Half-yearly Report

10 March 2014

                                 PipeHawk plc                                  

                         ("PipeHawk" or the "Company")                         

         Half-yearly results for the six months ended 31 December 2013         

Chairman's Statement

I am pleased to report that the Company's turnover in the six months ended 31
December 2013 was £2,609,000, an increase on turnover for the corresponding
period last year of 24 per cent. (2012: £1,984,000), resulting in a loss before
taxation of £244,000 (2012: profit of £83,000 after capitalising £103,000 of
research and development expenditure.)

During the period, QM Systems has completed a re-alignment of business practice
to effect "best in class" ensuring we facilitate the continuance of business
growth whilst we continue to maintain the high standards in terms of the
quality of our systems delivered and the timeliness of those deliveries that
our clients have come to expect. During the year ended 30 June 2013, QM Systems
doubled in size, and during the six months ended 31 December 2013, in order to
maintain the ability to grow at pace, we have made significant investment in
new people in key engineering and management roles and in expanding of our
factory and offices, effectively doubling our floor space and almost tripling
our delivery capacity. All work and investment has been completed during the
period under review. During the period, QM Systems order intake has remained
very buoyant and we enter the second half of this financial year with a healthy
order book, including contracts secured with five new clients. Since the year
end our £1.6 million Kingspan production line has entered full production run
up. In addition, we have shipped out to India a complete production line for an
off highway vehicles manufacturer.

During the period, PipeHawk has continued the development of the e-Safe and
e-Spade Lite family of next generation products. I am pleased to announce that
orders have now been received for the first units and PipeHawk is committed to
fulfilling these initial orders during the first half of 2014. From marketing
activity carried out over the last six months we are confident that sales for
the modular based e-Safe and e-Spade Lite product family will increase to
significant volume. Our focus has remained on ensuring that the product, when
launched, is mature, robust and a market leader in its own right, it is
designed to be the most competitive and user friendly product on the market
today for utilities detection and will provide a low cost solution to safely
detecting services underground. In addition to our utilities product
developments, PipeHawk has continued work on our joint venture with Qinetiq to
provide NATS with a new and scalable wind farm planning tool. This tool, which
is based on PipeHawk's experience with radio frequency transmissions, builds on
studies undertaken previously with NATS.

Adien has remained profitable, albeit at a lower level to last year and
continues to concentrate on working with major infrastructure providers. Adien
continues to target framework agreement with major infrastructure providers as
this provides stability and recurring revenue streams.

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.

Overall, whilst I am somewhat disappointed by our bottom line result for the
six months, I am very happy that we have now made the strategic investment in
our facilities, order book and marketing effort which we believe have laid the
foundations for significant growth in the future.

In the period under review, I was not called upon to provide further working
capital support to the Company which is a further testament to the growing
strength of the Group.


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/Simon Clements                                                  



Statement of Comprehensive Income

For the six months ended 31 December 2013

                                   6 months ended 6 months ended     Year ended 
                                      31 December    31 December        30 June 
                                             2013           2012           2013    
                                      (unaudited)    (unaudited)      (audited)
                                                                               
                                            £'000          £'000          £'000         
                                                                               
Revenue                                     2,609          1,984          5,224
                                                                               
Staff costs                               (1,191)          (950)        (2,106)
                                                                               
General administrative expenses           (1,586)          (865)        (2,367)
                                                                               
Operating (loss) /profit before             (169)            169            751
amortisation and impairment of                                                 
research and development                                                       
expenditure                                                                    
                                                                               
Amortisation and impairment of                  -              -        (2,520)
research and development                                                       
expenditure                                                                    
                                                                               
Operating (loss)/ profit                    (169)            169        (1,769)
                                                                               
Share of operating profit / (loss)              1              -           (35)
in joint venture                                                               
                                                                               
(Loss)/Profiton ordinary                    (168)            169        (1,804)
activities before interest and                                                 
taxation                                                                       
                                                                               
Finance costs                                (76)           (86)          (162)
                                                                               
(Loss)/Profit before taxation               (244)             83        (1,966)
                                                                               
Taxation                                       54             34             34
                                                                               
(Loss)/Profit for the period                (190)            117        (1,932)
attributable to equity holders of                                              
the Company                                                                    
                                                                               
Other comprehensive income                      -              -              -
                                                                               
Total comprehensive (loss)/income           (190)            117        (1,932)
for the period net of tax                                                      
                                                                               
(Loss)/Profit per share (pence) -          (0.57)           0.36         (5.85)
basic                                                                          
                                                                               
(Loss)/Profit per share (pence) -          (0.44)           0.24         (3.98)
diluted                                                                        



Consolidated Statement of Financial Position

As at 31 December 2013

Assets                                      As at          As at          As at
                                      31 December    31 December        30 June 
                                             2013           2012           2013
                                      (unaudited)    (unaudited)      (audited)          
                                                                               
                                            £'000          £'000          £'000
                                                                               
Non-current assets                                                             
                                                                               
Property, plant and equipment                 196            228            205
                                                                               
Goodwill                                    1,061          1,061          1,061
                                                                               
Intangible assets                               -          2,451              -
                                                                               
Investment in joint venture                    58             93             58
                                                                               
                                            1,315          3,833          1.324
                                                                               
Current assets                                                                 
                                                                               
Inventories                                   115             30            110
                                                                               
Current tax assets                             38             16             47
                                                                               
Trade and other receivables                 1,323          1,278          1,390
                                                                               
Cash                                          365            741            383
                                                                               
                                            1,841          2,065          1,931
                                                                               
Total Assets                                3,156          5,898          3,254
                                                                               
Equity and liabilities                                                         
                                                                               
Equity                                                                         
                                                                               
Share capital                                 330            330            330
                                                                               
Share premium                               5,151          5,151          5,151
                                                                               
Other reserves                            (7,647)        (5,408)        (7,457)
                                                                               
