The
information contained within this announcement is deemed by the
Company to constitute inside information as stipulated under the UK
Market Abuse Regulation
28
November 2024
PipeHawk
plc
("PipeHawk", "Company" or the "Group")
Final results for the year
ended 30 June 2024
Highlights
-
Turnover of £9.1 million (2023: £6.5
million). Excluding QM Systems Ltd, the
Group's turnover for the financial year was £2.9
million.
-
Loss before taxation and
exceptional items for the financial year
of £821,000 (2023: loss £3,284,000). Excluding QM
Systems Ltd, the Group' loss before taxation and exceptional
items for the financial year was £0.27 million.
-
Cautiously projecting a return to operating
profitability in the current financial year ending 30 June
2025.
I can report that the Group's
turnover (including QM Systems Ltd) for
the financial year ended 30 June 2024 (the "Financial Year" or
"2023/24 FY") increased to £9.1 million (2023: £6.5 million). The
Group incurred an operating loss (including QM Systems Ltd) in the
Financial Year of £1,215,000 (2023: £2,899,000), a loss before
taxation and exceptional items (including QM Systems Ltd) for the
Financial Year of £1,639,000 (2023: loss £3,284,000) and a loss
after taxation and exceptional items (including QM Systems Ltd) of
£821,000 (2023: loss
£2,484,000). The loss per share for the
Financial Year was 2.26p (2023: loss per share 6.84p).
In July 2024, QM Systems Ltd
("QM"), a subsidiary of the Group, entered into administration.
Accordingly, the board of directors of the Group (the "Board" or
the "Directors") determined to treat impairment losses and gains
related to QM as exceptional items in these accounts. Due to the
impact of the QM administration the investments were written off in
its entirety and suffered the appropriate qualification in the
Group's audit report.
Excluding QM Systems Ltd and
focusing on the remaining group operations only, the Group's
turnover for the Financial Year was £2.9 million with an operating
profit of £0.12 million. Loss before taxation and exceptional items
(excluding QM Systems Ltd) for the Financial Year was £0.27
million.
Well, that was an extremely
challenging year!
There was cause for cautious
optimism as we entered the Financial Year with a record orderbook
across the Group's subsidiaries and throughout the Financial Year
as quotes and interest in the Group's solutions were high.
Unfortunately, the challenging political, economic and financial
backdrop in the UK contributed to what the Board believes is an
environment that is currently not supportive of a manufacturing
economy. For example, based on feedback and discussions with
prospective customers, the Board believed that QM's technical
solutions were viewed as better and more cost effective than
solutions that competitors could offer. However, in reality, weak
business confidence amongst our target customer base meant that
commitment of the necessary capital expenditure continued to be
deferred. Similarly, whilst all three of QM's contract
manufacturing lines were ready for production, certain of QM's
contracted clients continually deferred start of production ("SOP")
until they viewed business conditions to be more favourable, which
failed to materialise during the Financial Year.
As a result, shortly following the
end of the Financial Year, QM went into administration as orders
continued to be deferred and two significant orders failed to
materialise.
On a positive note, the other
businesses in the Group service the utilities, government and rail
industries. Our experience in these areas is that they are
significantly less reliant on the confidence of private sector
businesses to commit funds for major investments. Rather they
are more driven by the demands of the public sector, where there
has previously been major underinvestment, but which now appears to
be progressing albeit it is still early days. Additionally, the
Board anticipates that Thomson Engineering Design Ltd and Utsi
Electronics Ltd will increasingly be servicing a global marketplace
and will therefore be less affected by the UK's uncertain business
environment. These businesses, including Adien Ltd, had a combined
turnover of £2,934,000 in the Financial Year (2023: £2,284,000) and
a pre-tax loss of £278,000 (2023: £1,511,000). I am therefore
cautiously projecting a return to operating profitability in the
current financial year ending 30 June 2025 ("Current Financial
Year").
Notwithstanding the Board's
confidence that the infrastructure sectors are the right business
areas to be in, the economic and political environment in the UK
clearly continues to be inimical to business in general and SMEs in
particular, accordingly the directors have taken the decision to
write off the entirety of the Group's cost of investment and
goodwill in its subsidiaries in these accounts.
