Westminster Group

Justin Reynolds

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There has been huge investor interest in companies seeking Covid-19 vaccines since the outbreak, with share prices of small caps such as Novacyt, Genedrive, and Byotrol surging.

Perhaps less attention has been paid to those well placed to supply the infrastructure for a world that, until such treatment is found, will have to learn to live with the virus for some time to come.

The Westminster Group (WSG) is one worth looking at. The Banbury-based Group, which listed on AIM in 2007, offers managed security services and surveillance, detection, tracking, and interception technologies. The Group has begun to attract attention after reporting a dramatic surge in demand for the virus-screening equipment it has been supplying to airports since the Ebola and bird flu outbreaks in 2014.

Last month Westminster reported a 22pc jump in Q1 revenues as demand for its screening systems soared. Orders have been placed by a global investment management corporation seeking scanning devices for its ‘Return to Work’ programme, a group of US casinos, several NFL Super Bowl-winning teams, and private and public sector organisations in Iraq, Hong Kong, Israel, and Vietnam.

A silver bullet?

Virus-screening technology holds out the tantalising promise of a solution to the conundrum of how to detect Covid-19 symptoms among streams of people entering hospital entrances, shopping centres, office buildings, sporting events and other high-traffic areas. Thermometers are accurate but simply impractical: their use requires medical training, they must be cleaned before re-use, and they would bring traffic to a standstill. 

Virus-scanners, which can be used as hand-held devices or integrated into portals, are infrared thermal cameras that measure temperatures by imaging faces. They can be operated from a distance, require minimal training and can produce instant measurements. They are most often used in airports but since the Covid-19 outbreak, their wider potential has been quickly recognised, with Amazon, Whole Foods, Apple and other corporations beginning to employ them.

Maybe not…

It all sounds too good to be true – and many studies suggest it may be.

There are doubts about the technology’s reliability. To accurately measure facial temperature cameras must zoom in on the inner corners of the eyes, a small target when crowds of people are passing quickly. Room temperature, skin moisture, contact lenses and glasses can impair readings. And cameras cannot detect carriers during incubation periods when no symptoms are displayed. Studies by academics and ECRI, a nonprofit that studies evidence-based medicine, suggest screens had at best partial success at identifying infected people when used during the SARS, Ebola, and swine flu outbreaks. And any technology that allows organisations to keep databases of facial images raises clear data privacy concerns.

But imperfect as they are, the scanners offer a practical virus detection system for day-to-day post-lockdown life. ISO guidelines have been published outlining how they can be used as effectively as possible, and, whatever their technical effectiveness, screening devices have an undeniable psychological power, able to intimidate those who might otherwise be tempted to break guidelines.

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Building on past momentum

As Westminster’s Q1 results indicate, governments and companies across the world are prepared to give the scanners a try. And those figures build on solid results the Group has enjoyed for a few years now.

Westminster’s year-end results reported that 2019 was a record year for the Group, with a 63pc (£4.2m) year-on-year increase in revenues to £10.9m, up from £6.7m in 2018. The Group’s Managed Services Division achieved a 50pc increase in revenues to £5.5m, up from £3.7m, and its Technology Division – which supplies the screening devices – achieved a 80pc increase in revenues to £5.4m, up from £3m. Recurring revenue rose by 46% to £5.6m. Overall, the results delivered an improved financial position with an EBITDA profit from underlying continuing and discontinued operations of £0.1m, as compared with a 2018 loss of £0.4m. Westminster’s revenue has grown by more than 10% for the previous four years.

Time will tell whether the surge in demand for screening technology will overcome the adverse effects of Covid-19 on other elements of Westminster’s business. The Group has acknowledged the economic downturn will impact demand for its managed security services, particularly those provided to airports. Westminster notes that it has retained its long term airport contracts in West Africa, and argued that reduction in airport traffic here will be less severe than elsewhere as it is mainly business rather than tourist-driven.

After falling on the outset of the lockdown Westminster’s share price has risen from a low of 5.25p in March to just under 9.75p, bringing the Group’s value to £15.4m. It would seem that Westminster’s proven experience in providing screening systems makes it well placed to benefit from a sharp rise in demand for these and other pandemic technologies.

Westminster Group CEO hails multiple revenue stream model as fever screen demand rockets
The author was remunerated but does not hold shares in the company


Categories: Bulletin