                                          (2,166)             73        (1,976)
                                                                               
Non-current liabilities                                                        
                                                                               
Borrowings                                  2,458          2,673          2,519
                                                                               
Trade and other payable                     1,584          1,520          1,522
                                                                               
                                            4,042          4,193          4,041
                                                                               
Current liabilities                                                            
                                                                               
Trade and other payables                    1,261          1,596          1,163
                                                                               
Bank overdrafts and loans                      19             36             26
                                                                               
                                            1,280          1,632          1,189
                                                                               
Total equity and liabilities                                                   
                                                                               
                                            3,156          5,898          3,254



Consolidated Statement of Cash Flow

For the six months ended 31 December 2013

                                   6 months ended 6 months ended     Year ended 
                                      31 December    31 December        30 June          
                                             2013           2012           2013
                                      (unaudited)    (unaudited)      (audited)  
                                                                               
                                            £'000          £'000          £'000       
                                                                               
Cash inflow from operating                                                     
activities                                                                     
                                                                               
(Loss)/Profit from operations               (168)            169        (1,769)
                                                                               
Adjustments for:                                                               
                                                                               
Impairment of intangible assets                 -              -          2,520
                                                                               
Depreciation                                   45             47             90
                                                                               
                                            (123)            216            841
                                                                               
Decrease in inventories                       163            119             39
                                                                               
Decrease /(Increase) in                        76          (425)          (568)
receivables                                                                    
                                                                               
(Decrease)/Increase in liabilities            (9)            943            356
                                                                               
Cash generated in operations                  107            853            668
                                                                               
Interest paid                                (76)           (86)            (6)
                                                                               
Corporation tax received                       54            104            104
                                                                               
Net cashgenerated fromoperating                85            871            766
activities                                                                     
                                                                               
Cash flows from investing                                                      
activities                                                                     
                                                                               
Development costs paid                          -          (103)          (172)
                                                                               
Purchase of plant and equipment              (37)           (80)          (101)
                                                                               
Sale of plant and equipment                     -              1              2
                                                                               
Net cash generated/(used in) from              48          (182)          (271)
investing activities                                                           
                                                                               
Cash flows from financing                                                      
activities                                                                     
                                                                               
New loans and finance leases                    -             48             59
                                                                               
Repayment of bank and other loans            (51)          (171)          (314)
                                                                               
Repayment of finance leases                  (15)           (14)           (46)
                                                                               
Net cash generated from financing            (66)          (137)          (301)
activities                                                                     
                                                                               
(Decrease) / Increasein cash and             (18)            552            194
cash equivalents                                                               
                                                                               
Cash and cash equivalents at                  383            189            189
beginning of period                                                            
                                                                               
Cash and cash equivalents at end              365            741            383
of period                                                                      



Consolidated Statement of changes in equity

For the six months ended 31 December 2013

                                        Share      Share    Retained      Total
                                      capital    premium    earnings           
                                                 account                       
                                                                               
                                        £'000      £'000       £'000      £'000
                                                                               
6 months ended 31 December 2012                                                
                                                                               
As at 1 July 2012                         330      5,151     (5,525)       (44)
                                                                               
Profit for the period                       -          -         117        117
                                                                               
As at 31 December 2012                    330      5,151     (5,408)         73
                                                                               
12 months ended 30 June 2013                                                   
                                                                               
As at 1 July 2012                         330      5,151     (5,525)       (44)
                                                                               
Loss for the period                         -          -     (1,932)    (1,932)
                                                                               
As at 30 June 2013                        330      5,151     (7,457)    (1,976)
                                                                               
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)
                                                                               

Notes to the Interim Results

1. Basis of preparation

The Interim Results for the six months ended 31 December 2013 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 2013, 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 2013                                                
                                                                               
Total segmental revenue                    748           85     1,776     2,609
                                                                               
Segmental result                            34        (140)      (63)     (169)
                                                                               
Finance costs                              (3)         (73)         -      (76)
                                                                               
Share of operating profit in                                                  1
joint 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 amortisation               29            -        16        45
                                                                               
6 months ended 31 December 2012                                                
                                                                               
Total segmental revenue                    906           72     1,006     1,984
                                                                               
Segmental result                           128         (76)       117       169
                                                                               
Finance costs                              (4)         (82)         -      (86)
                                                                               
Share of operating loss in joint                                              -
venture                                                                        
                                                                               
Profit before taxation                                                       83
                                                                               
Segment assets                           1,052        2,877     1,969     5,898
                                                                               
Segment liabilities                        896        3,155     1,774     5,825
                                                                               
Depreciation and amortisation               33           14         -        47
                                                                               
12 months ended 30 June 2013                                                   
                                                                               
Total segmental revenue                  1,780          171     3,273     5,224
                                                                               
Segmental result                           271      (2,471)       431   (1,769)
                                                                               
Finance costs                              (6)        (156)         -     (162)
                                                                               
Share of operating loss in joint                                           (35)
venture                                                                        
                                                                               
Loss before taxation                                                    (1,966)
                                                                               
Segment assets                           1,149          426     1,679     3,254
                                                                               
Segment liabilities                        851        3,209     1,170     5,230
                                                                               
Depreciation and amortisation               62        2,345       203     2,610
                                                                               

3. (Loss)/Profit per share

This has been calculated on the loss for the period of £190,000 (2012: profit 
£117,000) and the number of shares used was 33,020,515 (2012: 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 2013.

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.