Preliminary statement

PipeHawk PLC
14 November 2003

PIPEHAWK PLC

PRELIMINARY STATEMENT FOR THE YEAR ENDED 30 JUNE 2003

Chairman's Statement

The year has been one of change and redirection. Decisive progress has been made
in transferring the Group into a focussed GPR technology and service based
organisation.



As previously reported, it has been a difficult trading year culminating in
consolidated operating losses of £831,000, very much in line with expectation;
this includes the consolidation of the Group's South of England operations into
Alton with the closure of our R&D premises at Church Crookham and the
liquidation of Emrad Limited, together with the reduced headcount this is
providing cost savings of £500,000 p.a.



The Group now comprises four principal business opportunities:



1. Adien - In July 2002 the Group acquired Adien Limited, a high quality, unique
service based on the PipeHawk radar system providing a high level mapping
service. At the planning stage this largely eliminates the need to instruct
contractors to dig holes in the nation's highways. We invested in Adien's
people, premises and technology, and it has doubled its turnover in the year. It
has recently worked on major contracts in Edinburgh and Sheffield and has just
signed up an exclusive  framework agreement with United Utilities. Adien is now
profitable in its own right and has significant growth prospects.



2. SUMO -  provides an instant mark out service, designed to enable contractors
to avoid accidental damage to electric cables, fibre optic cables, gas mains,
water mains and other underground hazards. In October last year we successfully
launched SUMO as a franchise business at the NEC Franchise Exhibition. This was
followed up by the buyout of one of the original three partners to the joint
venture. Since then the implementation of the franchise operation has been
undertaken in a controlled and targeted manner. From the end of this month there
will be five franchisees in addition to the inhouse operation, and these, with
the planned nationwide roll out of the service, are hoped to add substantially
to the Group results.



3. Handheld Pipe Locator - our technology team have completed the first two
phases of this tool, having successfully field tested two concept demonstrators
with our financial and user partners, NEGAS (formerly NYGAS), in the USA. The
next phase is to refine and make the demonstrator lighter and even more operator
friendly; we are currently negotiating this with NEGAS. We anticipate
progressing discussions for a licensing, manufacturing and marketing arrangement
with a commercial partner during the current financial year to achieve
production of the first low cost GPR product with significant volume sales
potential.



4. Mine Detection -The EU/LOTUS landmine project successfully completed the
final field trials in Bosnia and we believe is the only vehicle mounted land
mine detection system which successfully combines three different technologies
(GPR , infra-red and metal detection) in real time to detect anti-personnel
mines with minimal false alarm rate. It is pleasing to note that a few of the
125 countries, which have signed up to the Ottawa Convention requiring disposal
of all their land mines by 2009, are showing some interest in developing
commercially our system.



Two Directors left us during the year, David Mahony and Mike Bushell. I would
like to thank them for their contribution to the group and wish them well for
the future.



The key to our group is our staff. I would like to thank them all for standing
with us and enjoying the challenges of the past year. I look forward to the
future with considerable confidence as health & safety issues, transport
priorities and local and international legislation will increasingly work to our
benefit.



Gordon G Watt

Chairman

14 November 2003


SUMMARISED PROFIT AND LOSS ACCOUNT
for the year ended 30 June 2003




                                                                                Year ended        Year ended
                                                                              30 June 2003      30 June 2002
                                                                                     £'000             £'000
Turnover
Group and share of joint venture                                                     1,095             1,146
Less: share of joint venture turnover                                                 (34)              (17)

Group turnover - total                                                               1,061             1,129


                           - continuing operations                                     526             1,129
                           - acquisitions                                              535                 -


Group operating costs                                                              (1,892)           (2,064)



Group operating loss - total                                                         (831)             (935)


                           - continuing operations                                   (861)             (935)
                           - acquisitions                                               30                 -


Share of operating loss in joint venture                                              (64)              (41)

Total operating loss                                                                 (895)             (976)

Amounts written off investments                                                      (230)                 -

Loss on ordinary activities before interest and taxation                           (1,125)             (976)
Group interest receivable and similar income                                             1                 6
Group interest payable and similar charges                                            (50)              (43)

Loss on ordinary activities before taxation                                        (1,174)           (1,013)

Tax on profit on ordinary activities                                                     -                 -

Transfer from reserves                                                             (1,174)           (1,013)





There are no recognised gains or losses other than those reported above.


                                                                                           p                 p
Loss per share
Basic and diluted                                                                       (6.5)             (7.0)










SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 June 2003


                                                                                Year ended        Year ended

                                                                              30 June 2003      30 June 2002
                                                                                     £'000             £'000

Net cash inflow from operating activities                                             (51)             (785)
Returns on investment and servicing of finance                                        (42)              (37)

Capital expenditure and financial investment                                         (114)             (127)
Acquisitions and disposals                                                            (94)              (33)

Management of liquid resources - transfer from (to) deposit                              -               750

Account

Financing                                                                              201                20



Increase/(decrease) in cash                                                          (100)             (212)






SUMMARISED CONSOLIDATED BALANCE SHEET
at 30 June 2003


                                                                             30 June                  30 June 

                                                                                2003                     2002
                                                                               £'000                    £'000
Fixed assets
Intangible assets                                                               269                       194
Tangible assets                                                                 362                       251
Investment in joint venture:
Share of gross assets                                               42                        24
Share of gross liabilities                                        (97)                      (32)
                                                                  (55)                       (8)

Loan to joint venture                                              80                        20
                                                                                 25                        12

                                                                                656                       457

Current assets
Stocks                                                                          340                       405
Debtors                                                                         280                       553
Investments                                                                      99                         -
Cash at bank and in hand                                                          -                         2

                                                                                719                       960

Creditors: amounts falling due within one year                                (804)                   (1,120)


Net current liabilities                                                        (85)                     (160)

Total assets less current liabilities                                           571                       297

Creditors: amounts falling due after more than
one year                                                                      (402)                      (45)


Net assets                                                                      169                       252




Capital and reserves
Called up share capital                                                         202                       145
Share premium account                                                         3,429                     2,395
Capital reserves                                                                  -                       921
Profit and loss account                                                     (3,462)                   (3,209)

Equity shareholders' funds                                                      169                       252



NOTES TO THE PRELIMINARY STATEMENT
30 June 2003



1.         DIVIDENDS

            The directors do not propose the payment of a dividend.


2.         EARNINGS PER SHARE

            These have been calculated on losses of £1,174,000 (2000: £1,013,000).

            The weighted average number of shares used was:
                                                                                   2003              2002

                                                                                   '000              '000

Basic and diluted                                                                17,961            14,471


3.         PRELIMINARY STATEMENT

            This preliminary statement, which has been agreed with the auditors,
was approved by the Board on 14 November 2002.  It is not the company's
statutory accounts.  The statutory accounts for the year ended 30 June 2002 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 2003 have
not yet been approved, audited or filed.




                      This information is provided by RNS
            The company news service from the London Stock Exchange