Interim Results

Embargoed : not to be released until 7.00am on

                                                                   3 March 2006

                  PipeHawk Plc ('the Group' or 'the Company')                  

                                Interim Results                                

                   for the six months ended 31 December 2005                   

As I indicated in my statement in November 2005 that accompanied the final
results for the year ended 30 June 2005, trading in the current year started
well and I am delighted to report that the group's progress continues.

The turnover (which includes our share of the turnover from the SUMO joint
venture) for the six months ended 31 December 2005 of £970,000 is an increase
of 30.2 per cent. over the comparative period in 2004 and the retained loss for
the six months ended 31 December 2005 has reduced to £100,000 compared with a
loss of £270,000 in the same period last year.

The Water Industry has now started investing a planned £5.5 billion over the
period 2005-2010 (£3 million per day) to improve drinking water, to protect the
environment and to attempt to tackle the issue of pipe leakage, which has been
well publicised over the last few years. The Board also anticipates an increase
in public pressure towards water companies to reduce leakage particularly given
the recent media coverage regarding the application by a water company for
'water scarcity status' which will allow them to apply compulsory metering on
their customers. Consequently, Adien have seen a significant increase in
activity in the water sector and this work will continue in 2006.

Adien's program of diversification has seen them continue to secure prestigious
contracts outside of the water industry. During the period Adien has again
worked in mainland Europe on contracts which are expected to continue into the
Summer of 2006.

Similarly, SUMO has also benefited from the increase in activity in the water
sector and shareholders will see from the accounts that we have consolidated
our first profit from their results. SUMO is now accelerating its aggressive
marketing campaign to secure further growth.

The Technology Division continues to make progress. During the period it has
supported Adien in designing a Ground Penetrating Radar system to find larger
diameter waterpipes which are buried under fields. In addition to MineHawk, the
mine detection programme, which continues on track, the Technology Division is
at an early stage in a number of other encouraging initiatives for the
development of the next phase of the Company's growth.

In summary, trading continues to improve and we continue to look forward to the
future with confidence.

Gordon Watt

Chairman

3 March 2006 SUMMARISED CONSOLIDATED PROFIT AND LOSS ACCOUNT

for the six months ended 31 December 2005

                                         Note     Six months to   Six months to
                                                    31 December                
                                                           2005     31 December
                                                                           2004
                                                    (Unaudited)                
                                                                    (Unaudited)
                                                                               
                                                           £000            £000
                                                                               
Turnover                                                                       
                                                                               
Group and share of joint venture                            970             745
                                                                               
Less: share of joint venture                              (244)           (190)
turnover                                                                       
                                                                               
Turnover - continuing operations                            726             555
                                                                               
Operating costs                                           (841)           (799)
                                                                               
Operating loss                                            (115)           (244)
                                                                               
Share of operating profit / (loss)                            5            (15)
in joint venture                                                               
                                                                               
Loss on ordinary activities before                        (110)           (259)
interest and taxation                                                          
                                                                               
Group interest payable and similar                         (20)            (28)
charges                                                                        
                                                                               
Loss on ordinary activities before                        (130)           (287)
taxation                                                                       
                                                                               
Tax on profit on ordinary                  2                 30              17
activities                                                                     
                                                                               
Retained loss for the period                              (100)           (270)

                                                               P              P              
                                                                               
Loss per share                                                                 
                                                                               
Basic and diluted                          3              (0.4)           (1.4)

SUMMARISED CONSOLIDATED BALANCE SHEET

at 31 December 2005

                                          Note    31 December  31 December 2004
                                                         2005                  
                                                                    (Unaudited)
                                                  (Unaudited)                  
                                                                               
                                                         £000              £000
                                                                               
Fixed assets                                                                   
                                                                               
Intangible assets                                         234               248
                                                                               
Tangible assets                                           256               302
                                                                               
Investment in joint venture                                 1                 6
                                                                               
                                                          491               556
                                                                               
Current assets                                                                 
                                                                               
Stocks                                                    284               312
                                                                               
Debtors                                                   438               368
                                                                               
                                                          722               680
                                                                               
Creditors: amounts falling due within                   (846)             (896)
one year                                                                       
                                                                               
Net current liabilities                                 (124)             (216)
                                                                               
Total assets less current liabilities                     367               340
                                                                               
Creditors: amounts falling due after                    (630)             (476)
one year                                                                       
                                                                               
Net liabilities                                         (263)             (136)
                                                                               
