Final Results

PipeHawk Plc                                  

                  ("PipeHawk", "the Group" or "the Company")                   

                              Preliminary Results                              
                        for the year ended 30 June 2006                        

CHAIRMAN'S STATEMENT

This year has marked a turning point in the fortunes of PipeHawk; for the first
time since the Company was admitted to trading on AIM in December 2000, the
Group is reporting a profit for the year.

I am delighted to report the turnover for the year ended 30 June 2006 was £
3,312,000, which is an increase of 124 per cent. on the previous year (2005 : £
1,477,000), and that the Company achieved a profit after taxation for the year
of £141,000 (2005 : loss £297,000). These improved results reflect the
contribution from QM Systems Limited ("QM Systems"), which was acquired in
March 2006. The results for the year include turnover of £1,257,000 and
operating profit of £231,000 relating to QM Systems. Notwithstanding the
contribution from QM Systems, turnover attributable to the PipeHawk business
increased by £578,000, to £2,047,000, an increase of 39 per cent. over the
previous year.

The integration of QM Systems is progressing well and is ahead of management's
expectations. Their technology development team is already working with
PipeHawk's Technology division on the next generation of PipeHawk GPR
equipment.

The trading performances of the Group's four major business areas are set out
below;

Adien

Adien, our high definition underground mapping and planning service, has,
during the year, both increased its manpower and improved its use of technology
to increase the efficiency of its teams.

The change in strategy adopted during 2002, from selling GPR equipment to
providing a service to the utilities industry has, after some initial
scepticism, been well received. The use of GPR assisted surveys is now more
widely specified by the planning authorities; and is increasingly valued by
contractors as essential both for the smooth running of the contract and for
health and safety reasons.

From September 2006 Adien's service offering has been strengthened following
the issue by Ofcom of the first two GPR user licences to PipeHawk and Adien.
The licences have been issued following the regulation of the GPR industry
after years of negotiations with radio licensing authorities led by our
Technical Director, Richard Chignell. All users of GPR equipment operating
without a licence from Ofcom are now deemed to be working illegally and can be
subject to enforcement action.

The market for Adien's services continues to grow. This growth coupled with the
falling price of GPR equipment and increased availability of such equipment has
encouraged new entrants imitating the services of Adien to enter the market
resulting in some price competition. However, Adien's advantages of many year's
GPR experience, Ofcom licences, excellent service delivery and the links to
PipeHawk provide a level of protection against these new entrants.

SUMO

SUMO - a 36 per cent. owned joint venture, which provides instant mark out
services to its customers.

SUMO has also had a good year. It has increased its turnover to £1,449,000 from
£948,000 in 2005 and returned a profit of £2,000 for the year (2005: loss £
55,000). During the year it won the British Franchising Association's Brand
Builder of the Year Award. This has resulted in a significant increase in
demand for the Company's franchises. To accommodate this growth the Company has
moved to new, larger offices and has strengthened its management team.

SUMO received the third licence from Ofcom to operate GPR equipment.

During the year SUMO raised £100,000 from an outside investor for a 9 per cent.
holding in the company to finance its expansion. This investment places a value
of £1.1 million on SUMO and values PipeHawk's holding at £396,000, compared
with £15,000 shown on the Group's balance sheet.

Technology Division

I would like to congratulate Richard Chignell on his contribution to the
discussions with Ofcom which has resulted in a regulatory environment for GPR
equipment operation which the Board feel is fair and reasonable without being
heavy handed on a fledgling industry.

The Technology division has improved the efficiency and effectiveness of Adien
both in terms of "normal" subsurface information gathering and designing a GPR
system to find large diameter waterpipes buried under fields.

Considerable initial R & D work has been carried out in developing the next
generation of GPR equipment from an updated fully Ofcom compliant PipeHawk Mark
3 to the MineHawk, landmine detection vehicle. The Company has sought funding
for this landmine detection vehicle by way of an EU grant and the Board
anticipate receiving confirmation of this funding during the course of this
financial year.

QM Systems

The Company acquired QM Systems on 22 March 2006. QM Systems has a team of able
and skilled hardware and software designers, who develop and manufacture
innovative and cost effective solutions for clients, particularly in the
aerospace industry. They are currently working closely with Lockheed Martin and
Smiths Aerospace to develop rigorous testing systems for the power systems in
the Joint Strike Fighter Programme. If this initial development work is
successful the Board believe this may lead to a long term project.

