Now that the Westminster Group (LSE: WSG) share price languishes below 20p the next two targets investors ought to have in mind are 15p and 10p.
I had this to say the last time I looked at Westminster Group when it’s shares were 22p:
Like Clontarf Energy (LSE: CLON) Westminster likes to issue shares as a means of staying afloat.
It always amuses me when companies are ‘pleased to announce’ a set of results like this as the only ones who can be pleased are the highly paid executives.
No need even consult the balance sheet: this is yet another AIM listed bargepole stock.
What was interesting at the time is the fact that I did not even consult the balance sheet.
Both the income and cash flow statements had enough damage on them to preclude Westminster Group for an equity position in The Model Portfolio.
The cash flow statement for the year ended 31 December 2014 saw a massive £2,704,000 in gross proceeds from the issue of ordinary shares.
The previous year the figure was £3,081,000.
This is highly damaging considering the net cash from operating activities amounted to minus £1,645,000 hence my conclusion about the issuance of shares at the time.
Why Investors Should Target 15p
At the time of writing the share price is already 17p and today’s RNS looks worrying for Westminster’s flagship project:
On 29 July 2015, the Company announced that it had identified that one of the prop shafts on its flagship vessel is out of line and may need repair. Following close examination it was decided that the shaft would need to be removed for repair. This is a specialist job requiring specialist equipment which has proved a challenge in country and accordingly the Company engaged specialists from the UK to assist with the works. The shaft has now been removed and is being returned to the UK for correction, which is expected to take around 15 days.
Accordingly operations are now expected to commence in September 2015.
In the meantime expect the share price to drift lower with 10p an absolute worst-case scenario barring any significant news like perhaps that the 21-year potential $300 million contract with the government of Sierra Leone to provide ferry and terminal services will positively impact the cash flow and income statements.
As always news, good or bad, will be the key driver of the share price.