QM Systems Ltd ("QM")
The Board believed that QM was on
track to report its best ever year for sales with a turnover of
£6,204,000 (2023: £4,185,000) and a pre-tax loss of £1,361,000
(2023: £1,545,000) despite the minimal intake of new orders during
the Financial Year.
While not adverse to QM's
financial position in isolation, QM experienced an increase in
overheads over the past three years in order to cope with an
expected uptick in new projects and the contract manufacturing
business. Similarly, because of the reduced order activity and a
rise in enquiries which needed to be quoted, utilisation of staff
was sub-optimal and delivery of components and fabrications, due to
our suppliers struggling with the recession, impacted the ability
for QM to absorb losses. The aforementioned factors and the loss of
the two anticipated material orders led to QM's financial position
being under severe financial pressure, and ultimately prompted the
Group announcing on 16 July 2024 that it had appointed RSM UK
Restructuring Advisory LLP as administrators to QM.
Thomson Engineering Design Ltd ("TED")
As mentioned in my Chairman's
statement last year, Network Rail's CP6 funding round ended in
March 2024 and the new round, CP7, started in April 2024. Network
Rail has announced that it has a budget spend of £44 billion over
the next five years so there is now a degree of budget certainty
amongst suppliers and contractors to Network Rail. As a result,
TED's business was slow at the start of the Financial Year up to
the point that CP6 finished, but UK orders picked up significantly
in the last quarter of the Financial Year at the start of CP7, and
have continued into the first quarter of the Current Financial
Year. We expect this growth to continue for the next four years as
Network Rail looks for innovative solutions to make the most
cost-effective use of its budget in maintaining and upgrading the
UK's rail infrastructure, both for work on Network Rail's
infrastructure and for Eurotunnel.
The TED and Unipart Rail Limited
("Unipart") partnership continues to strengthen as Unipart gains
market presence in the rest of the world selling 'Yellow Plant',
having exhibited at many shows around the world. The
partnership has now received orders from Australia, France, Germany
and North America, where large infrastructure projects continue to
come to fruition. In addition, the respective regional Unipart
sales teams are working hard to ensure that the TED name is
embedded in future infrastructure projects enabling the pipeline to
continue. Since the memorandum of understanding (the "MoU")
was signed with Unipart in September 2022, the total value of
orders received from Unipart Rails now in excess of £1
million.
The above developments in the UK
market and the global market are seen as very positive for TED over
the next few years.
Adien Ltd ("Adien")
The previous financial year which
ended on 30 June 2023 was difficult for Adien, which provides
topographical and GPR services to the utilities sector, with
several large projects shelved as business confidence continued to
be undermined by the challenging political environment. However,
the combination of a new managing director appointment
re-invigorating the sales team, the removal of some underperforming
staff, and a degree of political stability has turned the company
around. Adien is now meeting its strategic targets and reporting
profits on a monthly basis. During the Financial Year, Adien
secured a fresh framework agreement with SSE and a healthy tranche
of ministry of defence ("MoD") work. These agreements, together
with other utility business, have kept the Adien teams very busy
and the current order book is looking strong with works programmed
going into spring next year with full utilisation of all site
teams. Orders continue to remain very strong.
Adien managed to add one further
full site team this summer. We are continuing to seek further
staff, though it is difficult to secure suitably qualified and
capable personnel. The search continues and remains the top
priority for operations.
Adien has just moved into new,
larger premises; this will allow further expansion of the sales and
operation teams to facilitate the anticipated ongoing growth in
sales.
Utsi Electronics Ltd ("Utsi")
Utsi had a very quiet start to the
Financial Year, followed by a flat middle and a very busy Financial
Year end which saw the number of individual sales overall down over
the Financial Year, but the value of completed sales remaining
buoyant by comparison.
The biggest restriction on closing
sales continues to be the availability of raw materials and
essential components, with many potential customers simply not
willing or unable to wait the additional time required to complete
their orders. With two significant orders being delayed over four
months and consequently pushing completion to after the Financial
Year end, Utsi's financial results are not as good as they should
have been.
Internal investment into new
designs to lessen our reliance on high cost and/or hard to acquire
components continues apace.
As market requirement for off the
shelf systems has dipped in the UK, overseas orders have remained
broadly flat over the Financial Year.
