Shares of Westminster Group PLC (LON: WSG) surged 31.95% after revealing that it had won a 20-year managed services contract to provide ground security services within five airports in the Democratic Republic of Congo.
Investors cheered the contract win, which is expected to generate $6 million in revenues within the first 12 months. The company’s earnings are likely to rise over the years as passenger numbers increase as the global COVID-19 pandemic is resolved.
Westminster Group clarified that the contract would officially kick off in September 2021 due to the 90-day transition period to allow the operational planning and recruitment processes to be completed.
The contract is supposed to last 20 years with a possible 5-year renewal period to follow, which shows the DRC government’s commitment to delegating the ground security operations at the country’s four international airports and one national airport.
Peter Fowler, Westminster Group’s CEO, praised the recent contract award, saying: “We stated in our 2020 annual report, issued in May 2021, that delivering at least one more large-scale managed services contract this year, despite COVID challenges, was one of our priority goals. I am therefore delighted that our Services Division has secured this important new long-term managed services contract in the DRC, one of several such opportunities being pursued worldwide, which further expands our airport security projects and international presence.”
He added that the contract win resulted from the strategic acquisition of its French business Euro Ops in 2019, which exposed it to significant opportunities in French-speaking African countries.
The company will be paid directly via a per passenger fee denominated in US dollars, collected via the airport ticketing system and paid directly to Westminster by the airlines operating at each airport, effectively bypassing government bureaucracy.
Westminster has sealed a lucrative contract after months of negotiations following delays occasioned by COVID-19 restrictions.
Many will be monitoring the implementation of the contract, given that government contracts are open to public scrutiny and may be challenged in court, leading to delays or cancellations.
Westminster Group share price.
Westminster Group shares surged 31.95% to trade at 5.41p, rising from Monday’s closing price of 4.10p.
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