TIDMPIP
RNS Number : 7190G
PipeHawk PLC
19 March 2020
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR").
19 March 2020
PipeHawk plc
("PipeHawk" or the "Company")
Unaudited results for the six months ended 31 December 2019
Chairman's Statement
I am pleased to report that the Company's turnover in the six
months ended 31 December 2019 was GBP4,518,000 (H1 2019:
GBP2,901,000), an increase of 56 per cent over the comparable
period last year, resulting in a profit before taxation of
GBP111,000 (H1 2019: loss of GBP164,000) and a profit after
taxation of GBP283,000 (H1 2019: GBP12,000). Our current order book
had been strong on all fronts and everything was looking good - and
then the country and the Company were hit with Coronavirus which is
causing all sorts of problems; in particular it has affected access
to client sites and deferment of decisions on new orders.
QM Systems
During the initial six month period QM has continued its
positive trend both in growth in revenue and profit. This presented
an almost doubling in sales when compared with the same period last
year and has generated a profit of GBP335k after interest and
management charges paid to the Company (H1 2019: GBP73k). This
represents an excellent performance for this subsidiary of the
group.
During the period, order intake was very strong with
approximately GBP3.4 million of orders received. Moving into the
final six months of the current financial year, QM's orderbook is
full, ensuring a strong start to the second half of the year.
However, Coronavirus has hit and, whilst we are doing everything we
can to mitigate its impact while keeping our employees and
stakeholders safe and also keeping the operational facility open
and running, we are in unchartered waters as to how this will play
out.
To support this sustained period of growth, QM continued to
recruit within Design and Manufacturing roles. In particular QM has
invested significantly into the Project Management team to ensure
that it continues to offer the high level of support that its
clients require.
QM has seen continued sales of a number of our products,
particularly the Q-Mac range of versatile carousel conveyors, with
its largest to date, a 60 station carousel being manufactured for
an automotive client. QM has also seen sales of its Electronic
Interface module to a core Petrochemical Client and its PERA
product continues to sell well within the Aerospace industry.
QM has been awarded a second phase of project work with its
partner Penso to deliver an expansion of the automated Carbon Fibre
manufacturing facility. This second phase enables a new range of
larger carbon fibre composite vehicles to be manufactured within
Penso's production cell.
QM's work with Cox Powertrain to deliver a complete turnkey
production facility for the manufacture of its innovative high
power diesel outboard motor is now drawing to a close as QM
completes the final commissioning activities and Cox begins the
volume ramp up.
In October 2019, the Group acquired a small company called
Wessex Precision Instruments. The company manufactures a range of
slip testing equipment for ensuring floor surfaces perform as
required. The products are sold to contract slip testing companies
and laboratories that test floor and road surface performance. The
company is small today, however it presents a great opportunity for
growth into this emerging sector. The company now forms part of
QM's Test division.
Thomson Engineering Design ("TED")
TED's performance has again improved, generating a small profit
after tax on a revenue of GBP364k (H1 2019: GBP224k). During the
period a number of loan units of the Thomson De-clipper and 7
Sleeper Spreader units were manufactured for use as demonstration
and stock sale units. All units are currently out on loan. This has
enabled a number of TED's clients to be offered a 'Try before you
buy' service. This has directly led to a number of requests for
quotation that TED fully expects will turn into product sales as
budgets become available after the Coronavirus situation has been
resolved.
Order intake and quotation activity within the domestic market
has remained relatively static, predominantly with interest focused
on TED's latest products in rail clipping and de-clipping and
sleeper handling. However, during the same period, TED has seen a
significant increase in international enquiries with a number of
substantial orders being received from outside of the UK. In
particular TED has received a GBP140k order for a range of new rail
equipment for a company based in New Zealand, which will be used on
a project in Australia.
Also during the period work has begun on diversifying TED's
capabilities into other markets. TED has seen orders received for a
new gimbal product from an automotive client that totals
approximately GBP150k. The first 30 units have been manufactured
and shipped with a further 24 units to be shipped by the end of
April. TED is expecting more orders for this new and exciting
product range, again when the economy recovers from the effects of
the Coronavirus.
