curved ball that appears.
With the imminent announcement of a huge contract before end january,(see latest RNS) RNS, Westminster could easily double or more before end of month, maybe it will come next week.
Have a look, maybe it could be the easiest money you could make this year in the shortest time.
In the September 17 half-yearly report I can remember the reaction to this paragraph off Peter Fowler.
"Given the confidential nature of these projects and the time it can take for MoU's and Letters of Intent (LoI) to progress to award of contract, we are no longer announcing any individual MoU or LoI when signed. We will update the market on material developments as appropriate."
Then out of the blue pre-Christmas this
"Whilst these negotiations have taken longer than expected, the Company is pleased to report that senior management, including the Chairman and CEO, have just returned from an extended visit to the country concerned and all but a few more minor commercial and contractual issues have now been agreed. Due to the complexity and increasing potential scope of this project, it has now been agreed to undertake the project in phases, with the initial phase expected to be worth approximately 24m per annum to Westminster. Any future extensions and changes of scope are expected to be subject to price revision.
In order to achieve the commercial and contractual agreement, the contract required approval by a number of governmental departments and organisations, all of which have now been received. The client now has one final internal approval process to complete and whilst with any project of this size and complexity there can never be certainty of timing or outcome, the Company expects to provide a further update on this project opportunity in January 2018."
I'd class that as a fairly major "material development" myself and imho on a completely different level to previous "tickles" as you call them.
yes lots of MOU's - but they're only MOU's -- what we need and never seem to get are
hard contracts. As I posted a while ago the management give us a tickle , the sp shoots
up but then flops back when nothing happens and thats been the pattern for
quite some time!
OWT. I agree with your sentiments but feel there is a major issue of trust given the number of false dawns. I an now c 30% up but missed out on selling at recent 27p as i had intended as I expected to buy back at current levels based on previous trends. Will wait now for contract announcement and probably sell half at 32p for free carry of rest.
Here is the quickest of summaries of MOU's and the LOI which I believe are all still live.
# 1 x East African MOU signed some time ago.
# 3 MOU's signed in 2015 - 1 x East Africa
# 3 MOU's signed in 2016 - 1 x Middle East Letter of Intent.
# Mention also of a large scale Anciliary project with the same client and a Significant Border project in the same region.
# 3 MOU's signed in 2017 - 2 x Africa and 1 x Asia.
As it stands presently and after a pre-Christmas RNS the company seem to finally be at the very last stage of sealing the deal on a 24 Million Euro per annum deal that should completely transform the company - and that being against an attributed value at tonight's market capitalisation of £26.25 Million. That is far too cheap.
All this should require is the 1 deal sealed.
Over to you Board of Directors for the expected January update on this ME deal.
Another interesting article has just recently appeared this time on Lungi Airport and with the WSG Chief Financial Officer Martin Boden in the spotlight of the interview.
If anyone can claiming success at Lungi Airport then he will know. Passenger numbers were recovering post Ebola, cargo screening has started and more airlines have started flying to and from Freetown. Turkish airlines also set to start in February I believe.
Security was definitely firmly on the agenda of the Turkey leg of Chris Graylings recent 2 day visit to Qatar and Turkey and looking to build on the Strategic Security Partnership established almost 12 months ago by the PM according to the clip of the meeting below.
There are constant references to the D and the T words and the sharing of expertise on the civil aviation sector.
A nice exchange of gifts also at the end.
Was that watch set for 7:00a.m.
Best times on the clip are 3:57, 6:30, 7:41 and towards the end.
Also the first leg of the Journey was a visit to Qatar where any discussions appear to have been a bit more candid.
Maybe in defending himself against train fare rises he gave a little too much information away. Nothing wrong with friends in high places and my previous posts have made reference to HMG support and high level introductions.
The 2 day trip mentioned in this radio interview is to Qatar and Turkey and it mentions an expanding airport and helping win business for British companies.
Yes, I added to my holding the day the news came out and top sliced for a nice profit two days later. Wouldn't want to be out now, and will top up if it falls any further. Thanks for the drawing my attention to this one (through another board!).
Extremely good value being presented again at the moment for where this company is at right now. I think its turned a corner since its disembarked from the ferry Operation and it looks like delivery of Big one is coming also.
