26 March 2014 PipeHawk plc ("PipeHawk" or the "Company") Half-yearly results for the six months ended 31 December 2014Chairman's StatementI am pleased to report that the Company's turnover in the six months ended 31December 2014 was £2,583,000 (2013: £2,609,000), resulting in a loss beforetaxation of £142,000 (2013: loss of £244,000) and a profit after taxation of £50,000 (2013: loss of £190,000).During the period, the order intake at QM Systems has been strong. We enter thesecond half of our financial year with a healthy order book and a substantialsales pipeline. We have continued our recruitment drive with the addition ofmanufacturing and system controls engineers to the team. This has enabled us toremove the majority of externally contracted resources employed during theprevious financial year. Our business has expanded into additional industrialsectors, including Packaging and Food & Beverage, bringing with it a whole hostof new opportunities. QM Systems continues to employ an attitude of "customerfirst", as demonstrated by our ability to retain and grow client relationships.As reported in our previous statement for the year ended 30 June 2014, ourmanagement team has been significantly strengthened with key personnel in theroles of manufacturing, purchasing, project management and controlsengineering. We are now seeing the significant rewards within our businesscreated through the work undertaken in the last financial year. During theperiod we have completed the redevelopment of our factory space and we haveadded an in house machining capability to enable us to react far more quicklyto short term customer requirements. The company is now in a strong position tocontinue expansion at the significant rate that we expect.At PipeHawk we have continued to develop our new range of GPR products. We havecontinued to see significant interest in the e-Safe and e-Spade Lite range ofproduct, with new distributors signed and potential distributors showinginterest. Initial feedback from the markets is very positive. We currentlyawait the outcome of our grant application to the Horizon 2020 European fundingstream, due in spring 2015. A successful grant application will assist us inobtaining additional funding to `fast track' expansion into new markets andaddress new product applications. Whilst we await the outcome of thisapplication we continue with the development of the e-Spade Lite platform ofproducts together with investment in our marketing and distribution partners.Adien has traded in very competitive market conditions. A key project that wasprogrammed to commence in the last quarter of 2014 was postponed until 2015which had a negative impact on these results but provides a good start tocalendar year 2015.SUMO, in which the Group holds a 28.4% stake, continues to consolidate itsrecent acquisitions in the geophysical survey market and traded at a smallprofit.Related party transactionsIn the period under review, I was not called upon to provide working capitalsupport to the Company.My letter of support was renewed on 29 October 2014 for a further year. Loans,other than those covered by the CULS agreement, are unsecured and accrueinterest at an annual rate of Bank of England base rate plus 2.15 per cent.In addition to the loans I have provided to the Company in previous years, myfellow directors and I have deferred a certain proportion of our fees andinterest payments until the Company is in a suitably strong position to makethe full payments. At 31 December 2014, these deferred fees and interestpayments amounted to approximately £1,042,000 in total, all of which have beenaccrued in the Company's accounts.Gordon WattChairmanEnquiries:PipeHawk Plc Tel. No. 01252 338 959Gordon Watt (Chairman)Sanlam Securities UK Limited (Nomad and Broker) Tel. No. 020 7628 2200David Worlidge/James ThomasStatement of Comprehensive IncomeFor the six months ended 31 December 2014 6 months ended 6 months ended Year ended 30 31 December 31 December June 2014 2013 2014 (unaudited) (unaudited) (audited) £'000 £'000 £'000Revenue 2,583 2,609 5,111Staff costs (1,257) (1,191) (2,416)General administrative expenses (1,417) (1,586) (3,196)Operating loss (89) (169) (501)Share of operating profit in joint 22 1 28ventureLosson ordinary activities before (67) (168) (473)interest and taxationFinance costs (75) (76) (149)Lossbefore taxation (142) (244) (622)Taxation 192 54 99(Profit/(loss) for the period 50 (190) (523)attributable to equity holders ofthe CompanyOther comprehensive income - - -Total comprehensive income/(loss) 50 (190) (523)for the period net of taxEarnings/(Loss)per share (pence) - 0.14 (0.57) (1.55)basicEarnings/(Loss)per share (pence) - 0.07 (0.57) (1.55)dilutedConsolidated Statement of Financial PositionAs at 31 December 2014Assets As at As at As at 31 December 31 December 30 June 2014 2013 2014 (unaudited) (unaudited) (audited) £'000 £'000 £'000Non-current assetsProperty, plant and equipment 289 196 240Goodwill 1,061 1,061 1,061Investment in joint venture 108 58 86 1,458 1,315 1.387Current assetsInventories 80 115 110Current tax assets 257 38 65Trade and other receivables 1,431 1,323 1,085Cash 61 365 120 1,829 1,841 1,380Total Assets 3,287 3,156 2,767Equity and liabilitiesEquityShare capital 330 330 330Share premium 5,151 5,151 5,151Other reserves (7,930) (7,647) (7,980) (2,449) (2,166) (2,499)Non-current liabilitiesBorrowings 2,327 2,458 2,414Trade and other payable 1,477 1,584 1,683 3,804 4,042 4,097Current liabilitiesTrade and other payables 1,883 1,261 1,142Bank overdrafts and loans 49 19 27 1,932 1,280 1,169Total equity and liabilities 3,287 3,156 2,767Consolidated Statement of Cash FlowFor the six months ended 31 December 2014 6 months ended 6 months ended Year ended 30 31 December 31 December June 2014 2013 2014 (unaudited) (unaudited) (audited) £'000 £'000 £'000Cash inflow from operatingactivitiesLoss from operations (89) (168) (501)Adjustments for:Depreciation 60 45 98 (29) (123) (403)Decrease in inventories 30 163 -(Increase)/Decrease in receivables (346) 76 332Increase/(Decrease) in liabilities 532 (9) -Cash generated/(used) in 187 107 (71)operationsInterest paid (75) (76) (9)Corporation tax received - 54 54Net cashgenerated fromoperating 112 85 26activitiesCash flows from investingactivitiesPurchase of plant and equipment (109) (37) (133)Net cash generated from /(used) in 3 48 (133)investing activitiesCash flows from financingactivitiesNew loans and finance leases 47 - 23Repayment of bank and other loans (88) (51) (100)Repayment of finance leases (21) (15) (27)Net cash generated from financing (62) (66) (104)activitiesDecreasein cash and cash (59) (18) (263)equivalentsCash and cash equivalents at 120 383 383beginning of periodCash and cash equivalents at end 61 365 120of periodConsolidated Statement of changes in equityFor the six months ended 31 December 2014 Share Share Retained Total capital premium earnings account £'000 £'000 £'000 £'0006 months ended 31 December 2013As 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)12 months ended 30 June 2014As at 1 July 2013 330 5,151 (7,457) (1,976)Loss for the period - - (523) (523)As at 30 June 2014 330 5,151 (7,980) (2,499)6 months ended 31 December 2014As at 1 July 2014 330 5,151 (7,980) (2,499)Profit for the period - - 50 50As at 31 December 2014 330 5,151 (7,930) (2,449)Notes to the Interim Results1. Basis of preparationThe Interim Results for the six months ended 31 December 2014 are unaudited anddo not constitute statutory accounts in accordance with section 240 of theCompanies Act 2006.Full accounts for the year ended 30 June 2014, on which the auditors gave anunqualified report and contained no statement under Section 237 (2) or (3) ofthe Companies Act 2006, have been delivered to the Registrar of Companies.The interim financial information has been prepared on a basis which isconsistent with the accounting policies adopted by the Group for the lastfinancial statements and in compliance with basic principles of IFRS.2. Segmental informationThe Group operates in one geographical location being the UK. Accordingly theprimary 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 £'0006 months ended 31 December 2014Total segmental revenue 617 125 1,841 2,583Segmental result (75) (123) 109 (89)Finance costs (4) (71) - (75)Share of operating profit in 22joint ventureLoss before taxation (142)Segment assets 1,037 427 1,823 3,287Segment liabilities 792 3,791 1,153 5,736Depreciation and amortization 40 - 20 606 months ended 31 December 2013Total segmental revenue 748 85 1,776 2,609Segmental result 34 (140) (63) (169)Finance costs (3) (73) - (76)Share of operating loss in joint 1ventureLoss before taxation (244)Segment assets 1,145 424 1,587 3,156Segment liabilities 816 3,362 1,141 5,322Depreciation and amortization 29 - 16 4512 months ended 30 June 2014Total segmental revenue 1,466 211 3,434 5,111Segmental result 33 (468) (66) (501)Finance costs (5) (143) (1) (149)Share of operating profit in 28joint ventureLoss before taxation (622)Segment assets 1,025 185 1,557 2,767Segment liabilities 700 3,481 1,085 5,266Depreciation and amortisation 63 - 35 983. Earnings/(Loss)per shareThis has been calculated on the profit for the period of £50,000 (2013: loss £190,000) and the number of shares used was 33,020,515 (2014: 33,020,515), beingthe weighted average number of share in issue during the period.4. DividendsNo dividend is proposed for the six months ended 31 December 2014.5. Copies of Interim ResultsThe Interim Results will be posted on the Company's web site www.pipehawk.comand copies are available from the Company's registered office at 4, Manor ParkIndustrial Estate, Wyndham Street, Aldershot GU12 4NZ.
