PipeHawk Regulatory News (PIP)

3 Mar 2006 07:00

Embargoed : not to be released until 7.00am on 3 March 2006 PipeHawk Plc ("the Group" or "the Company") Interim Results for the six months ended 31 December 2005 As I indicated in my statement in November 2005 that accompanied the finalresults for the year ended 30 June 2005, trading in the current year startedwell and I am delighted to report that the group's progress continues.The turnover (which includes our share of the turnover from the SUMO jointventure) for the six months ended 31 December 2005 of ‚£970,000 is an increaseof 30.2 per cent. over the comparative period in 2004 and the retained loss forthe six months ended 31 December 2005 has reduced to ‚£100,000 compared with aloss of ‚£270,000 in the same period last year.The Water Industry has now started investing a planned ‚£5.5 billion over theperiod 2005-2010 (‚£3 million per day) to improve drinking water, to protect theenvironment and to attempt to tackle the issue of pipe leakage, which has beenwell publicised over the last few years. The Board also anticipates an increasein public pressure towards water companies to reduce leakage particularly giventhe recent media coverage regarding the application by a water company for"water scarcity status" which will allow them to apply compulsory metering ontheir customers. Consequently, Adien have seen a significant increase inactivity in the water sector and this work will continue in 2006.Adien's program of diversification has seen them continue to secure prestigiouscontracts outside of the water industry. During the period Adien has againworked in mainland Europe on contracts which are expected to continue into theSummer of 2006.Similarly, SUMO has also benefited from the increase in activity in the watersector and shareholders will see from the accounts that we have consolidatedour first profit from their results. SUMO is now accelerating its aggressivemarketing campaign to secure further growth.The Technology Division continues to make progress. During the period it hassupported Adien in designing a Ground Penetrating Radar system to find largerdiameter waterpipes which are buried under fields. In addition to MineHawk, themine detection programme, which continues on track, the Technology Division isat an early stage in a number of other encouraging initiatives for thedevelopment of the next phase of the Company's growth.In summary, trading continues to improve and we continue to look forward to thefuture with confidence.Gordon WattChairman3 March 2006 SUMMARISED CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the six months ended 31 December 2005 Note Six months to Six months to 31 December 2005 31 December 2004 (Unaudited) (Unaudited) ‚£000 ‚£000 Turnover Group and share of joint venture 970 745 Less: share of joint venture (244) (190)turnover Turnover - continuing operations 726 555 Operating costs (841) (799) Operating loss (115) (244) Share of operating profit / (loss) 5 (15)in joint venture Loss on ordinary activities before (110) (259)interest and taxation Group interest payable and similar (20) (28)charges Loss on ordinary activities before (130) (287)taxation Tax on profit on ordinary 2 30 17activities Retained loss for the period (100) (270) P P Loss per share Basic and diluted 3 (0.4) (1.4)SUMMARISED CONSOLIDATED BALANCE SHEETat 31 December 2005 Note 31 December 31 December 2004 2005 (Unaudited) (Unaudited) ‚£000 ‚£000 Fixed assets Intangible assets 234 248 Tangible assets 256 302 Investment in joint venture 1 6 491 556 Current assets Stocks 284 312 Debtors 438 368 722 680 Creditors: amounts falling due within (846) (896)one year Net current liabilities (124) (216) Total assets less current liabilities 367 340 Creditors: amounts falling due after (630) (476)one year Net liabilities (263) (136) Capital and reserves Called up share capital 232 232 Share premium account 4,081 4,081 Profit and loss account (4,576) (4,449) Equity shareholders' deficit 6 (263) (136)SUMMARISED CONSOLIDATED CASH FLOW STATEMENTfor the six months ended 31 December 2005 Note Six months to Six months to 31 December 31 December 2005 2004 (Unaudited) (Unaudited) ‚£000 ‚£000 Net cash outflow from operating 4, 5 (22) (17)activities Returns on investment and servicing of (20) (28)finance Corporation tax received 80 - Capital expenditure and financial investment Payments for fixed assets (25) (20) Cash inflow / (outflow) before use of 13 (65)liquid resources and financing Financing New loans - 202 Repayment of loans (37) (13) Capital elements of finance payments - (26) (Decrease)/ increase in cash (24) 98NOTES TO THE FINANCIAL STATEMENTSfor the 6 months ended 31 December 2005 1. Basis of accounting The consolidated interim financial statements have been prepared on the basisof the accounting policies set out in the Group's 2005 financial statements.The interim financial statements are unaudited and do not constitute fullfinancial information as defined in section 240 of the companies Act 1985 (asamended). The comparative figures for the six months ended 31 December 2004 donot comprise full financial statements. No account has been taken of thetrading results or any other transactions entered into by the Group since 31December 2005. 2. Taxation No corporation tax was payable as a result of losses arising and the Companybenefits from the Government's "Research and Development Tax Credit Scheme". 3. Loss per share Six months to Six months 31 December 2005 to31 (Unaudited) December 2004 (Unaudited) These have been calculated on losses ‚£100,130 ‚£269,755of: The weighted average number of 23,203,808 23,203,808shares was: Basic and diluted (0.4p) (1.2p) 4. Reconciliation of operating loss to net cash outflow from operating activities Six months Six months to 31 December to 31 2005 December 2 (Unaudited) 004 (Unaudited) ‚£000 ‚£000 Operating loss (115) (244) Depreciation and amortisation 70 90 Movement in stocks (21) (31) Movement in debtors (19) (66) Movement in creditors 63 234 Net cash outflow from operations (22) (17) 5. Reconciliation of net cash flow to movement of net debt Six months Six months to to 31 31 December December 2004 2005 (Unaudited) (Unaudited) ‚£000 ‚£000 Change in cash (24) 98 Cash inflow/ (outflow) from increase/ 37 (163)(decrease) in debt and lease finance Net decrease/(increase) in debt resulting from 13 (65)cashflows New finance leases (56) - Movement in net debt for the period (43) (65) Opening net debt (677) (598) Closing net debt (720) (663) 6. Reconciliation of movement in shareholders' funds Six months to Six months to 31 December 31 December 2005 2004 (Unaudited) (Unaudited) ‚£000 ‚£000 Loss for the period (100) (270) Decrease in shareholders' funds (100) (270) Opening shareholders' funds (163) 134 Closing shareholders' funds (263) (136) 7. Dividends The directors are not proposing the payment of a dividend in respect of the sixmonths ended 31 December 2005. 8. Copies of interim results will be sent to shareholders shortly and will also be available at the Company's registered office, Systems House, Mill Lane, Alton, Hampshire GU34 2QG. ENDPIPEHAWK PLC