Final Results

16 November 2009

                            Pipehawk plc

                    ("Pipehawk" or the "Company")

            Final results for the year ended 30 June 2009

Chairman's Statement
This year has been  another challenging year.   The UK recession  has
affected our  operating subsidiaries  in different  ways;  Adien  and
Sumo have experienced a slow down  in activity whilst QM Systems  has
seen an increase in  orders as companies  seek to automate  processes
previously performed manually.  I am grateful to the commitment  that
both the management and the Group's employees have shown in a  period
of change.

I can  report  the turnover  for  the year  ended  30 June  2009  was
£3,241,000 (2008: £2,411,000) which is an increase of 34 per cent. on
the previous year. The Company achieved a loss after taxation for the
year of £398,000  (2008: loss  £328,000).  This  result reflects  the
cost of restructuring QM  Systems following the  loss of its  largest
customer,  GE  Aviation.  Sales  at  QM  Systems  have  increased  to
£1,349,000 from £574,000 in 2008  but operating losses have  remained
broadly consistent  with the  previous  year as  the Board  took  the
decision to  incur costs  in  the period  under  review in  order  to
reposition this business to take advantage of a changing market.

The Company's GPR services provided by Adien and SUMO have been
affected in the latter half of the year as a direct result of the
slow down in the construction market.  Accordingly, both entities
have reduced employee headcount and, in anticipation of conditions
improving in the construction market, remain well positioned as
leaders in the GPR based surveying field.

Nick Field, who was appointed managing director of QM Systems on 1
September 2008 has had an excellent first year in terms of
re-aligning this business to be able to deal with the requirements of
blue-chip customers.  We have announced several large orders during
the year and QM Systems's order book remains strong with orders in
excess of £500,000 in hand as I write this report.

PipeHawk, which forms the technology division, has developed several
new products through to the prototype stage and beyond.  These
developments have been well received at trade shows and have been
sold into a number of new markets, including Oman.  The Group
continues to contribute to Government sponsored initiatives (VISTA
and Mapping the Underworld programmes), which are programmes focussed
on issues surrounding the mapping and cataloguing of buried utility
services as well as the European GPR trade association.

The trading performances of the Company's four major business areas
are summarised below.

Adien
Adien, PipeHawk's high  definition underground  mapping and  planning
service, had an excellent first half to the year under review but has
since seen market conditions tighten  and has adjusted the cost  base
of its operations accordingly.  Turnover in the period was up 18  per
cent. compared with 2008 but margins have reduced as the industry has
suffered from  excess capacity.   A lack  of funding  has affected  a
large number of infrastructure projects such as those earmarked under
the Government's  Building  Schools  for  the  Future  programme  and
several other initiatives.

In response to the changing market place Adien have introduced a
range of training programmes for their clients.  These courses draw
upon Adien's experience and are strengthening their relationship with
their client base.

Adien's Scottish office, situated in Livingston, has had a good first
year with Adien becoming a preferred supplier to many of the Scottish
arms of UK consulting or construction companies.  Activity in this
office is expected to increase in 2010 as certain infrastructure
projects that were deferred in 2009 come on line..

Despite the slowdown in 2009 Adien remains confident that it will, by
offering a high level of customer service, be able to maintain its
key client relationships such that it will be well placed to service
their needs in the future.

Technology Division
The Technology Division  has continued the  development of its  third
generation of GPR  technology known  as e-Spade. This  was the  first
product  to  incorporate  digital,  modular  technology.   The  Board
believes that the  new technology  provides PipeHawk with  a new  and
highly innovative technology  platform that  will allow  a series  of
other products  to be  rapidly introduced.  The second  product,  the
e-Spect, was launched at  the 'No-Dig' exhibition  in Coventry on  23
September 2008.  This is  a GPR-based  wall and  floor scanner  which
detects features such as voids and reinforced steel in concrete.

In 2009 PipeHawk has launched  the e-Spott which uses GPR  technology
to test the  quality of reinstated  layered surfaces, commonly  roads
and footpaths.  It has been well  received at trade shows and is  now
also offered as a service option by Adien.

