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LONDON (Alliance News) - PipeHawk PLC Monday swung into a loss in the half year ended December 31, 2013, despite seeing revenue rise, due to higher staff and administrative expenses arising from the expansion of its QM Systems Ltd business.
PipeHawk produces ground probing radar equipment. Its QM Systems unit provides services for electronic system design for the automotive, aerospace and rail sectors.
The company posted a pretax loss of GBP244,000, versus a profit of GBP83,000, despite seeing revenue grow to GBP2.6 million from GBP2.0 million in the previous year. Pipehawk cited higher staff costs and administrative expenses. Staff costs rose to GBP1.2 million from GBP950,000, and administrative expenses rose to GBP1.6 million from GBP865,000.
PipeHawk said it had completed the re-alignment of its QM Systems business during the period; doubling it in size in order to maintain its capability for growth. It invested in headcount in the business, and expanded factory and office space in the business.
The company expressed confidence in the future of the division, saying QM Systems entered the second half with a healthy order book including five new contract wins.
Its Aiden utility detection and mapping business remained profitable, PipeHawk said, although at a lower level than the previous year. SUMO, in which PipeHawk has a 28.4% interest, continues to consolidate its recent acquisitions and posted a small profit.
PipeHawk is continuing development of its e-Safe and e-Spade Lite family of utility detecting products, and continued work on its joint venture with Qinetiq Group PLC to develop a new wind farm planning tool.
"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," said Chairman Gordon Watt in a statement.
Watt also noted that during the half year he had not been required to provide additional working capital to support the company, which he said was a testament to PipeHawk's growing strength.
Shares in PipeHawk were trading down 14% at 4.53 pence Monday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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