Just trying to put 2 and 2 together and making 5 and as no-one seems to mention the middle east country by name, could there be any connection with Chris Graylings present 2 day visit to Qatar for business talks? The timing seems perfect!
I came close to buying more in the 15 to 20p range but the very unpredictable extent and terms of financing made me think that best I hold off til the company announces the contract and the financing plans.. but the s/p has raced on so much recently that I now feel I would have been very safe in butying in 15-20p range.. oh well.. my original position here is a decent size and low average price already so best just be very thankful for that
All but a few more minor commercial and contractual issues have now been agreed by a number of governmental departments and organisations, Beaufort noted.
The company is now waiting on its client for one final internal approval to undertake this project in phases, with the initial phase expected to be worth roughly 24mln a year to Westminster.
The company has made huge progress with respect to its Middle East opportunity. We look forward to the further update this month, Beaufort said.
Westminster had indicated it expects to provide a further update on the projects progress later this month.
Financially, the company said it has plans in place to raise the required funds in Q1 2018 to support investment in this project and other potential new Managed Services contracts. Given positive progress, Beaufort reiterates its Speculative Buy rating on the share, the broker concluded.
Shares in Westminster were up 13% at 27.17p in late morning trading, and are almost triple the value they were before the announcement on 22 December.
This subject heading should be changed to the State of Play - Managed Services Division which is vertically integrated and it links in nicely with the Groups Technology Division.
If you have read the previous posts you will recall that I mentioned the setting up of 2 German companies.
One, Westminster Sicherheit GmbH has a German website which you can translate to English. Its then worth clicking on the "Learn more" and the "Projects" links to give you a good flavour of the extent of the companies activities.
That's should be you about up to date on WSG and its business activities.
This was one of the biggest drains on WSG finances regarding set up costs and business start up losses. The competition beat them to the market with smaller more versatile craft and despite the Companies own attempt with smaller vessels.
That was until an update in Sept 2017
22nd September 2017 RNS: Half Year Report
"....However passenger growth and financial performance are not meeting the boards expectations, due in part to growing competition. Revenues amounted to £51k (H1 2016:nil) and the EBIDTA loss amounted to £0.4M (H1 016: Nil). With future passenger growth forecasts being downgraded, losses would be greater in Quantum and duration than previously forecast. The Board have therefore taken the decision to exit the ferry service in a manner which will not adversely affect airport passenger transfer to and from the mainland, which was one of the initial drivers for the ferry service.
We have entered into a formal agreement with Sea Coach Express, the largest ferry operator in Sierra Leone, commencing on Monday 25th September. Under this agreement, Sea Coach will take over the Sovereign (SL) Operations and responsibility for management and operation of the ferry service and vessels, including the Sierra Princess, and will expand the Sovereign fleet by several more vessels....
... we have cancelled the lease on our second vehicle the Sierra Duchess. We will receive a share of revenues on ticket sales made through our own operations , together with a payment for all passengers travelling to and from our terminals.
We will continue to operate and manage the terminals in accordance with our 21 year agreement.
We still own the Sierra Queen and will be reviewing and given our exit from th eferry operations will be reviewing our options for the Sierra Queen at the earliest opportunity....
We have commissioned an inspection of the Sierra Queen and options will be considered to monetise the vessel..."
This should take a scythe to the reported £0.4M of losses.
As promised earlier - a Technology Division update.
The Technology Division generates its income from many free-standing contracts with government and non-governmental organisations as you will see but without any shadow of doubt it will be linked via vertically to any large scale Managed Services Contract that WSG secures such as the ME Airport deal, that plus focussing on recurring revenues.
In a similar vein to the other respective Divisions already highlighted here is a summary of about 15 months worth of RNSs on the Technology Division.
