Half-yearly Report
6 March 2013
PipeHawk plc
("PipeHawk" or the "Company")
Half-yearly results for the six months ended 31 December 2012
Chairman's Statement
I am pleased to report that the Company's turnover in the six months ended 31
December 2012 was £1,984,000, an increase on turnover for the corresponding
period last year of 24.9 per cent. (2011: £1,589,000), resulting in a profit
before taxation of £83,000 (2011: loss of £213,000.)
In the period under review PipeHawk continued to develop new Ground Probing
Radar (GPR) products and as a consequence has, in the six months ended 31
December 2012, capitalised approximately £103,000 of research and development
expenditure. We have continued at pace with the development of the e-Safe.
During the period PipeHawk secured a grant from the Technology Strategy Board
to support the continuance of the development of the e-Safe product. Marketing
activity has identified a number of low cost GPR based products that the e-Safe
platform will support. The first phase of the e-Safe product launch is set to
take place in the second half of this financial year. In addition, PipeHawk has
launched a project to develop the core GPR software to be platform independent.
This will enable PipeHawk's market leading software to be readily portable
across product platforms, gain competitive advantage through re-use and provide
the ability to readily integrate other third party survey tools.
During the period QM Systems ("QM") has significantly increased its business in
the fields of automation, test and assembly. QM has entered a new and exciting
phase in its development following significant contract wins during the first
half of the financial year. Revenue at QM has increased by 29 per cent.
compared to the same period last year and in the first half QM achieved a
profit of £125,000. QM provides its clients with a true turnkey solution for
complete production systems consisting of assembly, test and build management
solutions. All projects are designed and manufactured in house at QM's
Worcester and Aldershot facilities. QM is entering a phase of rapid growth and
in order to deliver the projects currently on the order book and under
discussion, QM have recruited 12 new engineers across the business. In
addition, further resource has been recruited to expand the sales team and
purchasing functions. QM's business continues to go from strength to strength
with major contracts secured with new and existing clients. Furthermore, QM has
demonstrated that it is now geared to handle large scale infrastructure
projects and has secured key complete production system projects with major
blue chip companies like Kingspan and Caterpillar.
During the six month period under review Adien has remained profitable and
continues to concentrate on working with major infrastructure providers. The
construction and contracting sectors remain difficult but Adien's order take
during the period was the strongest it has been for 5 years and is 16% up on
the comparable period last year. Adien remains confident that it will enjoy
good trading in the second half of this financial year.
SUMO, in which the Group holds a 29.6% stake, has successfully integrated the
2010 acquisition of Stratascan into the Group. Stratascan enjoyed a good deal
of positive PR from carrying out the survey of the Leicester car park where
Richard III's body was found. During the six months SUMO also acquired the
business of GSB Prospection Limited, another geophysical survey company similar
to Stratascan and well known for its involvement in Channel 4's Time Team
programme.
Related party transactions
During the six months ended 31 December 2012, my fellow directors and I have
deferred a certain proportion of our salaries, fees and interest until the
Company is in a suitably strong position to make the full payments. These
deferred amounts total approximately £127,000 in the period and approximately £
749,000 in total, all of which have been accrued in the Company's accounts.
Gordon Watt
Chairman
Enquiries:
PipeHawk Plc Tel. No. 01252 338 959
Gordon Watt (Chairman)
MerchantSecurities Limited Tel. No. 020 7628 2200
(Nomad and Broker)
David Worlidge/Simon Clements
Statement of Comprehensive Income
For the six months ended 31 December 2012
6 months ended 6 months ended Year ended
31 December 31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Revenue 1,984 1,589 3,342
Staff costs (950) (910) (1779)
General administrative expenses (865) (775) (1,458)
Operating profit / (loss) 169 (96) 105
Share of operating profit / (loss) - (30) (17)
in joint venture
Profit/(Loss)on ordinary activities 169 (126) 88
before interest and taxation
Finance costs (86) (87) (158)
Profit/(Loss) before taxation 83 (213) (70)
Taxation 34 42 98
Profit/(Loss)for the period 117 (171) 28
attributable to equity holders of
the Company
Other comprehensive income - - -
Total comprehensive income / (Loss) 117 (171) 28
