Business Overview
Westminster Group PLC (WSG) is a Banbury, the United Kingdom-based security and services company. The Company's main activity is the supply, design, and ongoing support of technology security solutions and the provision of long-term managed services, training services and consultancy. The group's operations are differentiated in three operating segments: Managed Services Aviation, Technology, and Managed Services Guarding. The group's subsidiaries contain Longmoor Security Limited and Westminster International Limited.

Recent News
On 5^th July 2019, the company declared that they had come in into an agreement (strategic alliance agreement) with the GAA (Gulf Aviation Academy) of Bahrain for the establishment of aviation and other specialised training services.
On 21^st June 2019, the company announced that they had entered into a JV (joint venture) agreement with a substantial partner in the Kingdom of Saudi Arabia ('KSA' or the "Kingdom"), Hazar International ('Hazar').

Financial Highlights (FY2018, £,000)

(Source: Annual Report, Company Website)

The company’s reported revenue surged by 24 per cent to £6.7 million against the financial year 2017 data of £5.4 million. EBITDA loss from underlying operations stood at £0.38 million, a decrease from the financial year 2017 loss of £1.23 million. Total loss before taxation decreased to £1.4 million against the loss of £5.7 million in FY17. Total loss per share stood at 0.40 pence, a decrease as compared with the financial year 2017 loss per share of 5.24 pence.  

Total finance costs of £0.3 million were consistent with the previous year as interest-bearing debt levels- Senior Secured Convertible Notes (10% - 12% coupon) generated an underlying cash charge of £0.4 million.

Share Price Performance
 
Daily Chart as at July-08-19, before the market closed (Source: Thomson Reuters)

On 8th July 2019, at the time of writing (before the market close, GMT 3:27 AM), WSG shares were trading at GBX 16.58 and decreased by 1.75% against the previous day closing price. Stock's 52 weeks High and Low is GBX 19/GBX 5.66. The company’s stock beta stood at 3.35, reflecting higher volatility of the stock as compared to the benchmark index.

Key Risks
Current global economic, political and financial market conditions may materially and adversely affect the company’s operational performance. A downturn may affect customers, suppliers and other parties. The company operates in emerging and frontier markets and therefore is exposed to the political, geographic and economic risks. With the UK committed to leaving the European Union, the company will continue to see uncertainty in the UK. The Board considers that the current level of market risk is higher than normal, given the level of geopolitical unrest. The main financial risks faced by the company are credit risk, foreign currency risk, interest rate risk and liquidity risk. The company’s systems and data are subject to security and availability risks, particularly in some of the territories. Any disruption to the company’s information systems could have a significant impact on the business.

Conclusion
The company is in the development phase. The company rely on its cash balances and fund raised from the stock market for all the operational tasks. The company operates in a challenging environment which requires continuous investment, sometimes at the cost of profitability, to stay ahead of competitors. Moreover, the company’s profitability ratios are significantly lower than its peers, with most of the ratios in the negative territory, as against positive margins reported by the industry. Based on the risks faced by the company, along with the negative profitability, we have given an “AVOID" recommendation at the closing price of GBX 16.875 (as on 5^th July 2019).

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