Our previous decision to
concentrate on the specialist system market continues to deliver,
with bespoke system orders now our strongest growth area for both
enquiries and sales.
Financial position
The Group continues to be in a net
liability position and is still reliant on my continuing financial
support.
My letter of support dated 26
November 2023 was renewed on 20 November 2024 to provide the Group
with financial support until 31 December 2025. Loans due to me,
other than those covered by the CULS (as defined below) agreement,
are unsecured and accrue interest at an annual rate of Bank of
England base rate plus 2.15%. These include the further loans
provided by me to the Group to provide QM Systems with the time
needed to land the substantial new orders it was anticipating,
which unfortunately failed to materialise.
The Group's £1.0 million
convertible unsecured loan stock issued to me (the "CULS") was
renewed on 30 June 2022 and extended on identical terms, such that
the CULS are now repayable on 13 August 2026. Further details of
the CULS were most recently announced by the Group on 26 September
2024.
In addition to the loans I have
provided to the Company in previous years, I have deferred a
certain proportion of fees and the interest due on loans I have
provided until the Company is in a suitably strong position to make
the full payments. During the Financial Year, the deferred
element of fees and interest amounted to £252,000 and the aggregate
amount of deferred fees and interest outstanding to me as at the
end of the Financial Year amounted to approximately £2.0 million in
total, all of which has been recognised as a liability in the
Company's accounts.
Disclaimer of audit opinion
The timing of the entry into
administration of QM Systems Limited and the subsequent inability
to access the accounting records of that entity due to the Group
ceasing to exercise control over QM Systems Limited has resulted in
the Group's independent auditor being unable to obtain sufficient
appropriate audit evidence in respect of the trading performance
and assets and liabilities in respect of QM Systems Limited.
Consequently, as is customary in this scenario, the Group's
independent auditor has not been able to express an opinion on the
Group's and PipeHawk's financial statements. Further
information on the basis for disclaimer of opinion is set out in
the Independent Auditor's Report to the Members of PipeHawk plc on
page 13 of the Report and Accounts and is extracted
below.
Strategy & Outlook
The Group remains committed to
creating sustainable earnings-based growth and focusing on the
expansion of its business with forward-looking products and
services. PipeHawk acts responsibly towards its shareholders,
business partners, employees, society and the environment in each
of its business areas.
PipeHawk is committed to
technologies and products that unite the goals of customer value
and sustainable development. Despite wider current market
conditions, all divisions of the Group are currently performing
well, and I remain optimistic in my outlook for the
Group.
Gordon Watt
Executive Chairman
Date: 27 November 2024
Independent Auditor's Report to the Members of PipeHawk Plc
for the year ended 30 June 2024
"Disclaimer of
Opinion
We were engaged to audit the financial statements of Pipehawk
plc (the "Parent Company") and its subsidiaries (the "Group") for
the year ended 30 June 2024, which comprise:
· the Consolidated statement
of comprehensive income for the year ended 30 June
2024;
· the Consolidated and Parent
Company statements of financial position as at 30 June
2024;
· the Consolidated and Parent
Company statements of cash flows for the year then
ended;
· the Consolidated and Parent
Company statements of changes in equity for the year then ended;
and
· the notes to the financial
statements, including material accounting
policies.
The financial reporting framework that has been applied in
the preparation of the financial statements is applicable law and
UK-adopted international accounting standards.
We do not express an opinion on the accompanying financial
statements of the Group and Parent company. Because of the
significance of the matters described in the Basis for Disclaimer
of Opinion section of our report, we have not been able to obtain
sufficient appropriate audit evidence to provide a basis for an
audit opinion on these financial statements.
Basis for Disclaimer of
Opinion
After the reporting date, but before we commenced our audit,
a significant component of the group, QM Systems Limited ('QM
component') went into administration. Upon entering administration,
the Group ceased to exercise control over the QM component. As a
consequence of the loss of control management have not been able to
provide us with the accounting records required for our audit of
this component. We were unable to obtain sufficient appropriate
audit evidence in respect of the trading performance and assets and
liabilities in respect of QM component making up the Consolidated
statement of comprehensive income, Consolidated statements of
changes in equity and Consolidated statements of cash
flows.