Adien
During this review period Adien demonstrated an effective start
to the year's trading. The renewal of significant long term
framework contracts ensured the supply of continued work producing
good margins.
The award of major contracts within different sectors: Telecomms
5G, Defence consultancy, Distilleries, and Balfour Beatty all
contain significant sub contract elements that provide increased
profitability above the core survey elements of the contract, these
include the provision of: Traffic Management, CCTV, Jetting, Laser
scanning and Drone 3D surveys with inspections. The activity levels
in both England and Scotland remain consistently high and Adien has
now recruited additional staff with experience in the relevant
industry sectors.
The order book was looking very strong with the upturn in
Defence, Telecomms 5G and SSEN, plus infrastructure renewal,
however Coronavirus is now impacting on our ability to deliver to
site and it is too early to quantify what impact Covid-19 will have
on Adien.
Related party transactions
My letter of financial support dated 24 October 2018 was renewed
on 7 October 2019 for a further year.
In addition to the loans I have provided to the Company in
previous years, my fellow directors and I have deferred a certain
proportion of our fees and interest payments until the Company is
in a suitably strong position to make the full payments. During the
six months ended 31 December 2019, these deferred fees and interest
payments amounted to approximately GBP72,000 in total, all of which
have been accrued in the Company's accounts, and as at 31 December
2019 amounted in total to GBP1,420,000.
Gordon Watt
Chairman
Enquiries:
PipeHawk Plc Tel no. 01252 338 959
Gordon Watt (Chairman)
Allenby Capital (Nomad and Broker) Tel no. 020 3328 5656
David Worlidge/Asha Chotai
Statement of Comprehensive Income
For the six months ended 31 December 2019
6 months ended 6 months ended Year ended
31 December 31 December 30 June
2019 2018 2019 (audited)
(unaudited) (unaudited) GBP'000
GBP'000 GBP'000
------------------ ------------------ -------------------
Revenue 4,518 2,901 6,680
Staff costs (1,190) (1,533) (3,265)
General administrative expenses (2,404) (1,462) (3,358)
------------------ ------------------ -------------------
Profit/(loss) on ordinary activities
before interest and taxation 204 (94) 57
Finance costs (118) (70) (45)
------------------ ------------------ -------------------
Profit/(loss) before taxation 111 (164) 12
Taxation 172 176 300
------------------ ------------------ -------------------
Profit for the period attributable
to equity holders of the Company 283 12 312
Other comprehensive income - - -
------------------ ------------------ -------------------
Total comprehensive income
for the period net of tax 283 12 312
================== ================== ===================
Earnings per share (pence)
- basic 0.82 0.04 0.91
Earnings per share (pence)
- diluted 0.58 0.04 0.72
================== ================== ===================
Consolidated Statement of Financial Position
As at 31 December 2019
6 months ended 6 months ended Year ended
Assets 31 December 31 December 30 June
2019 2018 2019 (audited)
(unaudited) (unaudited) GBP'000
GBP'000 GBP'000
------------------ ------------------ -------------------
Non-current assets
Property, plant and equipment 761 490 525
Goodwill 1,279 1,190 1,190
------------------ ------------------ -------------------
2,040 1,680 1,715
------------------ ------------------ -------------------
Current assets
Inventories 295 169 134
Current tax assets 167 274 315
Trade and other receivables 1,120 1,453 1,592
Cash 99 72 774
------------------ ------------------ -------------------
1,681 1,968 2,815
------------------ ------------------ -------------------
Total assets 3,721 3,648 4,530
================== ================== ===================
Equity and liabilities
Equity
Share capital 344 340 344
Share premium 5,205 5,191 5,205
Other reserves (8,613) (9,196) (8,896)
------------------ ------------------ -------------------
(3,064) (3,665) (3,347)
------------------ ------------------ -------------------
Non-current liabilities
Borrowings 2,846 2,928 2,661
Trade and other payable 19 4 3
------------------ ------------------ -------------------
2,865 2,932 2,664
------------------ ------------------ -------------------
Current liabilities
Trade and other payables 1,677 2,246 3,270
Bank overdrafts and loans 2,224 2,135 1,943
