PipeHawk Regulatory News (PIP)

PipeHawk Plc - Half-year Report

PR Newswire

London, March 17

20 March 2017

PipeHawk plc

(“PipeHawk”, the “Company” or the “Group”)

Results for the six months ended 31 December 2016

Chairman’s Statement

I am pleased to report that the Company’s turnover in the six months ended 31 December 2016 was £2,999,000 (2015: £2,362,000), resulting in a loss before taxation of £180,000 (2015: loss of £449,000) and a profit after taxation of £43,000 (2015: loss after taxation £280,000).

At QM Systems, order intake for the first part of the period was buoyant with orders taken of approximately £1.3 million in the first three months. Order intake slowed during the latter part of the period, however the outstanding quotes remain considerable with a number of significant contracts awaiting award over the coming weeks. During September 2016, QM Systems expanded its sales resource and this is beginning to open new doors to markets and opportunities that it was previously not targeting. This has resulted in our potential order book being higher than ever before and whilst the past few months have been quieter than normal on the sales side, we are expecting order intake to increase significantly throughout the remainder of this financial year and into the next. The operational side of the business has remained busy as we work to complete ongoing projects. We have seen significant improvement in margin realisation across all new projects which appears to demonstrate that the changes we have made to our business during the previous financial year are having a positive effect. All areas of the business remain very busy and this looks set to continue as the economy and business in general continue to focus on achieving greater productivity, which is the backbone of QM Systems’ service offering.

PipeHawk has continued to build on its UK, EU and international sales strategy for e-Safe product range and supply through a number of key partners is expected to increase through 2017. The rejection of our H2020 phase 2 grant re-application was a disappointment. However, following consultation with our advisers, we shall be re-submitting what we hope will be regarded as an improved application, building on the feedback we received from the assessors. In the meantime, we are working to improve the profitability of our product range and by the end of the financial year we expect to achieve cost reductions with a number of key components. With increased exposure through trade press and product placement at a greater number of industry events and trade shows than in previous years, both in the UK and overseas, we are well placed to achieve our goal of doubling unit sales over the forthcoming year.

For Adien, the six months to 31 December has been a challenging time in an extremely competitive market. In recent months, our focus on specialist and larger contracts has seen a significant number of contracts being awarded to us within the airport, transport and water sectors. In Scotland, we have also secured significant contracts within the rail, power and infrastructure sectors. As a result, we are currently experiencing good levels of efficiency, turnover and profitability and expect this to continue for the remainder of the financial year.

SUMO, in which the Group holds a 28.4% stake, struggled in the competitive market place.

On 1 February 2017, Mirrasand Partnership agreed to roll over the outstanding £150,000 due for repayment on that date with a revised payment date of 31 May 2017.

Related party matters

In the period under review, I was not called upon to provide working capital support to the Company.

My letter of support was renewed on 14 November 2016 for a further year. Loans provided by me, other than those covered by the CULS agreement, are unsecured and accrue interest at an annual rate of Bank of England base rate plus 2.15 per cent.

In addition to the loans I have provided to the Company in previous years, my fellow directors and I have deferred a certain proportion of our fees and interest payments until the Company is in a suitably strong position to make the full payments. At 31 December 2016, these deferred fees and interest payments amounted to approximately £1,675,000 in total, all of which have been accrued in the Company’s accounts.

Gordon WattChairman

Enquiries:

Statement of Comprehensive IncomeFor the six months ended 31 December 2016

Consolidated Statement of Financial PositionAs at 31 December 2016

Consolidated Statement of Cash FlowFor the six months ended 31 December 2016

Consolidated Statement of changes in equityFor the six months ended 31 December 2016

Notes to the Interim Results

1. Basis of preparation

The interim results for the six months ended 31 December 2016 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 2016, 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.

3. Earnings/(Loss) per share

This has been calculated on the profit for the period of £43,000 (2015: loss £280,000) and the number of shares used was 33,020,515 (2015: 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 2016.

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.