10 March 2014
PipeHawk plc
("PipeHawk" or the "Company")
Half-yearly results for the six months ended 31 December 2013
Chairman's Statement
I am pleased to report that the Company's turnover in the six months ended 31
December 2013 was £2,609,000, an increase on turnover for the corresponding
period last year of 24 per cent. (2012: £1,984,000), resulting in a loss before
taxation of £244,000 (2012: profit of £83,000 after capitalising £103,000 of
research and development expenditure.)
During the period, QM Systems has completed a re-alignment of business practice
to effect "best in class" ensuring we facilitate the continuance of business
growth whilst we continue to maintain the high standards in terms of the
quality of our systems delivered and the timeliness of those deliveries that
our clients have come to expect. During the year ended 30 June 2013, QM Systems
doubled in size, and during the six months ended 31 December 2013, in order to
maintain the ability to grow at pace, we have made significant investment in
new people in key engineering and management roles and in expanding of our
factory and offices, effectively doubling our floor space and almost tripling
our delivery capacity. All work and investment has been completed during the
period under review. During the period, QM Systems order intake has remained
very buoyant and we enter the second half of this financial year with a healthy
order book, including contracts secured with five new clients. Since the year
end our £1.6 million Kingspan production line has entered full production run
up. In addition, we have shipped out to India a complete production line for an
off highway vehicles manufacturer.
During the period, PipeHawk has continued the development of the e-Safe and
e-Spade Lite family of next generation products. I am pleased to announce that
orders have now been received for the first units and PipeHawk is committed to
fulfilling these initial orders during the first half of 2014. From marketing
activity carried out over the last six months we are confident that sales for
the modular based e-Safe and e-Spade Lite product family will increase to
significant volume. Our focus has remained on ensuring that the product, when
launched, is mature, robust and a market leader in its own right, it is
designed to be the most competitive and user friendly product on the market
today for utilities detection and will provide a low cost solution to safely
detecting services underground. In addition to our utilities product
developments, PipeHawk has continued work on our joint venture with Qinetiq to
provide NATS with a new and scalable wind farm planning tool. This tool, which
is based on PipeHawk's experience with radio frequency transmissions, builds on
studies undertaken previously with NATS.
Adien has remained profitable, albeit at a lower level to last year and
continues to concentrate on working with major infrastructure providers. Adien
continues to target framework agreement with major infrastructure providers as
this provides stability and recurring revenue streams.
SUMO, in which the Group holds a 28.4% stake, continues to consolidate its
recent acquisitions in the geophysical survey market and traded at a small
profit.
Overall, whilst I am somewhat disappointed by our bottom line result for the
six months, I am very happy that we have now made the strategic investment in
our facilities, order book and marketing effort which we believe have laid the
foundations for significant growth in the future.
In the period under review, I was not called upon to provide further working
capital support to the Company which is a further testament to the growing
strength of the Group.
Gordon Watt
Chairman
Enquiries:
PipeHawk Plc Tel. No. 01252 338 959
Gordon Watt (Chairman)
Sanlam Securities UK Limited(Nomad and Broker) Tel. No. 020 7628 2200
David Worlidge/Simon Clements
Statement of Comprehensive Income
For the six months ended 31 December 2013
6 months ended 6 months ended Year ended
31 December 31 December 30 June
2013 2012 2013
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Revenue 2,609 1,984 5,224
Staff costs (1,191) (950) (2,106)
General administrative expenses (1,586) (865) (2,367)
Operating (loss) /profit before (169) 169 751
amortisation and impairment of
research and development
expenditure
Amortisation and impairment of - - (2,520)
research and development
expenditure
Operating (loss)/ profit (169) 169 (1,769)
Share of operating profit / (loss) 1 - (35)
in joint venture
(Loss)/Profiton ordinary (168) 169 (1,804)
activities before interest and
taxation
Finance costs (76) (86) (162)
(Loss)/Profit before taxation (244) 83 (1,966)
Taxation 54 34 34
(Loss)/Profit for the period (190) 117 (1,932)
attributable to equity holders of
the Company
Other comprehensive income - - -
Total comprehensive (loss)/income (190) 117 (1,932)
for the period net of tax
(Loss)/Profit per share (pence) - (0.57) 0.36 (5.85)
basic
(Loss)/Profit per share (pence) - (0.44) 0.24 (3.98)
diluted
Consolidated Statement of Financial Position
As at 31 December 2013
Assets As at As at As at
31 December 31 December 30 June
2013 2012 2013
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 196 228 205
