Half-yearly Report
26 March 2014
PipeHawk plc
("PipeHawk" or the "Company")
Half-yearly results for the six months ended 31 December 2014
Chairman's Statement
I am pleased to report that the Company's turnover in the six months ended 31
December 2014 was £2,583,000 (2013: £2,609,000), resulting in a loss before
taxation of £142,000 (2013: loss of £244,000) and a profit after taxation of £
50,000 (2013: loss of £190,000).
During the period, the order intake at QM Systems has been strong. We enter the
second half of our financial year with a healthy order book and a substantial
sales pipeline. We have continued our recruitment drive with the addition of
manufacturing and system controls engineers to the team. This has enabled us to
remove the majority of externally contracted resources employed during the
previous financial year. Our business has expanded into additional industrial
sectors, including Packaging and Food & Beverage, bringing with it a whole host
of new opportunities. QM Systems continues to employ an attitude of "customer
first", as demonstrated by our ability to retain and grow client relationships.
As reported in our previous statement for the year ended 30 June 2014, our
management team has been significantly strengthened with key personnel in the
roles of manufacturing, purchasing, project management and controls
engineering. We are now seeing the significant rewards within our business
created through the work undertaken in the last financial year. During the
period we have completed the redevelopment of our factory space and we have
added an in house machining capability to enable us to react far more quickly
to short term customer requirements. The company is now in a strong position to
continue expansion at the significant rate that we expect.
At PipeHawk we have continued to develop our new range of GPR products. We have
continued to see significant interest in the e-Safe and e-Spade Lite range of
product, with new distributors signed and potential distributors showing
interest. Initial feedback from the markets is very positive. We currently
await the outcome of our grant application to the Horizon 2020 European funding
stream, due in spring 2015. A successful grant application will assist us in
obtaining additional funding to `fast track' expansion into new markets and
address new product applications. Whilst we await the outcome of this
application we continue with the development of the e-Spade Lite platform of
products together with investment in our marketing and distribution partners.
Adien has traded in very competitive market conditions. A key project that was
programmed to commence in the last quarter of 2014 was postponed until 2015
which had a negative impact on these results but provides a good start to
calendar year 2015.
SUMO, in which the Group holds a 28.4% stake, continues to consolidate its
recent acquisitions in the geophysical survey market and traded at a small
profit.
Related party transactions
In the period under review, I was not called upon to provide working capital
support to the Company.
My letter of support was renewed on 29 October 2014 for a further year. Loans,
other than those covered by the CULS agreement, are unsecured and accrue
interest at an annual rate of Bank of England base rate plus 2.15 per cent.
In addition to the loans I have provided to the Company in previous years, my
fellow directors and I have deferred a certain proportion of our fees and
interest payments until the Company is in a suitably strong position to make
the full payments. At 31 December 2014, these deferred fees and interest
payments amounted to approximately £1,042,000 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)
Sanlam Securities UK Limited (Nomad and Broker) Tel. No. 020 7628 2200
David Worlidge/James Thomas
Statement of Comprehensive Income
For the six months ended 31 December 2014
6 months ended 6 months ended Year ended 30
31 December 31 December June
2014 2013 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Revenue 2,583 2,609 5,111
Staff costs (1,257) (1,191) (2,416)
General administrative expenses (1,417) (1,586) (3,196)
Operating loss (89) (169) (501)
Share of operating profit in joint 22 1 28
venture
Losson ordinary activities before (67) (168) (473)
interest and taxation
Finance costs (75) (76) (149)
Lossbefore taxation (142) (244) (622)
Taxation 192 54 99
(Profit/(loss) for the period 50 (190) (523)
attributable to equity holders of