Furthermore, the management has not consolidated the
financial position of the QM component in the Consolidated
statements of financial position.
The Group and Parent Company are reliant on the continued
support of the Executive Chairman to continue their
operations. This gives rise to a
material uncertainty as to whether the Group and Parent Company are
able to continue as a going concern.
As a consequence of these factors, which we consider to be
both material and pervasive to the financial statements, we were
unable to conclude whether these financial statements present a
true and fair view of the Group's financial
position.
Opinion on other matter
prescribed by the Companies Act 2006
Because of the significance of the matter described in the
basis for disclaimer of opinion section of our report, we have been
unable to form an opinion, whether based on
the work undertaken in the course of our audit:
· the information given in
the strategic report and the directors' report for the financial
year for which the financial statements are prepared is consistent
with the financial statements; and
· the directors' report and
strategic report have been prepared in accordance with applicable
legal requirements.
Matters on which we are
required to report by exception
Notwithstanding our disclaimer of an opinion on the financial
statements, in the light of the
knowledge and understanding of the Group and the Parent Company and
their environment obtained in the course of the audit performed
subject to the pervasive limitation described above, we have not
identified material misstatements in the strategic report or the
directors' report.
Arising from the limitation of our work referred to
above:
· we have not obtained all
the information and explanation that we considered necessary for
the purpose of the audit; and
· we were unable to determine
whether adequate accounting records have been
kept.
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
· returns adequate for our
audit have not been received from branches not visited by us;
or
· the parent company
financial statements are not in agreement with the accounting
records and returns; or
· certain disclosures of
directors' remuneration specified by law are not
made.
Responsibilities of the
directors for the financial statements
As explained more fully in the directors' responsibilities
statement set out on page 12, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group's and Parent Company's ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities
for the audit of the financial statements
Our responsibility is to conduct an audit of the financial
statements in accordance with International Standards on Auditing
(UK) and to issue an auditor's report.
However, because of the matter described in the basis for
disclaimer of opinion section of our report, we were not able to
obtain sufficient appropriate audit evidence to provide a basis for
an audit opinion on these consolidated financial
statements.
We are independent of the Group and company in accordance
with the ethical requirements that are relevant to our audit of the
financial statements in the United Kingdom, including the FRCs
Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements.
Auditor's responsibility in
respect of Irregularities and Fraud
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of
non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including
fraud.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with
auditing standards. We are not responsible for preventing
non-compliance and cannot be expected to detect non-compliance with
all laws and regulations.
These inherent limitations are particularly significant in
the case of misstatement resulting from fraud as this may involve
sophisticated schemes designed to avoid detection, including
deliberate failure to record transactions, collusion or the
provision of intentional misrepresentations.
Use of our
report
This report is made solely to the company's members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to
the company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's
members as a body, for our audit work, for this report, or for the
opinions we have formed.
Leo Malkin (Senior Statutory Auditor)
for and on behalf of
Crowe U.K.
LLP
Statutory Auditor
London"
Enquiries:
|
PipeHawk plc
Gordon Watt (Chairman)
|
Tel. No. 01252 338 959
|
|
Allenby Capital Limited (Nomad and Broker)
|
Tel. No. 020 3328 5656
|
David Hart / Vivek
Bhardwaj