QM Systems
The opportunities presented by the current economic conditions are
focused around clients who are seeking to reduce costs in their
businesses through the reduction or removal of  labour resources and
through increased process automation.  In response to this, QM
Systems has restructured and re-skilled the business to expand its
products and services to include complex mechanical developments and
to become a turnkey provider of complete assembly, test and
automation solutions.  This strategic development of QM System's
business has allowed it to move its activities into the automotive
and rail sectors to complement its strong presence in aerospace.

The Directors believe QM Systems is now positioned to capitalise on
its newly acquired skills whilst continuing to grow business in its
core areas of software and electronics development.  It's order book
now stands at its highest level for two years and the order intake
over the last six months has brought in high calibre business
opportunities. QM System's is hopeful of developing long term
relationships with these companies.

The Directors believe QM Systems now has a far more diverse range of
clients and skills than it has had for several years which bodes well
for the future.

SUMO
SUMO has continued  to grow  its turnover during  2009. Turnover  was
£4,382,000 (2008:  £3,030,000) and  its  operating loss  was  £71,000
(2008:  £177,000  profit).   Sumo  is  accounted  for  in  the  group
financial statements as a joint venture.

The majority of the increase in  turnover in the period under  review
is attributable to Team Surveys  Limited which was acquired in  March
2008 and contributed a full year's results in the year ended 30  June
2009.

SUMO's acquisition programme, which is focused on surveying companies
which are  capable of  generating  additional revenue  from  services
which complement SUMO's  core business of  utility mapping, has  been
put on hold, temporarily, during the current economic climate.

Related party transactions
In the period under review, as in previous years, I have undertaken
to provide working capital to the Company. During the year ended 30
June 2009 I advanced loans to the Company of £500,000, in aggregate.
In addition, since 30 June 2009 I have advanced further loans of
£190,000 to the Company and on 8 October 2009 it was announced that I
had agreed to convert £100,000 of these loans into new ordinary
shares following the announcement of these results. A further
announcement, regarding an application to be made by the Company for
the shares arising on conversion of the loans to be admitted to
trading on AIM, will be made in due course. The loans have been made
in accordance with a letter of support dated 11 November 2007. The
letter of support was renewed on 12 November 2009 for a further year.
The loans are unsecured and accrue interest at an annual rate of base
rate plus 2.15 per cent.

The directors, other than myself, consider, having consulted with the
Company's nominated adviser, that the terms of the loans are fair and
reasonable insofar as the Company's shareholders are concerned.

In addition to the loans I have provided to the Company during the
period and in previous years, my fellow directors and I have deferred
a certain proportion of our fees until the Company is in a suitably
strong position to make the full payments.  These deferred fees
amount to approximately £106,000 in the year ended 30 June 2009 and
approximately £383,000 in total, all of which have been accrued in
the Company's accounts.

Strategy & Outlook
As indicated above  it has been  a very difficult  year.   The  Board
considers that the Company's  working capital position is  sufficient
for its immediate requirements as the Company's directors continue to
provide support in the form  of unsecured loans on normal  commercial
terms and through the deferral of fees.


Gordon Watt
Chairman
13 November 2009


FURTHER ENQUIRIES


+-------------------------------------------------------+
| PipeHawk Plc                          | 01420 590 990 |
| Gordon Watt (Chairman)                |               |
|                                       |               |
|---------------------------------------+---------------|
| Merchant John East Securities Limited | 020 7628 2200 |
| David Worlidge                        |               |
| Simon Clements                        |               |
|                                       |               |
+-------------------------------------------------------+



CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2009



                                              Year ended   Year ended
                                            30 June 2009 30 June 2008
                                       Note        £'000        £'000

Revenue                                            3,241        2,411

Staff costs                                      (1,841)      (1,436)
Operating costs                                  (1,900)      (1,391)
Operating loss                                     (500)        (416)

Share of operating (loss)/profit in
joint venture                           4           (17)           66
Loss on ordinary activities before
interest and taxation                              (517)        (350)