Strategy and Outlook

Last year I said in my Chairman's Statement that "our strategy is to remain at
the forefront of applied GPR and non-invasive testing technologies, delivering
high quality value adding services and products which play a vital role in the
safety and protection of people worldwide".

2005/6 was a pivotal year in developing this strategy with:

 i. achievement of a profit;
   
ii. obtaining three Ofcom licences; and
   
iii. the acquisition of QM Systems.
   
Our ongoing strategy remains as stated above. The current year has started well
and we are confident that we can build on the successes of the past year. We
now have better critical mass to achieve our aims.

Gordon Watt
Chairman
8 November 2006


Consolidated Profit and Loss Account
For the year ended 30 June 2006

                                                             2006         2005
                                                                              
                                                            £'000        £'000
                                                                              
Turnover                                                                      
                                                                              
Group and share of joint venture                            3,312        1,477
                                                                              
Less: share of joint venture turnover                       (529)        (102)
                                                                              
Group turnover - total continuing activities                2,783        1,375
                                                                              
Group operating costs                                     (2,690)      (1,689)
                                                                              
Group operating profit/(loss)                                  93        (314)
                                                                              
Share of operating profit/(loss) in joint venture              19         (25)
                                                                              
Profit/(Loss) on ordinary activities before interest          112        (339)
and taxation                                                                  
                                                                              
Group interest receivable and similar income                    4            -
                                                                              
Group interest payable and similar charges                   (44)         (55)
                                                                              
Profit/(loss) on ordinary activities before taxation           72        (394)
                                                                              
Tax on profit on ordinary activities                           69           97
                                                                              
Transfer to reserves                                          141        (297)
                                                                              
                                                             2006         2005
                                                                              
                                                                p            p
                                                                              
Earnings/(Loss) per share                                                     
                                                                              
Basic                                                         0.6        (1.3)
                                                                              
Diluted                                                       0.4        (1.3)

There are no recognised gains or losses other than those reported above.


Consolidated Balance Sheet
As at 30 June 2006

                                            2006     2006      2005        2005
                                                                               
                                           £'000    £'000     £'000       £'000
                                                                               
Fixed assets                                                                   
                                                                               
Intangible assets                                   1,121                   241
                                                                               
Tangible assets                                       354                   239
                                                                               
Investment in joint venture:                                                   
                                                                               
Share of gross assets                         70                 39            
                                                                               
Share of gross liabilities                  (55)               (43)            
                                                                               
                                                       15                   (4)
                                                                               
                                                    1,490                   476
                                                                               
Current assets                                                                 
                                                                               
Stocks                                                757                   263
                                                                               
Debtors                                               969                   469
                                                                               
Cash at bank                                          221                     -
                                                                               
                                                    1,947                   732
                                                                               
Creditors: amounts falling due within             (2,088)               (1,260)
one year                                                                       
                                                                               
Net current liabilities                             (141)                 (528)
                                                                               
Total assets less current liabilities               1,349                  (52)
                                                                               
Creditors: amounts falling due after                (602)                 (111)
more than one year                                                             
                                                                               
Net assets/(liabilities)                              747                 (163)
                                                                               
Capital and reserves                                                           
                                                                               
Called up share capital                               267                   232
                                                                               
Share premium account                               4,815                 4,081
                                                                               
Profit and loss account                           (4,335)               (4,476)
                                                                               
Equity shareholders' funds/(deficit)                  747                 (163)


Consolidated Cash Flow Statement
For the year ended 30 June 2006

                                                               2006        2005
                                                                               
                                                              £'000       £'000
                                                                               
Net cash inflow/(outflow) from operating                        133       (126)
activities                                                                     
                                                                               
Returns on investments and servicing of finance                                
                                                                               
Interest received                                                 4           -
                                                                               
Interest element of finance lease rentals                       (3)         (3)
                                                                               
Interest paid                                                  (41)        (52)
                                                                               
                                                                 93       (181)
                                                                               
Corporation tax received                                         77          96
                                                                               
Capital expenditure and financial investment                                   
                                                                               
Payments for tangible fixed assets                             (96)        (43)
                                                                               
Acquisitions and disposals                                                     
                                                                               
Cash acquired through purchase of subsidiary                    221           -
                                                                               
Costs of acquisition                                           (51)           -
                                                                               
                                                                170        (43)
                                                                               
Cash inflow/(outflow) before use of liquid                      244       (128)
resources and financing                                                        
                                                                               
Financing                                                                      
                                                                               
New loans                                                         -         216
                                                                               
Repayment of loans                                            (110)        (15)
                                                                               