For further information on the
Company and its subsidiaries, please visit:
www.pipehawk.com
Consolidated statement of comprehensive
income
For the year ended 30 June
2024
|
|
Note
|
30 June
2024
QM Systems
Ltd
£'000
|
30 June
2024
Group (Excluding QM Systems
Ltd)
£'000
|
30 June
2024
Total
£'000
|
|
30 June
2023
£'000
|
|
|
|
|
|
|
|
|
|
Revenue
|
2
|
6,204
|
2,934
|
9,138
|
|
6,470
|
|
|
|
|
|
|
|
|
|
Staff costs
|
5
|
(3,291)
|
(1,663)
|
(4,954)
|
|
(4,176)
|
|
Impairment of goodwill
Operating costs
|
11
|
-
(4,244)
|
(163)
(992)
|
(163)
(5,236)
|
|
(678)
(4,515)
|
|
Operating profit/ (loss)
|
4
|
(1,331)
|
116
|
(1,215)
|
|
(2,899)
|
|
|
|
|
|
|
|
|
|
Profit/(Loss) before interest, taxation and exceptional
items
|
|
(1,331)
|
116
|
(1,215)
|
|
(2,899)
|
|
|
|
|
|
|
|
|
|
Finance costs
|
3
|
(30)
|
(394)
|
(424)
|
|
(385)
|
|
|
|
|
|
|
|
|
|
(Loss) before taxation and exceptional
items
|
|
(1,361)
|
(278)
|
(1,639)
|
|
(3,284)
|
|
|
|
|
|
|
|
|
|
Taxation (charge) /
credit
|
7
|
(94)
|
42
|
(52)
|
|
800
|
|
(Loss) before exceptional items
Exceptional gains on
de-recognition of QM Systems Ltd
|
|
(1,455)
|
(236)
|
(1,691)
870
|
|
(2,484)
-
|
|
(Loss) for the year attributable to equity holders of the
parent
|
|
|
|
(821)
|
|
(2,484)
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive (Loss) for the year attributable to
equity holder of the parent
|
|
|
|
(821)
|
|
(2,484)
|
|
|
|
|
|
|
|
|
|
(Loss) per share (pence) -
basic
|
8
|
|
|
(2.26)
|
|
(6.84)
|
|
|
|
|
|
|
|
|
|
(Loss) per share (pence) - diluted
|
8
|
|
|
(2.26)
|
|
(6.84)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The notes form an integral part of
these financial statements.
Consolidated statement of financial position
at
30 June 2024
|
|
Note
|
30 June
2024
£'000
|
|
30 June
2023
£'000
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Property, plant and
equipment
|
9
|
447
|
|
783
|
|
Right of use assets
|
10
|
189
|
|
2,283
|
|
Goodwill
|
11
|
-
|
|
679
|
|
|
|
636
|
|
3,745
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Inventories
|
13
|
113
|
|
253
|
|
Current tax assets
|
|
80
|
|
826
|
|
Trade and other
receivables
|
14
|
1,007
|
|
2,767
|
|
Cash and cash
equivalents
|
|
95
|
|
148
|
|
|
|
1,295
|
|
3,994
|
|
|
|
|
|
|
|
Total assets
|
|
1,931
|
|
7,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Share capital
|
18
|
363
|
|
363
|
|
Share premium
|
|
5,316
|
|
5,316
|
|
Retained earnings
|
|
(11,952)
|
|
(11,131)
|
|
|
|
(6,273)
|
|
(5,452)
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Borrowings
Trade and other
payables
|
16
15
|
3,780
121
|
|
4,913
-
|
|
|
|
3,901
|
|
4,913
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Borrowings
Trade and other
payables
|
16
15
|
2,929
1,374
|
|
2,886
5,392
|
|
|
|
4,303
|
|
8,278
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
1,931
|
|
7,739
|
The notes form an integral part of
these financial statements.
Consolidated statement of cash flow
For the year ended 30 June
2024
|
|
Note
|
30 June
2024
£'000
|
|
30 June
2023
£'000
|
|
Cash flows from operating activities
|
|
|
|
|
|
Operating (Loss)
|
|
(1,215)
|
|
(2,899)
|
|
|
|
|
|
|
|
Adjustments for:
|
|
|
|
|
|
Impairment of Goodwill
Impairment of right of use
assets
Depreciation
|
|
163
347
619
|
|
678
-
579
|
|
|
|
(86)
|
|
(1,642)
|
|
|
|
|
|
|
|
Decrease / (increase) in
inventories
|
|
65
|
|
87
|
|
Decrease / (increase) in
receivables
|
|
271
|
|
(378)
|
|
(Decrease) / increase in
liabilities
|
|
(1,002)
|
|
2,759
|
|
Cash (used in) / generated from
operations
|
|
(752)
|
|
826
|
|
|
|
|
|
|
|
Interest paid
|
|
(173)
|
|
(196)
|
|
Corporation tax
received
|
|
695
|
|
683
|
|
Net cash (used in)/ generated from operating
activities
|
|
(230)
|
|
1,313
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of fixed
assets
|
|
(50)
|
|
(111)
|
|
|
|
|
|
|
|
Net cash used in investing
activities
|
|
(50)
|
|
(111)
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
(Repayments) / proceeds from
borrowings
|
|
30
|
|
(210)
|
|
Repayments of loan
Proceeds of loan
|
|
(544)
1,313
|
|
(997)
604
|
|
Repayment of leases
|
|
(572)
|
|
(455)
|
|
|
|
|
|
|
|
Net cash generated from/(used in)
financing activities
|
|
227
|
|
(1,058)
|
|
|
|
|
|
|
|
Net (decrease) / increase in cash and cash
equivalents
|
|
(53)
|
|
144
|
|
|
|
|
|
|
|
Cash and cash equivalents at the
beginning of year
|
|
148
|
|
4
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of
year
|
|
95
|
|
148
|
The notes form an integral part of
these financial statements.
