PipeHawk Regulatory News (PIP)

23 March 2015

PipeHawk plc

("PipeHawk" or the "Company")

Half-yearly results for the six months ended 31 December 2015

Chairman's Statement

In the six months ended 31 December 2015 the Company's turnover was £2,362,000 (2014: £2,583,000), resulting in a loss before taxation of £449,000 (2014: loss of £142,000) and a loss after taxation of £280,000 (2014: profit of £50,000).

At QM Systems, order intake for the period from June through to September 2015 was buoyant. However, orders anticipated to arrive during the latter part of 2015 were either delayed into 2016 or did not materialize. This dip in activity in the last quarter of 2015 contributed to the loss for the six months period. The order intake for 2016 to date has been very good with orders received from both existing and new clients, including a substantial order with Dana Automotive for an axle assembly line. We used the last quarter of 2015 to continue to work on broadening our customer offerings. One of these is a leading edge measurement system for high volume inspection of mechanical components to a very high accuracy and, while the conception of the project was initially aligned to a client enquiry, we have made the strategic decision to expand the deliverable to include an inspection product that is now being marketed to a number of key clients. Operational activity is currently at a peak with a number of projects at manufacturing and commissioning phases. The current order book and expected orders suggest a very busy end to the financial year.

PipeHawk has continued to develop, both technically and commercially, the e-Safe, e-Spade Lite and e-Spott product families during the period. Progress currently is focused on the development of a robust international business plan which is being partly funded by an initial €50,000 grant from H2020 (Phase 1) with a view to securing a much larger H2020 grant to assist with developing the marketing and sales strategy for the products globally (Phase 2). The initial €50,000 grant is released in two phases, the first of which has been received and the second of which is payable on the submission of the business plan which is due for completion early May 2016. The business plan then forms the basis for the application for the phase 2 funding. This is due for submission by end June 2106. We should know whether our application for phase 2 funding has been successful by early October 2016. While work to complete the submission of the business plan is ongoing we continue to actively market the e-Safe, e-Spade and e-Spott product families globally, through distribution partners, direct sales and marketing activity and attendance at a number of European exhibitions

Adien made a small profit in the period despite trading in some very competitive market conditions. A key framework agreement with a major MOD supplier is now beginning to accelerate which assists the outlook for 2016. In addition, a couple of major water industry frameworks are starting to gather pace following a slow initial uptake.

SUMO, in which the Group holds a 28.4% stake, struggled in the competitive market place and made a small loss in the period.

Finally, our Finance Director, Bob Tallentire, has accepted a prestigious position with a leading firm of international corporate finance advisers and tendered his resignation from his executive role. However, I am pleased to say that he has agreed to stay on as a non-executive director so his years of experience as MD of Adien and FD of the Group are not lost to us. I thank him for his steady hand on the financial tiller through some very tough times.

I am also delighted to announce the appointment of Mithi Padmanathan to the Board as Group Finance Director. Her wealth of experience will bring renewed drive and enthusiasm to the next phase of PipeHawk's growth.

Gordon Watt

Chairman

Enquiries:

Statement of Comprehensive Income

For the six months ended 31 December 2015

Consolidated Statement of Financial Position

As at 31 December 2015

Consolidated Statement of Cash Flow

For the six months ended 31 December 2015

Consolidated Statement of changes in equity

For the six months ended 31 December 2015

Notes to the Interim Results

1. Basis of preparation

The Interim Results for the six months ended 31 December 2015 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 2015, 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. (Loss)/Earnings per share

This has been calculated on the loss for the period of £280,000 (2014: profit £50,000) 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 2015.

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.