Finance costs                                       (87)         (88)

Loss before taxation                               (604)        (438)

Taxation                                2            206          111
Loss for the year attributable to
equity holders of the Company                      (398)        (327)


Loss per share (pence) -  basic         3         (1.48)       (1.21)
Loss per share (pence) -  diluted       3         (0.92)       (0.95)



CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2009



Assets                        Note 30 June 2009 30 June 2008
                                          £'000        £'000

Non-current assets
Property, plant and equipment               143          231
Goodwill                                  1,061        1,061
Intangible assets                         1,426        1,025
Investment in joint venture    4            135          152
                                          2,765        2,469

Current assets
Inventories                                 299          268
Current tax assets                          156          106
Trade and other receivables                 674          742
                                          1,129        1,116


Total Assets                              3,894        3,585

Equity and liabilities

Equity
Share capital                               269          269
Share premium                             4,842        4,842
Other reserves                          (4,951)      (4,553)
                                            160          558


Non current liabilities
Borrowings                                  517          705
                                            517          705
Current liabilities
Trade and other payables                  2,744        1,959
Bank overdrafts                             473          363
                                          3,217        2,322


Total equity and liabilities              3,894        3,585



CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2009


                                         Note Year ended   Year ended
                                                 30 June 30 June 2008
                                                    2009        £'000
                                                   £'000

Cash flows from operating activities
Lossfrom operations                                (500)        (416)

Adjustments for:
Depreciation                                         104          134
Amortisation of intangibles                           34            -
Profit on sale of fixed assets                      (23)            -
                                                   (385)        (282)

(Increase)/Decrease in inventories                  (31)           11
Decrease/(Increase) in receivables                    18        (107)
Increase in liabilities                              332          265

Cash used in operations                   5         (66)        (113)

Interest paid                                       (87)         (88)
Corporation tax received                             206          111

Net cash generated from/(used in)
            operating activities                      53         (90)

Cash flows from investing activities

Development costs paid                             (435)        (587)
Purchase of plant and equipment                     (58)         (78)
Sale of plant and equipment                           65            -

Net cash used in investing activities              (428)        (665)

Cash flows from financing activities

New loans and finance leases                         521          540
Repayment of bank loan                             (209)         (40)
Repayment of finance leases                         (47)         (75)

Net cash generated from financing
activities                                           265          425

Net decrease in cash and cash
equivalents                                        (110)        (330)

Cash and cash equivalents at beginning
of period                                          (363)         (33)

Cash and cash equivalents at end of
period                                             (473)        (363)



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30
JUNE 2009


             Share   Share    Retained   Other   Share options  Total
            capital premium   earnings  reserves    reserve
                    account
             £'000   £'000     £'000     £'000       £'000      £'000

As at 1         269    4,842    (4,553)        -              -   558
July 2008
Loss for          -        -      (398)        -              - (398)
the period

As at 30        269    4,842    (4,951)        -              -   160
June 2009

As at 1 July        269     4,842    (4,226)   -              -   885
2007
Loss for the          -         -      (327)   -              - (327)
period

As at 30 June       269     4,842    (4,553)   -              -   558
2008



NOTES TO THE PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2009

1.         BASIS OF PREPARATION

These financial statements have been prepared in accordance with
International Financial Reporting Standards, International Accounting
Standards and Interpretations (collectively IFRS) issued by the
International Accounting Standards Board (IASB) as adopted by
European Union ("adopted IFRSs"), and are in accordance with IFRS as
issued by the IASB.

The financial information set out above does not constitute the
Company's statutory accounts for the years ended 30 June 2008 and
2009, but is derived from those accounts. Statutory accounts for 2008
have been delivered to the Registrar of Companies and those for 2009
will be delivered following the Company's Annual General Meeting. The
Auditors have reported on those accounts; their reports were
unqualified and did not contain statements under the Companies Act
1985, sections 237(2) or (3).