Statement of changes in equity
For the year ended 30 June
2024
|
CONSOLIDATED
|
Share
capital
|
Share premium
account
|
Retained
earnings
|
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
|
As at 1 July 2022
|
363
|
5,316
|
(8,647)
|
|
(2,968)
|
|
|
|
|
|
|
|
|
Loss for the year
|
-
|
-
|
(2,484)
|
|
(2,484)
|
|
|
|
|
|
|
|
|
Total comprehensive
income
|
-
|
-
|
(2,484)
|
|
(2,484)
|
|
|
|
|
|
|
|
|
As at 30 June 2023
|
363
|
5,316
|
(11,131)
|
|
(5,452)
|
|
|
|
|
|
|
|
|
Loss for the year
|
-
|
-
|
(821)
|
|
(821)
|
|
|
|
|
|
|
|
|
Total comprehensive
income
|
-
|
-
|
(821)
|
|
(821)
|
|
As at 30 June 2024
|
363
|
5,316
|
(11,952)
|
|
(6,273)
|
|
|
|
|
|
|
|
The share premium account reserve
arises on the issuing of shares. Where shares are issued at a
value that exceeds their nominal value, a sum equal to the
difference between the issue value and the nominal value is
transferred to the share premium account reserve.
The notes form an integral part of
these financial statements.
1
Summary of material accounting policies
1.1. General information
PipeHawk plc (the "Company" or the
"Group") is a public limited company incorporated in the United
Kingdom under the Companies Act 2006. The addresses of its
registered office and principal place of business are disclosed in
the company information section on page 1. The principal
activities of the Company and its subsidiaries (the Group) are
described on page 7.
The financial statements are
presented in pounds sterling, the functional currency of all
companies in the Group. In accordance with section 408 of the
Companies Act 2006 a separate statement of comprehensive income for
the parent Company has not been presented.
1.2. Basis of preparation
The financial statements have been
prepared in accordance with UK-adopted international accounting
standards (IAS) The principal accounting policies are set out
below.
Adoption of new and revised standards
A number of new standards and
amendments to standards and interpretations have been issued but
are not yet effective and, in some cases, have not yet been adopted
by the UK. The directors do not expect that the adoption of these
standards will have a material impact on the financial statements
of the Company and Group in future periods.
1.3. Basis of preparation - Going
concern
The directors have reviewed the
Parent Company and Group's funding requirements for the next twelve
months which show positive anticipated cash flow generation, prior
to any repayment of loans advanced by the Executive Chairman. The
preparation of cash flow forecasts for the Group requires estimates
to be made of the quantum and timing of cash receipts from future
commercial revenues and the timing of future expenditure. The board
consider that the challenging political,
economic and financial backdrop in the UK presents uncertainties
for the group to achieve its revenue growth
forecasts. The directors have obtained a
renewed pledge from G G Watt to provide ongoing financial support
including additional funding if required for a period of at least
twelve months from the approval date of the Group and Parent
Company statement of financial positions. The directors therefore
have a reasonable expectation that the entity has adequate
resources to continue in its operational exercises for the
foreseeable future. It is on this basis that the directors consider
it appropriate to adopt the going concern basis of preparation
within these financial statements. However, a material uncertainty
exists regarding the ability of the Group and Parent Company to
remain a going concern without the continuing financial support of
the Executive Chairman. The financial
statement does not include adjustments which would arise in the
event of not being a going
concern.
