Westminster Group’s newly acquired CTAC business wins significant contracts worth over £1m

The Westminster Group’s (AIM: WSG) recently acquired high-end security business CTAC Ltd has won two significant new contracts worth a combined £1.02 million, just weeks after joining the specialist security group. The two prestigious new contracts see CTAC provide high-security services to bullion storage depots located in the UK.

Less than two weeks ago, Westminster reported the CTAC acquisition, with the expansive security company agreeing a deal worth up to £1.82 million, depending on CTAC’s future performance.

“At the time of our acquisition I stated that I believed the company (CTAC) was at an exciting stage with tremendous growth prospects and was an excellent fit for our business. It is indeed pleasing to be able to issue significant contract news so soon after that statement”, Westminster chief executive Peter Fowler commented.

The Kidderminster-based CTAC provides ‘high end’ security systems and services to a blue chip client base including Brinks, DeBeers LV and Seven Trent Water who operate in operationally critical, high value and high profile fields such as cash handling, bullion storage, jewellery and diamond merchants, chemical storage and utilities.

“I am delighted that our newly acquired subsidiary CTAC has secured these prestigious new contracts, which underpins their reputation in the high security market place and immediately justifies our decision to acquire the business as part of our growth strategy”, Fowler added.

Under the terms of the contracts, CTAC will provide a variety of high-end security equipment to the high security bullion storage sites, including: Intruder Alarms, CCTV, Access Control, Vehicle Blockers, Turnstiles, Fencing, Electronic Fence Detection, Vehicle Strainer Wire and External Electronic Beams.

Westminster expects the contracts to commence shortly and noted that they will both be completed during 2010.

CTAC was founded in 2004 and it has grown ever since. Earlier this month, Westminster highlighted that the newly acquired business has been receiving growing interest internationally, where it has significant market potential.

A key strength of the CTAC business is its 24 hour Alarm Receiving Centre (ARC) which is built, operated and certificated to the National Security Inspectorate (NSI) Gold standard - the highest level of certification in the UK.

The ARC operates as a 24/7 control & command centre and monitors alarm and video signals from over 1,000 systems across the UK, producing a strong recurring revenue stream. According to Westminster, CTAC’s 24 hour Control & Command facility and Alarm Receiving Centre is a major enhancement to the group’s service operations, presenting cross selling opportunities to other group companies and international clients operating across international time zones.

Furthermore, the acquisition also gave Westminster the opportunity to add new services such as 24 hour travel advice, emergency medical & hostile extraction services to overseas travellers and third party remote monitoring & call centre services as well as providing it with a ready built nationwide service team and infrastructure to serve Westminster’s increasing UK customer base.

Following the recent acquisition, the Westminster Group now has four primary operating subsidiaries - Westminster International, Longmoor Security, RM Integrated Solutions and CTAC. Since its floatation onto London’s AIM market in 2007, Westminster has built a considerable global presence operating through established agents in 45 countries, offering a niche portfolio of security, defence, fire and safety products and services.

Yesterday, Westminster reported its FY09 preliminary results, in which it increased revenues by 45% year-on-year to £7.9m. In the twelve months ended 31 December, the company maintained a steady gross profit margin at 34.6% (FY08: 34.9%), and turned into profitability, posting an underlying profit of £217,000 compared to a £47,000 loss in the previous financial year.

During the financial year, Westminster invested heavily in expanding its overseas operations, and it has continued to build its international presence and infrastructure. Crucially, in response to the significant increase in enquiry levels and new orders, in January, Westminster International appointed a dedicated sales director, appointed several other new agents and opened two new offices, in Abu Dhabi and Kuala Lumpur.

“We have made a good start to 2010, with significant contracts being won by all of our operating divisions, the acquisition of CTAC Limited, and the welcoming of three new institutional shareholders to our company through the recent equity placing”, Peter Fowler had commented, adding: “We are confident of a solid performance for 2010 and exciting growth prospects beyond.”

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