29th September 2016 RNS:
As outlined in the AGM Statement in June, and despite project delays previously identified and which continue, The Technology Division has made a positive contribution during the first half of 2016 with higher margins and a lower cost base
The Company has secured orders and delivered a wide range of products and services around the world and has also made good progress with the potential 20 year Middle East border security project announced in February 2016 for the provision of equipment, training and ongoing maintenance of security screening checkpoints. The company successfully carried out trials and demonstrations in relation to this project in May 2016 and due to the substantial potential value of this contract and its own specific complexities, is now discussing funding and deployment options with the authorities and banks with UKEF support
The worldwide reach of the Division is emphasised by a number of recent contracts. By way of example, during the first 6 months of 2016, the Technology Division has supplied various products and services to UK prisons, security equipment to various airports in the UK and overseas, explosive detection equipment to a UN entity in Somalia, supplied screening equipment to the South African Police, as well as securing contracts with numerous other clients as far afield as Afghanistan, Canada, China, Germany, Greece, Indonesia, Kenya, Malaysia, Nigeria, Qatar, Romania, Singapore, Tanzania, Turkey, the UAE and the USA.
The Division has a number of other advanced solution sales prospects underway (usual caveats)
2016 has seen a complete overhaul and upgrade of all our Group websites and as part of that process a new and comprehensive Westminster International website has been developed. This was launched in June following a nine month build programme and is optimised for mobile usage, improved SEO functionality has led to improved traffic and enquiries since commissioning.
The business continues to provide essential technical resources to the Managed Services Division, again highlighting the vertical integration that exists in our business.
21st December 2016 RNS: Trading Statement
Over the last few months the Company has won a number of UK based maintenance contracts for x-ray screening equipment provided by a major supplier to Westminster. The additional recurring sales value is over £100,000; this is expected to increase as further contracts are secured. Customers include UK airport service providers and government bodies and enquiry levels are increasing. These maintenance contracts bolster Westminsters growing recurring revenue base and are being delivered by the Companys existing team of trained and qualified engineers.
In addition, Westminster has recently secured a number of security and training contracts in airports around the world and Westminsters growing reputation as a subject matter expert in airport security will aid awareness of its managed services airport security operations with potential customers
23rd February 17 RNS: Trading Update
The Groups Technology Division has made a strong start to the year and continues to make a positive contribution to the Group with increasing margins. In the trading update in December 2016 the company announced it had secured over £100,000 of annual recurring revenue maintenance contracts and further recurring
I hope you got in on this one. I expect there is a lot more to come from this on just the one ME contract alone, never mind all of the others they have in the pipeline.
QFI, in spite of todays wobble will respond well in the NY and surge past it's past 14p levels. Looking for over a 100p here.
Caspian, although for now has not attained a new trading level, is on the verge of delivering across at least two of it's deep wells, likely a third too and spudding another shortly. Also expect this to have a steep rise in 2018 to well over 30p.
Can't afford to wait any longer for 70 on PXOG so have exited with a small profit. Turkeys are too big elsewhere.
Apologies to all for the 'off topic' pieces on here.
More insight to come on this Division but here is a little taster for you on a Border Project that was specifically mentioned under the Technology Division update in the 29th September RNS. Note this is Border contract as distinct from the present ME airport contract that is presently enthusing.
"The company has secured orders and delivered a wide range of products and services around the world and has also mad good progress with the potential 20 year Middle east Border Security project announced in February 2016 for the provision of equipment, training and ongoing maintenance of security screening checkpoints. The company successfully carried out trials and demonstrations in relation top this project in May 2016 and due to the substantial potential value of this project and its own specific complexities, is now discussing funding and deployment options with the authorities and banks with UKEF support."
Not much has been heard since - although we know from previous updates that all MOU's are seemingly active.
We also know how long it has taken for the present ME Airport deal to get to where it is.
Note also here the mention of funding using banks with UKEF (United Kingdom Export Finance Support.
Its clear that you are either not clear about the USP's of what this company has to offer or are trying to trade it and probably not too successfully against what is a rising trend. I am merely stating it how it is reported in the updates. All companies require investment to build a sustainable business. G4S and the other big players will have done similar.
I think many will know that the biggest blight on this companies net profit has been an excursion into Ferry operations that required successive investment costs and did not perform as expected. It shouldn't any longer be a drain on finances though as its been farmed out to another operator as of Sept 17. The larger of the ferries the Sierra Queen is presently up for sale so should recoup some outlay monies back.
The main USP's are contained in this post from Wednesday.
It is Net Profit, or Net Earnings that rewards the Investors.
I know very little about the USP of this company but;
High Gross margin businesses usually have high fixed costs or need substantial investment in assets.
I'm sure winning this contract is very good news for shareholders, but they are not about to be richly rewarded with a rapid payback without absorbing the diluting effect of the need for further investment.
