LONDON (Alliance News) - Pipehawk PLC on Monday said its pretax loss widened in the last financial year after revenue fell, but said trading has significantly improved in the past five months as the company tries to return to growth and profitability.
Pipehawk shares were down 29% to 4.80 pence per share on Monday afternoon, dropping after the announcement.
The electronic systems developer said its pretax loss in the financial year ended June 30 widened to GBP753,000 from a GBP622,000 loss a year earlier, after revenue dropped to GBP4.6 million from GBP5.1 million.
Pipehawk's QM Systems division, which offers automation engineering services, reported results below management expectations after a number of "substantial orders" were delayed in late 2014 and early 2015, it said.
However, order intake at QM Systems has picked up since the UK general election in May, and the company said it believes the period of "political uncertainty" will be a "one-off glitch" in the division's progress. Pipehawk is expecting the division to return to profitability and growth in the current financial year.
"Since the year-end, order intake has been greatly improved, and the company is now quoting higher monthly values in terms of potential sales than ever before," Pipehawk said. "The period under review has seen a number of new clients added to QM Systems growing portfolio, which coupled with excellent client retention provides a strong platform for future growth in terms of revenue and profitability."
The Technology division, which is the bedrock of the company, focused on research and development, continued to develop both technically and commercially the e-Safe, e-Spade Lite and e-Spott product families, which help detect utility lines such as pipes underground.
"Sales for the e-Safe/e-Spade lite range of products are continuing to develop, however with our limited resource it is difficult to open avenues as quickly as we would like into new markets," said Pipehawk.
At Adien Ltd, Pipehawk's utility detection and mapping services company, trading remained "tough" during the year when a number of framework agreements came up for renewal and order intake prior to them being renewed was reduced, said the company.
Pipehawk said revenue at Adien has increased 25% since the year end and has returned to profitability.
Sumo, the company's division which provides utility mark-out services, continued to benefit from growth and profitability in the year through its strong presence in the geophysical ground probing radar sector.
Revenue from Sumo rose to GBP4.5 million, almost all of the group's revenue for the year, from GBP4.3 million a year earlier, but its operating profit still fell to GBP41,000 from GBP100,000.
"The PipeHawk group remains committed to creating sustainable earnings-based growth and focusing on the expansion of its business with forward-looking products and services," said the company.
"PipeHawk is committed to technologies and products that unite the goals of customer value and sustainable development. I remain optimistic in my outlook for the group," it added.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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PipeHawk (PIP)