------------------ ------------------ -------------------
3,920 4,381 5,213
------------------ ------------------ -------------------
Total equity and liabilities 3,721 3,648 4,530
================== ================== ===================
Consolidated Statement of Cash Flow
For the six months ended 31 December 2019
6 months ended 6 months ended Year ended
31 December 31 December 30 June
2019 2018 2019 (audited)
(unaudited) (unaudited) GBP'000
GBP'000 GBP'000
------------------ ------------------ -------------------
Cash inflow from operating
activities
Profit/(loss) from operations 204 (94) 57
Adjustment for:
Profit on disposal of fixed
assets - (13) (13)
Depreciation 87 41 90
------------------ ------------------ -------------------
291 (66) 134
(Decrease)/Increase in inventories (112) 10 44
Increase/(Decrease) in receivables 480 (278) (417)
(Decrease)/Increase in liabilities (1,706) 104 1,570
------------------ ------------------ -------------------
Cash used in operations (1,047) (230) 1,331
Interest paid (23) (32) (147)
Corporation tax received 320 274 358
------------------ ------------------ -------------------
Net cash generated/(utilised)
from operating activities (750) 12 1,542
------------------ ------------------ -------------------
Cash flows from investing activities
Purchase of plant and equipment (319) (55) (75)
Proceeds from disposal of fixed
assets (1) 17 16
Sale of joint venture investment - - 17
Other income - 17 -
------------------ ------------------ -------------------
Net cash (utilised)/generated
from investing activities (320) (21) (42)
------------------ ------------------ -------------------
Cash flows from financing activities
New loans and finance leases 557 83 -
Repayment of bank and other
loans (105) (8) (676)
Repayment of finance leases (81) (13) (69)
------------------ ------------------ -------------------
Net cash generated/(utilised)
financing activities 371 62 (745)
------------------ ------------------ -------------------
(Decrease)/Increase in cash
and cash equivalents (699) 53 755
Cash and cash equivalents at
beginning of period 774 19 19
Acquisition of subsidiary 24 - -
------------------ ------------------ -------------------
Cash and cash equivalents at
end of period 99 72 774
================== ================== ===================
Consolidated Statement of Changes in Equity
For the six months ended 31 December 2019
Share premium
Share capital account Retained
earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------------- ----------- --------
6 months ended 31 December 2018
As at 1 July 2018 340 5,191 (9,208) (3,677)
Profit for the period - - 12 12
Total comprehensive income - - 12 12
---------------- -------------- ----------- --------
As at 31 December 2018 340 5,191 (9,196) (3,665)
================ ============== =========== ========
12 months ended 30 June 2019
As at 1 July 2018 340 5,191 (9,208) (3,677)
Loss for the period - - 312 312
Total comprehensive income - - 312 312
---------------- -------------- ----------- --------
Issue of shares 4 14 - 18
As at 30 June 2019 344 5,205 (8,896) (3,347)
================ ============== =========== ========
6 months ended 31 December 2019
As at 1 July 2019 344 5,205 (8,896) (3,347)
Profit for the period - - 283 283
Total comprehensive income - - 283 283
---------------- -------------- ----------- --------
As at 31 December 2019 344 5,205 (8,613) (3,064)
================ ============== =========== ========
Notes to the Interim Results
1. Basis of preparation
The Interim Results for the six months ended 31 December 2019
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 2019, on which the
auditors gave an unqualified report and contained no statement
under Section 498 (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
Company for the last financial statements and in compliance with
basic principles of IFRS except as disclosed below:
IFRS 16 - Leases - Accounting Policies and Transition
IFRS 16 leases, which is applicable for periods starting on or
after 1 January 2019. The accounting policies applied here in are
consistent with those expected to be applied in the financial
statements for the year ended 30 June 2020.
The group has applied the practical expedient available on
transition to IFRS 16 not to reassess whether a contract is or
contains a lease. Accordingly, the definition of a lease in
accordance with IAS 17 will continue to apply to those leases
entered into before 1 January 2019.