For a company looking like its just about to land the real deal of a transformational contract amounting to 24M per annum and with incremental businesses a scan of the last 15 months RNS's for their Margin threw up some good reading.
From the June 16th RNS (Interim Results for 6 months to 30/06/16
"Average gross margin improved to 74% (2015: 51%) due to favourable business mix;"
22nd Sept 17 RNS: Interim Results for the 6 months to 30th June 2017
"The Group generated a gross profit of £1.7m (H1 2016: £1.5m) which equates to a gross margin of 59% (H1 2016: 73%). This gross margin decrease is largely due to a negative gross profit from the Ferry operations... (Ferry business now Sea Coach Express thankfully)
As stated I shall have a look at the mentions of the Technology Division in the RNS's when I can make some time.
In the meantime a short trawl through the Westminster Group news pages will give you a flavour of what this entails from X-Ray scanners to security fencing and Vehicle checkpoint screening equipment etc. Its not been updated so regularly but it lets you see.
Whilst I sat and summarised the last 15 months worth of RNSs on the Memorandums of Understanding and on the Middle East contract I also made mention of Lungi Airport in Sierra Leone which services the capital Freetown and beyond and whereby Westminster Group undertakes Airport Security and operates Cargo Operations.
Just ahead of any Operational Update in January (which we know is coming) here is a chronology of paraphrased RNS information and Internet links on the Airport operations which I hope proves helpful in gaining an understanding of what business Westminster Group is engaged in.
This airport was hit badly by an Ebola epidemic prior to Sept 16 but has been recovering and with an increasing number of Airlines flying or set to fly into Lungi airport in Sierra Leone.
29th September 16 RNS.
Cargo screening commenced in West Africa
I am pleased to report that despite the challenges of the last 2 years, our business is facing unprecedented growth prospects, particularly with our airport security operations. Airport traffic in West Africa is returning following the end of the Ebola crisis and whilst not yet back to pre-Ebola levels, is showing encouraging signs with the addition of cargo screening operations having commenced
23rd February 17 RNS
The Groups Managed Services Division continues to make progress on a number of fronts. The Companies West African airport operations are seeing steady growth in embarking passenger numbers as the recovery from the Ebola Crisis continues. In January 2017 (a seasonally strong month), the airport recorded its second highetsnumber of embarking passengers since the company commenced operations there in 2012, showing a 40% increase on January 2016 and following on from a 35% increase year on year in December 2016 m(albeit December 2015 and January 2016 were still affected by the tail end of Ebola .
22nd September 17 RNS
Strong recovery in West Africa passenger numbers continues, several new airlines commencing services including Turkish Airlines due to commence in Q4 2017.
Our airport security business in West Africa is performing well
Our airport security operations in West Africa performed well in the first half of the year as passenger numbers continue to rise and several new airlines commence services in Q4 2017. This service is likely to bring in passengers from new regions and bodes well for future growth.
Revenues from our airport security operations increased by 41% to £1.8m (H1 2016: £1.3M) with embarking passenger numbers growing by 18%..
Passenger numbers continue to grow across all airlines with the exception of Air France who have reduced Flight numbers with their passengers being picked up by their code-share airline, KLM. Fly Mid Africa launched a new service in July 2017. Air Peace will be commencing flights to Nigeria from September 2017 and Turkish Airlines are planning a new route from Istanbul to Sierra leone later this year, following a successful trial at the end of August. Early September airlifting Hajj pilgrims to the Kingdom of Saui Arabia (February 2018 see link below)
I am cashing out a chunk of my investment in this share. A profit is not a profit until it hits your bank. Nothing has materially changed - we are still in the final stages of negotiations but each time the news gets announced, it goes back up then drifts down. I will dip in and out again over the next few months skimming off the top - hopefully.
We hit 20's through the autumn then it popped back down to 9 on the 23rd (approximates). All contracts in the middle east are always at the whim of the benevolent (ahem) ruler so it is not a done deal and in my experience, just at the point of signing is when the negotiated price is suddenly renegotiated.....
In short - I think this is a long term winner but always take a bit of profit when it is offered. I am more cautious on my one pound/two pound estimates..... I would use the pound sign but I bought this computer in the middle east and I cannot figure out where it is.
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