Preliminary Announcement

PipeHawk PLC
1 October 2001


                                  PIPEHAWK PLC
                             PRELIMINARY STATEMENT


                            Year ended 30 June 2001



CHAIRMAN'S STATEMENT

Introduction

The Company's shares were admitted to trading on the Alternative Investment
Market on 5th December 2000. The figures in this Report and Accounts,
therefore, reflect costs involved in the transition from a private primarily R
&D based business to what is, now, a focused plc with a clear commercial
strategy in place. The year to 30 June 2001 was one of rapid development both
technically and commercially and has established the foundations for future
growth. This has required considerable investment, which is now complete.

Product Division

During the year we finalised the development of a new precision radar board.
This is enabling enhanced levels of radar performance and accuracy not
previously possible to be achieved.



This new radar will be the 'engine' for many new products, which we plan to
introduce. Its performance will enable our core Ground Penetrating Radar (GPR)
technology to be utilised across a wider range of applications and products.
Initially two new models of PipeHawk will be introduced in the current year.



One will measure the thickness of asphalt in roads and pathways, an
application for which there is a substantial world market.  This model will be
introduced in early 2002, with the official launch at the Construction
Industry Quality Awards event, to be held in March 2002.



The other model will enable surfaces to be marked out prior to excavation work
being undertaken. It is being introduced during October 2001 and will
initially be exclusive to a newly formed franchise company, SUMO Ltd. This is
a joint venture equally owned by PipeHawk and an established franchise company
and a leading UK radar surveying company.



Initial reaction from both customers for the new service and potential
franchisees has been excellent.  The number of UK franchisees is planned to
grow to in excess of 100 outlets, with each franchisee purchasing the new SUMO
model from PipeHawk.


Technology Division

Our objective for the technology division is to form technology exploitation
partnerships with major product manufacturing and marketing companies.



The recently signed new NYGAS contract is the first such agreement and is a
major achievement for the company. This is intended to lead to a new
generation of low cost hand held GPR products.



Subject to agreed milestones being met, there are planned to be a series of
extensions to the contract.  The total value of all phases of the contract
would be US$ 2.3 million; the initial phase being US$870,000. A major US
corporation has given a letter of intent regarding their involvement as the
world wide marketing partner in the project.



Work on the LOTUS Humanitarian Mine Detection programme continues.  The
commercial exploitation of this development work is expected to be discussed
within the European Commission early in 2002.  Following this, external
funding from governmental, charitable and commercial partners will be sought
to complement continuing Commission funding.



The results for the year to 30 June 2001 were adversely affected by the later
than expected award of both the LOTUS and NYGAS contracts. However with the
NYGAS and LOTUS contracts now under way, we have a full loading of external
development work for the next 12 months.

Board Change

Hugh Meares has provided great assistance to the Company, particularly with
its move to AIM but due to increasing pressure from his other commitments he
is unable to devote the time necessary to the company during its next phase of
development.  Hugh will leave the Board and Gordon Watt FCA will assume the
role of Financial Director.  Steps will be taken to recruit a replacement
Non-Executive Director with a construction industry related background.

Outlook

It is too early to know what impact the recent tragic events in New York may
have on our overseas markets but we believe that while performance will be
substantially weighted towards the second half, UK generated sales will allow
the company to make major progress in the current year.





DA Mahony
Chairman


SUMMARISED CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ending  30 June 2001


                                                Year ended     18 months
                                                                      to
                                                   30 June       30 June
                                              Note    2001          2000
                                                     £'000         £'000

Group turnover    - continuing operations              652           645
                  - discontinued operations            -             238

                                                   4   652           883


Total operating loss - continuing operations          (955)         (936)
                     - discontinued operations         -             128

                                                      (955)         (808)

Interest payable less interest receivable              (17)          10

Loss on ordinary activities before taxation           (972)         (798)
Tax on profit on ordinary activities               2   -             -

Loss on ordinary activities after taxation            (972)         (798)

Loss for financial year                               (972)         (798)
Dividends                                              -             -

Retained loss for the year                            (972)         (798)


Loss per share                                     3    p             p
Basic                                                 (8.2)         (12.2)


Diluted                                               (8.2)         (12.2)




SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 June 2001
                                            Year ended      18 months to
                                          30 June 2001      30 June 2000
                                                 £'000             £'000

Net cash outflow from operating activities      (1,281)           (547)
Returns on investment and servicing of finance  (17)              (35)
Taxation paid                                   -                 -
Capital expenditure and financial investment    (324)             (205)
Acquisitions and disposals                      -                 1
Management of liquid resources                  (750)             -
Financing                                       2,487             774

Increase/(decrease) in cash                     115               (12)





SUMMARISED CONSOLIDATED BALANCE SHEET
at 30 June 2001

                                                           2001       2000
                                                          £'000      £'000
Fixed assets
Intangible assets                                           277        219
Tangible assets                                             234        74

                                                            511        293


Current assets
Stocks                                                      265        126
Debtors due within one year                                 558        250
Cash at bank and in hand                                    915        74

                                                            1,738      450
Creditors: Amounts falling due within one year              (596)      (768)

Net current assets                                          1,142      (318)


Total assets less current liabilities                       1,653      (25)

Creditors: Amounts falling due after more than one year     (393)      (200)


Net assets/(liabilities)                                    1,260      (225)

Capital and reserves                                        1,260      (225)



NOTES TO THE PRELIMINARY STATEMENT
30 June 2001

1.  BASIS OF ACCOUNTING

PipeHawk plc was incorporated on 16 May 2000, and no trading activity was
undertaken between that date and 23 October 2000.  On 23 October 2000,
PipeHawk plc acquired 100% of the share capital of Emrad Limited, by way of a
share for share exchange.


The consolidated financial statements have been prepared using merger
accounting.  Under merger accounting the results and cash flows are combined
from the beginning of the financial period and all comparatives are restated
on the combined basis.  These financial statements consolidate the financial
statements of PipeHawk plc and Emrad Limited as though they had been in
existence with its present constitution.


The group has adopted Format 2 profit and loss account, and FRS 19 (Deferred
Taxation). Neither of these changes have had an impact on the loss or net
assets of the group.



2.  TAXATION

There is no corporation tax charge as a result of losses arising in the year.



3.  LOSS PER SHARE

These have been calculated on a loss of £972,000 (2000: loss £798,000).

The weighted average number of shares used was:

                                  2001          2000

Basic                       11,868,407     6,516,296

The calculation of loss per share has been restated to show the loss per share 
in the prior period as if the shares had been split 10 for 1 so as to place the 
earnings on a comparable basis.  Options in issue do not dilute earnings per 
share for the year ended 30 June 2001 and 18 months ended 30 June 2000 because 
there were losses in both periods.



4.  PRELIMINARY STATEMENT

This preliminary statement, which has been agreed with the auditors, was 
approved by the Board on 27th September 2001.  It is not the company's statutory
accounts.  The statutory accounts for the period ended 30 June 2000 have been 
delivered to the Registrar of Companies and received an audit report which was 
unqualified and did not contain statements under s237 (2) or (3) of the 
Companies Act 1985.  The statutory accounts for the year ended 30 June 2001 have
not yet been approved, audited or filed.