Capital element of finance lease and hire                      (21)        (26)
purchase payments                                                              
                                                                               
                                                              (131)         175
                                                                               
Increase in cash                                                113          47

Notes to the Cash Flow Statement

A. Reconciliation of Operating Profit/(Loss) to Net Cash Outflow from Operating
Activities

                                                             2006         2005
                                                                              
                                                            £'000        £'000
                                                                              
Operating profit/(loss)                                        93        (314)
                                                                              
Amortisation of intangible assets                              27           14
                                                                              
Depreciation of tangible fixed assets                         169          169
                                                                              
Working capital movements                                                     
                                                                              
Stock and work in progress                                     65           17
                                                                              
Debtors                                                     (323)        (182)
                                                                              
Creditors                                                     102          170
                                                                              
Net cash inflow/(outflow) from operating                      133        (126)
activities                                                                    

B. Reconciliation of Net Cash Flow to Movement of Net Debt

                                                              2006         2005
                                                                               
                                                             £'000        £'000
                                                                               
Increase in cash                                               113           47
                                                                               
Increase in debt and finance lease agreements                (171)        (175)
                                                                               
Increase in net debt from cash flows                          (58)        (128)
                                                                               
Debt acquired with subsidiary                                 (10)            -
                                                                               
Increase in net debt                                          (68)        (128)
                                                                               
Opening net debt                                             (726)        (598)
                                                                               
Closing net debt                                             (794)        (726)
                                                                               

C. Analysis of changes in net debt

                                       1 July  Cashflow   Acquisition   30 June
                                         2005           of subsidiary      2006
                                                  £'000                        
                                        £'000                   £'000     £'000
                                                                               
Cash at bank and in hand                    -         -           221       221
                                                                               
Bank overdraft                          (150)     (108)             -     (258)
                                                                               
Cash                                    (150)     (108)           221      (37)
                                                                               
Loans                                   (576)      (69)          (10)     (655)
                                                                               
Finance leases                              -     (102)             -     (102)
                                                                               
Borrowings                              (576)     (171)          (10)     (757)
                                                                               
Net debt                                (726)     (279)           211     (794)
                                                                               

                      Notes to the preliminary statements                      

1. Publication of non-statutory accounts

The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985.

The consolidated balance sheet at 30 June 2006, and the consolidated profit and
loss account, consolidated cash flow statement and associated notes for the
period then ended have been extracted from the Group's financial statements.
Those financial statements have not yet been delivered to the Registrar of
Companies.

2. Earnings/(loss) per share

This has been calculated on profits of £140,563 (2005: loss £297,000) and using
the weighted average number of shares in issue during the year of 24,223,972
(2005: 23,203,808).

3. Dividend

The Directors are not proposing the payment of a dividend in respect of the
year ended 30 June, 2006.

4. Taxation

                                                       2006           2005
                                                                          
                                                      £'000          £'000
                                                                          
United Kingdom Corporation Tax                                            
                                                                          
Current taxation                                       (70)           (80)
                                                                          
Adjustments in respect of prior years                     1           (17)
                                                                          
                                                       (69)           (97)
                                                                          
Tax on loss on ordinary activities                     (69)           (97)
                                                                          
                                                       2006           2005
                                                                          
                                                      £'000          £'000
                                                                          
Profit/(loss) on ordinary activities before              72          (394)
taxation                                                                  
                                                                          
Theoretical tax at UK corporation tax rate               21          (117)
30 per cent.                                                              
                                                                          
Effects of:                                                               
                                                                          
- losses brought forward                               (93)           (26)
                                                                          
- joint ventures' losses unrelieved                     (6)              8
                                                                          
- R&D tax credit adjustments                             15             27
                                                                          
- other expenditure that is not tax                       2              4
deductible                                                                
                                                                          
- adjustments in respect of prior years                  12           (17)
                                                                          
- accelerated capital allowances                        (3)             24
                                                                          
- short term timing differences                        (32)              -
                                                                          
Actual current taxation charge                         (69)           (97)
                                                                          

5. Report and Accounts

Copies of the Report and Accounts will be sent to shareholders in due course
and will be available from the Company's registered office.

Further Enquiries:

PipeHawk Plc                                                                   
                                                                              
Gordon Watt, Chairman                                         Tel: [phone]
                                                                               
John East & Partners Limited                                                   
                                                                               
Simon Clements                                               Tel: [phone]
                                                                               
J M Finn                                                                       
                                                                               
Sam Smith/Charles Cunningham                                 Tel: [phone]