2.         TAXATION


                                      2009  2008
                                      £'000 £'000
United Kingdom Corporation Tax
Current taxation                      (178) (110)
Adjustments in respect of prior years (28)  (1)

                                      (206) (111)
Deferred taxation                     -     -

Tax on loss on ordinary activities    (206) (111)



Current tax reconciliation                     2009  2008
                                               £'000 £'000

Loss on ordinary activities before taxation    (604) (438)

Theoretical tax at UK corporation tax rate 28%
            (2008: 29.5%)                      (169) (129)
Effects of:
- rate change                                  -     2
- timing differences - trade intangibles       -     (164)
- R&D tax credit adjustments                   10    (7)
- other expenditure that is not tax deductible 3     (20)
- adjustments in respect of prior years        (28)  (1)
- accelerated capital allowances               (115) 62
- losses carried forward                       58    132
- short term timing differences                35    14

Actual current taxation charge                 (206) (111)


The Group has tax losses amounting to approximately £1,069,000 (2008:
£1,349,000), available for carry forward to set off against future
trading profits.

3.         LOSS PER SHARE

Group
This has been calculated on a loss of £398,000 (2008: loss £327,000)
and the number of shares used was 26,937,181 (2008: 26,937,181 being
the weighted average number of share in issue during the year.  For
the fully diluted calculations the number of shares used for the
calculation was 43,001,176 (2008: 32,563,878).

A reconciliation between shares used for calculating basic earnings
per share and diluted earnings per share follows;


                                                          2009   2008
                                                           No.    No.
Weighted average number of ordinary shares in issue
(thousands)                                             26,937 26,937
Adjustments for
            - Share options (thousands)                  1,823  1,297
            - Warrants (thousands)                      14,241  6,121
Weighted average number of ordinary shares for diluted
earnings per share (thousands)                          43,001 34,355



4.         INVESTMENT IN JOINT VENTURE


Group                         Investment in shares
                                             £'000
Cost:
At 1 July 2008 & 30 June 2009                  198

Share of profit/losses
At 1 July 2008                                (46)
Share of losses for the year                  (17)

At 30 June 2009                               (63)

Net investment
At 30 June 2009                                135

At 30 June 2008                                152


The investment in joint venture relates to a 30.3% shareholding in
the ordinary share capital of SUMO Limited. SUMO Limited is engaged
in the development of a GPR franchise operation and has a year end of
31 December.  For the purpose of preparing this consolidation,
financial information has been prepared for the year ended 30 June
2009.  SUMO Limited's principal place of business is Havant,
Hampshire.
Summarised financial information in respect of the Group's joint
venture is set out below:


                                                                    Year     Year
                                                                   ended    ended
                                                                30/06/09 30/06/08
                                                                   £'000    £'000
Total assets                                                       2,350    1,946
Total liabilities                                                  1,906    1,443
Net assets                                                           444      503
Group's share of net assets of joint venture                         135      152

                                                                    Year     Year
                                                                   ended    ended
                                                                 30/6/09  30/6/08
Total revenue                                                      4,382    2,814

Total profit for the period                                         (56)      220
Group's share of profits of joint venture                           (17)       66


5.            RECONCILLIATION OF OPERATING LOSS TO NET CASH OUTFLOW
FROM    OPERATING ACTIVITIES


                                           2009  2008
                                           £'000 £'000

Operating (loss)                           (500) (416)
Amortisation of intangible assets          34    -
Depreciation of tangible fixed assets      104   134
Profit on sale of fixed assets             (23)
Working capital movements
     Inventories                           (31)  11
     Receivables                           18    (107)
     Payables                              332   265

Net cash outflow from operating activities (66)  (113)



6.         CONTINGENCIES

At the year end, the group has an outstanding legal action against GE
Aviation with regard to intellectual property rights.

7.         DIVIDEND

The directors do not recommend the payment of a dividend for the year
(2008: £nil).

8.         COPIES OF THE REPORT & ACCOUNTS

Copies of  the Report  and Accounts  will be  posted to  shareholders
shortly, and will be  available from the Company's registered office,
Systems House, Mill  Lane, Alton,  Hampshire GU34 2QG   and from  the
Company's website www.pipehawk.com.

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