1.4. Basis of consolidation
The consolidated financial
statements incorporate the financial statements of the Company and
entities controlled by the Company (its subsidiaries). Control is
achieved where the Company has the power to govern the financial
and operating policies of an entity so as to obtain benefits from
its activities.
The results of subsidiaries
acquired or disposed of during the year are included in the
consolidated statement of comprehensive income from the effective
date of acquisition or up to the effective date of disposal, as
appropriate. Where necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies into
line with those used by other members of the Group. All intra-group
transactions, balances, income and expenses are eliminated in full
on consolidation.
On 4 July 2024 the directors of
QM, a subsidiary of the Group, held a Board meeting to consider the
company's position following news that two anticipated material
orders will not be forthcoming. Accordingly, the company took
insolvency advice which culminated in the Group announcing on 16
July 2024 that it had appointed RSM UK Restructuring Advisory LLP
as administrators to QM. As a result, the books and records were
not available to the Group be audited and the auditors have
qualified their report and issued a disclaimer audit
report..
Furthermore, the directors of
PipeHawk plc whilst presenting the profit and loss account
including the unaudited management accounts of QM Systems, have
taken the view that to include the similarly unaudited balance
sheet of QM Systems in the Group's consolidated accounts would be
both meaningless and misleading to shareholders. The consolidated
balance sheet therefore treats the Administration of QM as an
adjusting post balance sheet event such that all of the assets and
liabilities of QM have, insofar as the continuing Group is
concerned, no relevance nor value at the year end. The directors
could, within the law, have achieved the same result by moving the
year end for these consolidated accounts to 5 July, but the Board
opted to not do this.
As a result of the above, the
group has recognised an exceptional gain on de-recognition of QM
Systems Ltd in the Consolidated statement of comprehensive income
which includes an impairment charge of £516,000 in respect of
Goodwill relating to QM Systems Ltd.
1.5. Business combinations
Acquisitions of subsidiaries and
businesses are accounted for using the acquisition method. The cost
of the business combination is measured as the aggregate of the
fair values (at the date of exchange) of assets given, liabilities
incurred or assumed, and equity instruments issued by the Group in
exchange for control of the acquiree. The acquiree's identifiable
assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 Business.
Goodwill arising on acquisition is
recognised as an asset and initially measured at cost, being the
excess of the cost of the business combination over the Group's
interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities recognised.
1.6. Goodwill
Goodwill is initially recognised
as an asset at cost and is subsequently measured at cost less any
accumulated impairment losses.
For the purpose of impairment
testing, goodwill is allocated to each of the Group's
cash-generating units expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill has been
allocated are tested for impairment annually, or more frequently
when there is an indication that the unit may be impaired. If the
recoverable amount of the cash-generating unit is less than the
carrying amount of the unit, the impairment loss is allocated first
to reduce the carrying amount of any goodwill allocated to the unit
and then to the other assets of the unit pro-rata on the basis of
the carrying amount of each asset in the unit. An impairment
loss recognised for goodwill is not reversed in a subsequent
period.
On disposal of a subsidiary, the
attributable amount of goodwill is included in the determination of
the profit or loss on disposal.
1.7. Revenue recognition
For the year ended 30 June 2024
the Group used the five-step model as prescribed under IFRS 15 on
the Group's revenue transactions. This included the identification
of the contract, identification of the performance obligations
under the same, determination of the transaction price, allocation
of the transaction price to performance obligations and recognition
of revenue.
The point of recognition arises
when the Group satisfies a performance obligation by transferring
control of a promised good or service to the customer, which could
occur over time or at a point in time.
1.8. Sale of goods
Revenue generated from the sale of
goods is recognised on delivery of the goods to the customer. On
this basis revenue is recognised at a point in time.
1.9. Sale of services
In relation to the design and
manufacture of complete software and hardware test solutions and
the provision of specialist surveying, revenue is recognised
through a review of the man-hours completed on the project at the
year-end compared to the total man-hours required to complete the
projects. Provision is made for all foreseeable losses if a
contract is assessed as unprofitable.
Revenue represents the amount of
consideration to which the Group expects to be entitled in exchange
for transferring promised goods or services to a customer,
excluding amounts collected on behalf of third parties.
Revenue from goods and services
provided to customers not invoiced as at the reporting date is
recognised as a contract asset and disclosed as accrued income
within trade and other receivables.