the Company
Other comprehensive income - - -
Total comprehensive income/(loss) 50 (190) (523)
for the period net of tax
Earnings/(Loss)per share (pence) - 0.14 (0.57) (1.55)
basic
Earnings/(Loss)per share (pence) - 0.07 (0.57) (1.55)
diluted
Consolidated Statement of Financial Position
As at 31 December 2014
Assets As at As at As at
31 December 31 December 30 June
2014 2013 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 289 196 240
Goodwill 1,061 1,061 1,061
Investment in joint venture 108 58 86
1,458 1,315 1.387
Current assets
Inventories 80 115 110
Current tax assets 257 38 65
Trade and other receivables 1,431 1,323 1,085
Cash 61 365 120
1,829 1,841 1,380
Total Assets 3,287 3,156 2,767
Equity and liabilities
Equity
Share capital 330 330 330
Share premium 5,151 5,151 5,151
Other reserves (7,930) (7,647) (7,980)
(2,449) (2,166) (2,499)
Non-current liabilities
Borrowings 2,327 2,458 2,414
Trade and other payable 1,477 1,584 1,683
3,804 4,042 4,097
Current liabilities
Trade and other payables 1,883 1,261 1,142
Bank overdrafts and loans 49 19 27
1,932 1,280 1,169
Total equity and liabilities
3,287 3,156 2,767
Consolidated Statement of Cash Flow
For the six months ended 31 December 2014
6 months ended 6 months ended Year ended 30
31 December 31 December June
2014 2013 2014
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash inflow from operating
activities
Loss from operations (89) (168) (501)
Adjustments for:
Depreciation 60 45 98
(29) (123) (403)
Decrease in inventories 30 163 -
(Increase)/Decrease in receivables (346) 76 332
Increase/(Decrease) in liabilities 532 (9) -
Cash generated/(used) in 187 107 (71)
operations
Interest paid (75) (76) (9)
Corporation tax received - 54 54
Net cashgenerated fromoperating 112 85 26
activities
Cash flows from investing
activities
Purchase of plant and equipment (109) (37) (133)
Net cash generated from /(used) in 3 48 (133)
investing activities
Cash flows from financing
activities
New loans and finance leases 47 - 23
Repayment of bank and other loans (88) (51) (100)
Repayment of finance leases (21) (15) (27)
Net cash generated from financing (62) (66) (104)
activities
Decreasein cash and cash (59) (18) (263)
equivalents
Cash and cash equivalents at 120 383 383
beginning of period
Cash and cash equivalents at end 61 365 120
of period
Consolidated Statement of changes in equity
For the six months ended 31 December 2014
Share Share Retained Total
capital premium earnings
account
£'000 £'000 £'000 £'000
6 months ended 31 December 2013
As 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)
12 months ended 30 June 2014
As at 1 July 2013 330 5,151 (7,457) (1,976)
Loss for the period - - (523) (523)
As at 30 June 2014 330 5,151 (7,980) (2,499)
6 months ended 31 December 2014
As at 1 July 2014 330 5,151 (7,980) (2,499)
Profit for the period - - 50 50
As at 31 December 2014 330 5,151 (7,930) (2,449)
Notes to the Interim Results
1. Basis of preparation
The Interim Results for the six months ended 31 December 2014 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 2014, 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.
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 2014
Total segmental revenue 617 125 1,841 2,583
Segmental result (75) (123) 109 (89)
Finance costs (4) (71) - (75)
Share of operating profit in 22
joint venture
Loss before taxation (142)
Segment assets 1,037 427 1,823 3,287
Segment liabilities 792 3,791 1,153 5,736
Depreciation and amortization 40 - 20 60
6 months ended 31 December 2013
Total segmental revenue 748 85 1,776 2,609
Segmental result 34 (140) (63) (169)
Finance costs (3) (73) - (76)
Share of operating loss in joint 1
venture
Loss before taxation (244)
Segment assets 1,145 424 1,587 3,156
Segment liabilities 816 3,362 1,141 5,322
Depreciation and amortization 29 - 16 45
12 months ended 30 June 2014
Total segmental revenue 1,466 211 3,434 5,111
Segmental result 33 (468) (66) (501)
Finance costs (5) (143) (1) (149)
Share of operating profit in 28
joint venture
Loss before taxation (622)
Segment assets 1,025 185 1,557 2,767
Segment liabilities 700 3,481 1,085 5,266
Depreciation and amortisation 63 - 35 98
3. Earnings/(Loss)per share
This has been calculated on the profit for the period of £50,000 (2013: loss £
190,000) and the number of shares used was 33,020,515 (2014: 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 2014.
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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