PipeHawk Regulatory News (PIP)

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 31December 2013 was £2,609,000, an increase on turnover for the correspondingperiod last year of 24 per cent. (2012: £1,984,000), resulting in a loss beforetaxation of £244,000 (2012: profit of £83,000 after capitalising £103,000 ofresearch and development expenditure.) During the period, QM Systems has completed a re-alignment of business practiceto effect "best in class" ensuring we facilitate the continuance of businessgrowth whilst we continue to maintain the high standards in terms of thequality of our systems delivered and the timeliness of those deliveries thatour clients have come to expect. During the year ended 30 June 2013, QM Systemsdoubled in size, and during the six months ended 31 December 2013, in order tomaintain the ability to grow at pace, we have made significant investment innew people in key engineering and management roles and in expanding of ourfactory and offices, effectively doubling our floor space and almost triplingour delivery capacity. All work and investment has been completed during theperiod under review. During the period, QM Systems order intake has remainedvery buoyant and we enter the second half of this financial year with a healthyorder book, including contracts secured with five new clients. Since the yearend our £1.6 million Kingspan production line has entered full production runup. In addition, we have shipped out to India a complete production line for anoff highway vehicles manufacturer. During the period, PipeHawk has continued the development of the e-Safe ande-Spade Lite family of next generation products. I am pleased to announce thatorders have now been received for the first units and PipeHawk is committed tofulfilling these initial orders during the first half of 2014. From marketingactivity carried out over the last six months we are confident that sales forthe modular based e-Safe and e-Spade Lite product family will increase tosignificant volume. Our focus has remained on ensuring that the product, whenlaunched, is mature, robust and a market leader in its own right, it isdesigned to be the most competitive and user friendly product on the markettoday for utilities detection and will provide a low cost solution to safelydetecting services underground. In addition to our utilities productdevelopments, PipeHawk has continued work on our joint venture with Qinetiq toprovide NATS with a new and scalable wind farm planning tool. This tool, whichis based on PipeHawk's experience with radio frequency transmissions, builds onstudies undertaken previously with NATS. Adien has remained profitable, albeit at a lower level to last year andcontinues to concentrate on working with major infrastructure providers. Adiencontinues to target framework agreement with major infrastructure providers asthis provides stability and recurring revenue streams. SUMO, in which the Group holds a 28.4% stake, continues to consolidate itsrecent acquisitions in the geophysical survey market and traded at a smallprofit. Overall, whilst I am somewhat disappointed by our bottom line result for thesix months, I am very happy that we have now made the strategic investment inour facilities, order book and marketing effort which we believe have laid thefoundations for significant growth in the future. In the period under review, I was not called upon to provide further workingcapital support to the Company which is a further testament to the growingstrength of the Group. Gordon WattChairman Enquiries: PipeHawk Plc Tel. No. 01252 338 959Gordon Watt (Chairman) Sanlam Securities UK Limited(Nomad and Broker) Tel. No. 020 7628 2200David 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 751amortisation and impairment ofresearch and developmentexpenditure Amortisation and impairment of - - (2,520)research and developmentexpenditure 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 andtaxation 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 ofthe 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 operatingactivities (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 766activities Cash flows from investingactivities 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 financingactivities 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 194cash equivalents Cash and cash equivalents at 383 189 189beginning of period Cash and cash equivalents at end 365 741 383of 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 anddo not constitute statutory accounts in accordance with section 240 of theCompanies Act 2006. Full accounts for the year ended 30 June 2013, on which the auditors gave anunqualified report and contained no statement under Section 237 (2) or (3) ofthe Companies Act 2006, have been delivered to the Registrar of Companies. The interim financial information has been prepared on a basis which isconsistent with the accounting policies adopted by the Group for the lastfinancial statements and in compliance with basic principles of IFRS. 2. Segmental information The Group operates in one geographical location being the UK. Accordingly theprimary 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 1joint 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), beingthe 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.comand copies are available from the Company's registered office at 4, Manor ParkIndustrial Estate, Wyndham Street, Aldershot GU12 4NZ.