Goodwill 1,061 1,061 1,061
Intangible assets - 2,451 -
Investment in joint venture 58 93 58
1,315 3,833 1.324
Current assets
Inventories 115 30 110
Current tax assets 38 16 47
Trade and other receivables 1,323 1,278 1,390
Cash 365 741 383
1,841 2,065 1,931
Total Assets 3,156 5,898 3,254
Equity and liabilities
Equity
Share capital 330 330 330
Share premium 5,151 5,151 5,151
Other reserves (7,647) (5,408) (7,457)
(2,166) 73 (1,976)
Non-current liabilities
Borrowings 2,458 2,673 2,519
Trade and other payable 1,584 1,520 1,522
4,042 4,193 4,041
Current liabilities
Trade and other payables 1,261 1,596 1,163
Bank overdrafts and loans 19 36 26
1,280 1,632 1,189
Total equity and liabilities
3,156 5,898 3,254
Consolidated Statement of Cash Flow
For the six months ended 31 December 2013
6 months ended 6 months ended Year ended
31 December 31 December 30 June
2013 2012 2013
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash inflow from operating
activities
(Loss)/Profit from operations (168) 169 (1,769)
Adjustments for:
Impairment of intangible assets - - 2,520
Depreciation 45 47 90
(123) 216 841
Decrease in inventories 163 119 39
Decrease /(Increase) in 76 (425) (568)
receivables
(Decrease)/Increase in liabilities (9) 943 356
Cash generated in operations 107 853 668
Interest paid (76) (86) (6)
Corporation tax received 54 104 104
Net cashgenerated fromoperating 85 871 766
activities
Cash flows from investing
activities
Development costs paid - (103) (172)
Purchase of plant and equipment (37) (80) (101)
Sale of plant and equipment - 1 2
Net cash generated/(used in) from 48 (182) (271)
investing activities
Cash flows from financing
activities
New loans and finance leases - 48 59
Repayment of bank and other loans (51) (171) (314)
Repayment of finance leases (15) (14) (46)
Net cash generated from financing (66) (137) (301)
activities
(Decrease) / Increasein cash and (18) 552 194
cash equivalents
Cash and cash equivalents at 383 189 189
beginning of period
Cash and cash equivalents at end 365 741 383
of period
Consolidated Statement of changes in equity
For the six months ended 31 December 2013
Share Share Retained Total
capital premium earnings
account
£'000 £'000 £'000 £'000
6 months ended 31 December 2012
As at 1 July 2012 330 5,151 (5,525) (44)
Profit for the period - - 117 117
As at 31 December 2012 330 5,151 (5,408) 73
12 months ended 30 June 2013
As at 1 July 2012 330 5,151 (5,525) (44)
Loss for the period - - (1,932) (1,932)
As at 30 June 2013 330 5,151 (7,457) (1,976)
6 months ended 31 December 2013
As at 1 July 2013 330 5,151 (7,457) (1,976)
Loss for the period (190) (190)
As at 31 December 2013 330 5,151 (7,647) (2,166)
Notes to the Interim Results
1. Basis of preparation
The Interim Results for the six months ended 31 December 2013 are unaudited and
do not constitute statutory accounts in accordance with section 240 of the
Companies Act 2006.
Full accounts for the year ended 30 June 2013, on which the auditors gave an
unqualified report and contained no statement under Section 237 (2) or (3) of
the Companies Act 2006, have been delivered to the Registrar of Companies.
The interim financial information has been prepared on a basis which is
consistent with the accounting policies adopted by the Group for the last
financial statements and in compliance with basic principles of IFRS.
2. Segmental information
The Group operates in one geographical location being the UK. Accordingly the
primary segmental disclosure is based on activity.
Utility Development, Test Total
detection assembly and system
and mapping sale of GPR solutions
services equipment
£'000 £'000 £'000 £'000
6 months ended 31 December 2013
Total segmental revenue 748 85 1,776 2,609
Segmental result 34 (140) (63) (169)
Finance costs (3) (73) - (76)
Share of operating profit in 1
joint venture
Loss before taxation (244)
Segment assets 1,145 424 1,587 3,156
Segment liabilities 816 3,362 1,141 5,322
Depreciation and amortisation 29 - 16 45
6 months ended 31 December 2012
Total segmental revenue 906 72 1,006 1,984
Segmental result 128 (76) 117 169
Finance costs (4) (82) - (86)
Share of operating loss in joint -
venture
Profit before taxation 83
Segment assets 1,052 2,877 1,969 5,898
Segment liabilities 896 3,155 1,774 5,825
Depreciation and amortisation 33 14 - 47
12 months ended 30 June 2013
Total segmental revenue 1,780 171 3,273 5,224
Segmental result 271 (2,471) 431 (1,769)
Finance costs (6) (156) - (162)
Share of operating loss in joint (35)
venture
Loss before taxation (1,966)
Segment assets 1,149 426 1,679 3,254
Segment liabilities 851 3,209 1,170 5,230
Depreciation and amortisation 62 2,345 203 2,610
3. (Loss)/Profit per share
This has been calculated on the loss for the period of £190,000 (2012: profit
£117,000) and the number of shares used was 33,020,515 (2012: 33,020,515), being
the weighted average number of share in issue during the period.
4. Dividends
No dividend is proposed for the six months ended 31 December 2013.
5. Copies of Interim Results
The Interim Results will be posted on the Company's web site www.pipehawk.com
and copies are available from the Company's registered office at 4, Manor Park
Industrial Estate, Wyndham Street, Aldershot GU12 4NZ.