IFRS has introduced a single, on-balance sheet accounting model
for lessees, eliminating the distinction between operating and
finance leases. IFRS 16 has impacted how the Group accounts for
leases under IAS 17. On initial application at 1 July 2019 and
followed the modified retrospective method, the group has performed
the following:
o Recognised right of use assets and lease liabilities in the
Consolidated Statement of Financial Position, measured at the
present value of future lease payments, discounted using the rate
implicit in the lease or the lessee's incremental borrowing rate,
if this is not stated. These are included within Property, plant
and equipment and current and non-current borrowing.
o Recognised depreciation of right of use assets and interest on
lease liabilities in the Consolidated Statement of Comprehensive
income.
o Separated the total amount of cash paid into a principal
portion and interest, presented within financing activities within
the Consolidated Statement of cash flow.
The incremental borrowing rate is calculated on a lease by lease
basis. The weighted average leasee's borrowing rate applied on the
lease liability on 1 July 2019 was 3.19 per cent.
Reconciliation of operating lease commitments to lease the lease
liability at 1 July 2019:
GBP'000
--------
Operating leases disclosed at 30 June 2019 224
Discounted using the weighted average incremental borrowing
rate (26)
--------
Lease liability recognised at 1 July 2019 198
========
At 1 July 2019 the right of use asset recognised was GBP198,000
and a corresponding lease liability was GBP198,000.
At 31 December 2019 the financial impact following the
introduction of IFRS 16 is as follows:
Right of use asset GBP'000
--------
At 1 July 2019 198
Additions 109
Depreciation (39)
--------
At 31 December 2019 268
========
Lease liabilities GBP'000
--------
At 1 July 2019 198
Additions 109
Repayments (42)
Interest 5
--------
At 31 December 2019 270
========
Current 58
Non-current 212
--------
Total 270
========
Amounts recorded in the income statement GBP'000
--------
Depreciation charges on right of use assets 39
Interest on lease liabilities 5
--------
Total 44
========
The total cash outflow for leases during the year was
GBP42,000.
2. Segmental information
The Company operates in one geographical location being the UK.
Accordingly, the primary segmental disclosure is based on
activity.
Utility Development,
detection assembly Automation
and mapping and sale and test
services of GPR equipment system solutions
Total
GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------------ ------------------- --------
6 months ended 31 December
2019
Total segmental revenue 638 49 3,831 4,518
============= ================== =================== ========
Segment result (110) 51 263 204
Finance costs (7) (72) (14) (93)
--------
Profit before taxation 111
========
Segment assets (incl. IFRS
16 note 1) 691 1,604 1,426 3,721
Segment liabilities (incl.
IFRS 16 note 1) 610 4,329 1,846 6,785
Non-current asset additions
(incl. 16 note 1) 118 18 155 291
Depreciation and amortisation
(incl. IFRS 16 note 1) 43 6 38 87
============= ================== =================== ========
6 months ended 31 December
2018
Total segmental revenue 709 107 2,085 2,901
============= ================== =================== ========
Segmental result (15) 4 (83) (94)
Finance costs (5) (51) (14) (70)
--------
Loss before taxation (164)
========
Segment assets 479 1,444 1,725 3,648
Segment liabilities 528 4,394 2,391 7,313
Non-current (20) - 32 12
Depreciation and amortisation 26 - 15 41
============= ================== =================== ========
12 months ended 30 June 2019
Total segmental revenue 1,314 192 5,174 6,680
============= ================== =================== ========
Segmental result
Finance costs (47) 34 70 57
Profit before taxation (10) (1) (34) (45)
--------
12
========
Segment assets 529 1,322 2,679 4,530
Segment liabilities 481 4,239 3,157 7,877
Non-current asset additions 75 - 62 137
Depreciation and amortisation 55 - 35 90
============= ================== =================== ========
3. Earnings per share
This has been calculated on the profit for the period of
GBP283,000 (H1 2019: GBP12,000) and the number of shares used was
34,360,515 (H1 2019: 34,020,515), being the weighted average number
of shares in issue during the period.
4. Dividends
No dividend is proposed for the six months ended 31 December
2019.
5. Copies of Interim Results
The Interim Results will be posted on the Company's website
www.pipehawk.com and copies are available from the Company's
registered office at 4, Manor Park Industrial Estate, Wyndham
Street, Aldershot, GU12 4NZ.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR GPUCPWUPUPWR
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