Interim Results

PipeHawk PLC 11 February 2004 PIPEHAWK PLC INTERIM REPORT Six months ended 31 December 2003 CHAIRMAN'S STATEMENT The half-year results for the six months ended 31st December, 2003 include the first signs of the cost savings which I referred to in my statement which accompanied the results for the year ended 30th June, 2003. I am pleased to report that real progress has been made by the Company towards becoming a focused Ground Penetrating Radar ('GPR') technology based service provider. The loss for the six months ended 31st December, 2003 of £291,000 compared with the corresponding period in the previous year has reduced by almost 50% (Loss: £536,000 - six months ended 31st December, 2002). This is particularly encouraging given the background work undertaken by our technology division in preparation for the next phases of each of the NEGAS contracts to produce a hand held pipe locator and the land mine detection vehicle; both of which continue to look positive. Adien, the Group's high level mapping and planning service, has performed well and continues to see healthy levels of enquiries. Orders have been placed for two new Adien complete vehicle systems, which are expected to produce revenue in March. Adien has received much praise for the major works it undertook on behalf of Edinburgh City Council - the benefits of a GPR service in terms of health and safety, traffic management, the environment, speed and reliability are increasingly being understood and specified by our clients. SUMO, the Group's 50% owned instant markout franchise service, remains on track and is planning a significant marketing and franchisee roll out to highlight and implement the benefits of our technology. Contemporaneously with this announcement the Company is completing a small placing to raise approximately £500,000 (net of expenses) to strengthen the Company's balance sheet and to provide additional working capital to accelerate our growth plans. The effect of this has been reflected as a separate pro forma column in the attached accounts. Gordon Watt Chairman 11 February 2004 SUMMARISED CONSOLIDATED PROFIT AND LOSS ACCOUNT for the six months ended 31 December 2003 Note 6 months to 31 6 months to 31 12 months to December 2003 December 2002 Unaudited Unaudited 30 June 2003 Audited £000 £000 £000 Turnover - 571 507 1,061 continuing operations Operating costs -822 -988 -1,892 ----------------- ------------------ ----------------- Operating loss -251 -481 -831 Share of operating loss in joint venture -23 -26 -64 ----------------- ----------------- ----------------- Total operating -274 -507 -895 loss Amount written 0 0 -230 off investments ----------------- ----------------- ----------------- Loss on ordinary activities before interest and taxation -274 -507 -1,125 Group interest receivable and similar income 0 0 1 Group interest payable and similar charges -17 -29 -50 ----------------- ------------------ ----------------- Loss on ordinary activities before taxation -291 -536 -1,174 Tax on profit on 2 0 0 0 ordinary activities ----------------- ------------------ ----------------- Retained loss for -291 -536 -1,174 the period ================= ================== ================= No interim dividend will be paid p p p Loss per share Basic and diluted 3 -1.4 -3.3 -6.5 SUMMARISED CONSOLIDATED CASH FLOW STATEMENT for the six months ended 31 December 2003 Note 6 months to 31 6 months to 31 12 months to 30 December 2003 December 2002 June 2003 Unaudited Unaudited Audited £000 £000 £000 Net cash outflow from operating activities 4, 5 -42 -283 -51 Returns on investment and servicing of finance -18 -14 -41 Capital expenditure and financial investment Receipts from sales 0 27 0 of tangible fixed assets Payments for fixed -56 -17 -54 assets Investment in joint -33 -78 -76 venture Investment in 0 -23 -78 subsidiary ----------------- ----------------- ---------------- Cash outflow before use of liquid resources and financing -149 -388 -300 Financing New loans 0 53 324 Repayment of -29 -69 -448 loans Capital elements of -23 -56 -83 finance payments Issue of ordinary 150 408 408 shares less expenses ----------------- ----------------- ---------------- Increase/(decrease) -51 -52 -99 in cash ================= ================= ================ SUMMARISED CONSOLIDATED BALANCE SHEET at 31 December 2003 Note Pro forma 31 31 December 31 December 30 June 2003 December 2003 2003 2002 (Note 1) Unaudited Unaudited Audited £000 £000 £000 £000 Fixed assets Intangible 262 262 429 269 assets Tangible 345 345 399 362 assets Investment in 35 35 23 25 joint venture ---------------- ---------------- ---------------- --------------- 642 642 851 656 ---------------- ---------------- ---------------- --------------- Current assets Stocks 282 282 440 340 Debtors 421 421 466 280 Investments 0 0 0 99 Cash at bank 303 0 56 0 and in hand ---------------- ---------------- ---------------- --------------- 1,006 703 962 719 Creditors: Amounts falling due within one year -745 -956 -1,225 -804 ---------------- ---------------- ---------------- --------------- Net current 261 -253 -263 -85 assets/ (liabilities) ---------------- ---------------- ---------------- --------------- Total assets less current liabilities 903 389 588 571 Creditors: Amounts falling due after one year -361 -361 -110 -402 ---------------- ---------------- ---------------- --------------- Net assets 542 28 478 169 ================ ================ ================ =============== Capital and reserves Called up 232 210 179 202 share capital Share premium 4,063 3,571 3,122 3,429 account Capital 0 0 921 0 reserves Profit and -3,753 -3,753 -3,744 -3,462 loss account ---------------- ---------------- ---------------- --------------- Equity 6 542 28 478 169 shareholders' funds ================ ================ ================ =============== NOTES TO THE FINANCIAL STATEMENTS for the 6 months ended 31 December 2003 1. Basis of accounting The consolidated interim financial statements have been prepared on the basis of the accounting policies set out in the Group's 2003 financial statements. The interim financial statements are unaudited and do not constitute full financial information as defined in section 240 of the companies Act 1985 (as amended). The comparative figures for the year ended 30 June 2003 and the six months ended 31 December 2002 do not comprise full financial statements. The pro forma balance sheet has been prepared to illustrate the impact of the funds raised on 12 February 2004. It is based on the placing of 2,156,863 ordinary shares of 1p each at 25.5p per share in cash to raise £500,000 net of expenses, estimated at £50,000, and the conversion of £14,500 of creditors into equity, also at 25.5p per share. No account has been taken of the trading results or any other transactions entered into by the Group since 31 December 2003. 2. Taxation No corporation tax was payable in either period as a result of losses arising. 3. Loss per share 6 months to 31 6 months to 31 12 months to 30 December 2003 December 2002 June 2003 Unaudited Unaudited Audited These have been 290,908 529,000 1,174,000 calculated on losses of: The weighted average 20,415,354 16,076,395 17,960,868 number of shares was: Basic and diluted -1.4p -3.3p -6.5p 4. Reconciliation of operating loss to net cash outflow from operating activities 6 months to 31 6 months to 31 12 months to 30 December 2003 December 2002 June 2003 Unaudited Unaudited Audited £000 £000 £000 Operating loss -251 -481 -831 Depreciation and 80 111 136 amortisation Loss on sale of fixed 0 0 43 assets Liquidation of 0 0 99 subsidiary Realisations from 99 0 0 investments Movement in stocks 58 -34 70 Movement in debtors -141 68 311 Movement in 111 53 121 creditors ----------------- ----------------- ------------------ Net cash outflow from -42 -283 -51 operations ================= ================= ================== 5. Reconciliation of net cash flow to movement of net debt 6 months to 31 6 months to 31 12 months to 30 December 2003 December 2002 June 2003 Unaudited Unaudited Audited £000 £000 £000 Change in cash -51 -52 -100 Cash inflow from increase in debt and lease finance 52 72 207 Debt taken over on 0 -227 -262 acquisition Shares issued in 0 146 153 repayment of debt ----------------- ----------------- ------------------ Net increase in debt 1 -61 -2 Opening net debt -622 -620 -620 ----------------- ----------------- ------------------ Closing net debt -621 -334 -622 ================= ================= ================== 6. Reconciliation of movement in shareholders' funds 6 months to 31 6 months to 31 12 months to 30 December 2003 December 2002 June 2003 Unaudited Unaudited Audited £000 £000 £000 Loss for the period -291 -536 -1,174 Net proceeds of shares 150 762 1,091 issued ----------------- ----------------- ------------------ Increase / (decrease) in -141 -226 -83 shareholders' funds Opening shareholders' 169 252 252 funds ----------------- ----------------- ------------------ Closing shareholders' 28 478 169 funds ================= ================= ================= This information is provided by RNS The company news service from the London Stock Exchange

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