for the period net of tax
Profit/(Loss)per share (pence) - 0.36 (0.51) 0.09
basic
Profit/(Loss) per share (pence) - 0.24 (0.51) 0.06
diluted
Consolidated Statement of Financial Position
As at 31 December 2012
Assets As at As at As at
31 December 31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 228 193 196
Goodwill 1,061 1,061 1,061
Intangible assets 2,451 2,237 2,348
Investment in joint venture 93 80 93
3,833 3,571 3,698
Current assets
Inventories 30 94 149
Current tax assets 16 35 104
Trade and other receivables 1,278 1,284 835
Cash 741 124 189
2,065 1,537 1,277
Total Assets 5,898 5,108 4,975
Equity and liabilities
Equity
Share capital 330 330 330
Share premium 5,151 5,151 5,151
Other reserves (5,408) (5,724) (5,525)
73 (243) (44)
Non-current liabilities
Borrowings 2,673 2,747 2,719
Trade and other payable 1,520 1,298 1,309
4,193 4,045 4,123
Current liabilities
Trade and other payables 1,596 1,293 779
Bank overdrafts and loans 36 13 117
1,632 1,306 896
Total equity and liabilities
5,898 5,108 4,975
Consolidated Statement of Cash Flow
For the six months ended 31 December 2012
6 months ended 6 months ended Year ended
31 December 31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash inflow from operating
activities
Profit /(Loss) from operations 169 (96) 105
Adjustments for:
Impairment of intangible assets - - 5
Depreciation 47 34 73
216 (62) 183
Decrease in inventories 119 103 48
(Increase)/Decrease in receivables (425) (304) 131
Increase in liabilities 943 391 26
Cash generated in operations 853 128 388
Interest paid (86) (87) (6)
Corporation tax received 104 77 78
Net cashgenerated fromoperating 871 118 460
activities
Cash flows from investing
activities
Development costs paid (103) (114) (230)
Purchase of plant and equipment (80) (86) (128)
Sale of plant and equipment 1 - -
Net cash used in investing (182) (82) (358)
activities
Cash flows from financing
activities
New loans and finance leases 48 91 118
Repayment of bank and other loans (171) - (125)
Repayment of finance leases (14) (10) (18)
Net cash generated from financing (137) 81 (25)
activities
Increase /(Decrease) in cash and 552 (1) 77
cash equivalents
Cash and cash equivalents at 189 112 112
beginning of period
Cash and cash equivalents at end 741 111 189
of period
Consolidated Statement of changes in equity
For the six months ended 31 December 2012
Share Share Retained Total
capital premium earnings
account
£'000 £'000 £'000 £'000
6 months ended 31 December 2011
As at 1 July 2011 330 5,151 (5,553) (72)
Loss for the period - - (171) (171)
As at 31 December 2011 330 5,151 (5,724) (243)
12 months ended 30 June 2012
As at 1 July 2011 330 5,151 (5,553) (72)
Profit for the period - - 28 28
As at 30 June 2012 330 5,151 (5,525) (44)
6 months ended 31 December 2012
As at 1 July 2012 330 5,151 (5,553) (44)
Profit for the period - - 117 117
As at 31 December 2012 330 5,151 (5,408) 73
Notes to the Interim Results
1. Basis of preparation
The Interim Results for the six months ended 31 December 2012 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 2012, 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.
Gordon Watt has confirmed that he will not recall loans payable to him, within
the next 12 months. Therefore non-current liabilities at 31 December 2011 and
30 June 2012 have been restated to include amounts owing to Gordon Watt which
were previously shown in current liabilities.
2. Segmental information
The Group operates in one geographical location being the UK. Accordingly the
primary 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 2012
Total segmental revenue 906 72 1,006 1,984
Segmental result 128 (76) 117 169
Finance costs (4) (82) - (86)
Share of operating profit 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
Additions to non-current assets 57 - 23 80
6 months ended 31 December 2011
Total segmental revenue 674 122 793 1,589
Segmental result (49) (32) (15) (96)
Finance costs (10) (77) (15) (87)
Share of operating loss in joint (30)
venture
Loss before taxation (213)
Segment assets 779 2,913 1,416 5,108
Segment liabilities 876 3,048 1,427 5,351
Depreciation and amortisation 24 - 10 34
Additions to non-current assets 19 - 69 88
12 months ended 30 June 2012
Total segmental revenue 1,524 221 1,597 3,342
Segmental result 76 (7) 36 105
Finance costs (6) (152) - (158)
Share of operating loss in joint (17)
venture
Loss before taxation (70)
Segment assets 1,020 2,837 1,118 4,975
Segment liabilities 987 2,428 1,048 4,463
Depreciation and amortisation 49 2 33 84
Additions to non-current assets 59 - 69 128
3. Profit/(Loss)per share
This has been calculated on the profit for the period of £117,000 (2011: loss £
171,000) and the number of shares used was 33,020,515 (2011: 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 2012.
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.
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