Capital and reserves                                                           
                                                                               
Called up share capital                                   232               232
                                                                               
Share premium account                                   4,081             4,081
                                                                               
Profit and loss account                               (4,576)           (4,449)
                                                                               
Equity shareholders' deficit                6           (263)             (136)

SUMMARISED CONSOLIDATED CASH FLOW STATEMENT

for the six months ended 31 December 2005

                                             Note   Six months to Six months to
                                                      31 December   31 December
                                                             2005          2004
                                                                               
                                                      (Unaudited)   (Unaudited)
                                                                               
                                                             £000          £000
                                                                               
Net cash outflow from operating              4, 5            (22)          (17)
activities                                                                     
                                                                               
Returns on investment and servicing of                       (20)          (28)
finance                                                                        
                                                                               
Corporation tax received                                       80             -
                                                                               
Capital expenditure and financial                                              
investment                                                                     
                                                                               
Payments for fixed assets                                    (25)          (20)
                                                                               
Cash inflow / (outflow) before use of                          13          (65)
liquid resources and financing                                                 
                                                                               
Financing                                                                      
                                                                               
New loans                                                       -           202
                                                                               
Repayment of loans                                           (37)          (13)
                                                                               
Capital elements of finance payments                            -          (26)
                                                                               
(Decrease)/ increase in cash                                 (24)            98

NOTES TO THE FINANCIAL STATEMENTS

for the 6 months ended 31 December 2005

 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 2005 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 six months ended 31 December 2004 do
not comprise full financial statements. No account has been taken of the
trading results or any other transactions entered into by the Group since 31
December 2005.

 2. Taxation
   
No corporation tax was payable as a result of losses arising and the Company
benefits from the Government's 'Research and Development Tax Credit Scheme'.

 3. Loss per share
   
                                                 Six months to      Six months
                                                   31 December                
                                                          2005            to31
                                                                              
                                                   (Unaudited)   December 2004
                                                                              
                                                                   (Unaudited)
                                                                              
These have been calculated on losses                  £100,130        £269,755
of:                                                                           
                                                                              
The weighted average number of                      23,203,808      23,203,808
shares was:                                                                   
                                                                              
Basic and diluted                                       (0.4p)          (1.2p)

 4. Reconciliation of operating loss to net cash outflow from operating
    activities
   
                                                    Six months       Six months
                                                         to 31                 
                                                      December            to 31
                                                          2005                 
                                                                     December 2
                                                   (Unaudited)                 
                                                                            004
                                                                               
                                                                    (Unaudited)
                                                                               
                                                          £000             £000
                                                                               
Operating loss                                           (115)            (244)
                                                                               
Depreciation and amortisation                               70               90
                                                                               
Movement in stocks                                        (21)             (31)
                                                                               
Movement in debtors                                       (19)             (66)
                                                                               
Movement in creditors                                       63              234
                                                                               
Net cash outflow from operations                          (22)             (17)

 5. Reconciliation of net cash flow to movement of net debt
   
                                                      Six months Six months to
                                                           to 31   31 December
                                                        December          2004
                                                            2005              
                                                                   (Unaudited)
                                                     (Unaudited)              
                                                                              
                                                            £000          £000
                                                                              
Change in cash                                              (24)            98
                                                                              
Cash inflow/ (outflow) from increase/                         37         (163)
(decrease) in debt and lease finance                                          
                                                                              
Net decrease/(increase) in debt resulting from                13          (65)
cashflows                                                                     
                                                                              
New finance leases                                          (56)             -
                                                                              
Movement in net debt for the period                         (43)          (65)
                                                                              
Opening net debt                                           (677)         (598)
                                                                              
Closing net debt                                           (720)         (663)

 6. Reconciliation of movement in shareholders' funds
   
                                                   Six months to Six months to
                                                     31 December   31 December
                                                            2005          2004
                                                                              
                                                     (Unaudited)   (Unaudited)
                                                                              
                                                            £000          £000
                                                                              
Loss for the period                                        (100)         (270)
                                                                              
Decrease in shareholders' funds                            (100)         (270)
                                                                              
Opening shareholders' funds                                (163)           134
                                                                              
Closing shareholders' funds                                (263)         (136)

 7. Dividends
   
The directors are not proposing the payment of a dividend in respect of the six
months ended 31 December 2005.

 8. Copies of interim results will be sent to shareholders shortly and will
    also be available at the Company's registered office, Systems House, Mill
    Lane, Alton, Hampshire GU34 2QG.