PIPEHAWK PLC

Interim / Quarterly Report • Mar 10, 2014

National Storage Mechanism | Additional information

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

PIPEHAWK PLC - Half-yearly Report

PR Newswire

London, March 7

                                                              10 March 2014                                 PipeHawk plc                         ("PipeHawk" or the "Company")         Half-yearly results for the six months ended 31 December 2013Chairman's StatementI 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 WattChairmanEnquiries:PipeHawk Plc                                             Tel. No. 01252 338 959Gordon Watt (Chairman)Sanlam Securities UK Limited(Nomad and Broker)           Tel. No. 020 7628 2200David Worlidge/Simon ClementsStatement of Comprehensive IncomeFor 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          £'000Revenue                                     2,609          1,984          5,224Staff 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 developmentexpenditureAmortisation and impairment of                  -              -        (2,520)research and developmentexpenditureOperating (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 andtaxationFinance 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 CompanyOther 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)dilutedConsolidated Statement of Financial PositionAs at 31 December 2013Assets                                      As at          As at          As at                                      31 December    31 December        30 June                                             2013           2012           2013                                      (unaudited)    (unaudited)      (audited)                                            £'000          £'000          £'000Non-current assetsProperty, plant and equipment                 196            228            205Goodwill                                    1,061          1,061          1,061Intangible assets                               -          2,451              -Investment in joint venture                    58             93             58                                            1,315          3,833          1.324Current assetsInventories                                   115             30            110Current tax assets                             38             16             47Trade and other receivables                 1,323          1,278          1,390Cash                                          365            741            383                                            1,841          2,065          1,931Total Assets                                3,156          5,898          3,254Equity and liabilitiesEquityShare capital                                 330            330            330Share premium                               5,151          5,151          5,151Other reserves                            (7,647)        (5,408)        (7,457)                                          (2,166)             73        (1,976)Non-current liabilitiesBorrowings                                  2,458          2,673          2,519Trade and other payable                     1,584          1,520          1,522                                            4,042          4,193          4,041Current liabilitiesTrade and other payables                    1,261          1,596          1,163Bank overdrafts and loans                      19             36             26                                            1,280          1,632          1,189Total equity and liabilities                                            3,156          5,898          3,254Consolidated Statement of Cash FlowFor 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          £'000Cash inflow from operatingactivities(Loss)/Profit from operations               (168)            169        (1,769)Adjustments for:Impairment of intangible assets                 -              -          2,520Depreciation                                   45             47             90                                            (123)            216            841Decrease in inventories                       163            119             39Decrease /(Increase) in                        76          (425)          (568)receivables(Decrease)/Increase in liabilities            (9)            943            356Cash generated in operations                  107            853            668Interest paid                                (76)           (86)            (6)Corporation tax received                       54            104            104Net cashgenerated fromoperating                85            871            766activitiesCash flows from investingactivitiesDevelopment costs paid                          -          (103)          (172)Purchase of plant and equipment              (37)           (80)          (101)Sale of plant and equipment                     -              1              2Net cash generated/(used in) from              48          (182)          (271)investing activitiesCash flows from financingactivitiesNew loans and finance leases                    -             48             59Repayment 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 equivalentsCash and cash equivalents at                  383            189            189beginning of periodCash and cash equivalents at end              365            741            383of periodConsolidated Statement of changes in equityFor the six months ended 31 December 2013                                        Share      Share    Retained      Total                                      capital    premium    earnings                                                 account                                        £'000      £'000       £'000      £'0006 months ended 31 December 2012As at 1 July 2012                         330      5,151     (5,525)       (44)Profit for the period                       -          -         117        117As at 31 December 2012                    330      5,151     (5,408)         7312 months ended 30 June 2013As 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 2013As 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 Results1. Basis of preparationThe 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 informationThe 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     £'0006 months ended 31 December 2013Total segmental revenue                    748           85     1,776     2,609Segmental result                            34        (140)      (63)     (169)Finance costs                              (3)         (73)         -      (76)Share of operating profit in                                                  1joint ventureLoss before taxation                                                      (244)Segment assets                           1,145          424     1,587     3,156Segment liabilities                        816        3,362     1,141     5,322Depreciation and amortisation               29            -        16        456 months ended 31 December 2012Total segmental revenue                    906           72     1,006     1,984Segmental result                           128         (76)       117       169Finance costs                              (4)         (82)         -      (86)Share of operating loss in joint                                              -ventureProfit before taxation                                                       83Segment assets                           1,052        2,877     1,969     5,898Segment liabilities                        896        3,155     1,774     5,825Depreciation and amortisation               33           14         -        4712 months ended 30 June 2013Total segmental revenue                  1,780          171     3,273     5,224Segmental result                           271      (2,471)       431   (1,769)Finance costs                              (6)        (156)         -     (162)Share of operating loss in joint                                           (35)ventureLoss before taxation                                                    (1,966)Segment assets                           1,149          426     1,679     3,254Segment liabilities                        851        3,209     1,170     5,230Depreciation and amortisation               62        2,345       203     2,6103. (Loss)/Profit per shareThis 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. DividendsNo dividend is proposed for the six months ended 31 December 2013.5. Copies of Interim ResultsThe 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.