Although payment terms vary from
contract-to-contract invoices are in general raised in advance of
services performed. Where billing has exceeded the revenue
recognised in a period a contract liability is recognised and this
is disclosed as payments received on account in trade and other
payables.
1.10. Property, plant and equipment
Property, plant and equipment are
stated at cost less accumulated depreciation and accumulated
impairment losses. Depreciation is charged so as to write off the
cost of assets over their estimated useful lives, using the
straight-line method. The estimated useful lives, residual values
and depreciation method are reviewed at each year end, with the
effect of any changes in estimate accounted for on a prospective
basis. Assets held under leases are depreciated over their
expected useful lives on the same basis as owned assets or, where
shorter, the term of the relevant lease. Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised within the
Statement of Comprehensive Income.
The principal annual rates used to
depreciate property, plant and equipment are:
Equipment, fixtures and fittings
25%
Motor vehicles
25%
1.11. Inventories and work in progress
Inventories are stated at the
lower of cost and net realisable value. Costs, including an
appropriate portion of fixed and variable overhead expenses, are
assigned to inventories by the method most appropriate to the
particular class of inventory, with the majority being valued on a
first-in-first-out basis. Net realisable value represents the
estimated selling price for inventories less all estimated costs of
completion and costs necessary to make the sale.
Work in progress is valued at
cost, which includes expenses incurred on behalf of clients and an
appropriate proportion of directly attributable costs on incomplete
assignments. The value of work in progress is reduced where
appropriate to provide for irrecoverable costs
.
1.12. Financial assets
The Group's financial assets
consist of cash and cash equivalents and trade and other
receivables. The Group's accounting policy for each category of
financial asset is as follows:
Financial assets held at amortised
cost
Trade receivables and other
receivables are classified as financial assets held at amortised
cost. They are initially recognised at fair value plus transaction
costs that are directly attributable to their acquisition or issue
and are subsequently carried at amortised cost using the effective
interest rate method, less provision for impairment.
Impairment provisions are
recognised based on its historical credit loss experience, adjusted
for forward-looking factors specific to the debtors and the
economic environment, the amount of such a provision being the
difference between the net carrying amount and the present value of
the future expected cash flows associated with the impaired
receivable. For receivables, which are reported net, such
provisions are recorded in a separate allowance account with the
loss being recognised within administrative expenses in the
statement of comprehensive income. On confirmation that the
receivable will not be collectable, the gross carrying value of the
asset is written off against the associated provision.
The Group's financial assets held
at amortised cost comprise other receivables and cash and cash
equivalents in the statement of financial position.
Derecognition of financial
assets
The Group derecognises a financial
asset only when the contractual rights to the cash flows from the
asset expire; or it transfers the financial asset and substantially
all the risks and rewards of ownership of the asset to another
entity.
Equity instruments
An equity instrument is any
contract that evidences a residual interest in the assets of an
entity after deducting all of its liabilities. Equity instruments
issued by the Group are recorded at the proceeds received, net of
direct issue costs.
Financial liabilities
Financial liabilities, including
borrowings, are initially measured at fair value, net of
transaction costs. Financial liabilities are subsequently measured
at amortised cost using the effective interest method, with
interest expense recognised on an effective yield basis.
The effective interest method is a
method of calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant period. The
effective interest rate is the rate that exactly discounts
estimated future cash payments through the expected life of the
financial liability, or, where appropriate, a shorter
period.
Derecognition of financial
liabilities
The Group derecognises financial
liabilities when, and only when, the Group's obligations are
discharged, cancelled or they expire.
1.13. Leased/Right of Use assets
The leases liability is initially measured at the present value of
the remaining lease payments, discounted using the individual
entities incremental borrowing rate. The lease term comprises the
non-cancellable period of the contract, together with periods
covered by an option to extend the lease where the Group is
reasonably certain to exercise that option based on operational
needs and contractual terms. Subsequently, the lease liability is
measured at amortised cost by increasing the carrying amount to
reflect interest on the lease liability, and reducing it by the
lease payments made. The lease liability is remeasured when the
Group changes its assessment of whether it will exercise an
extension or termination option.
Right-of-use assets are initially measured at cost, comprising the
initial measurement of the lease liability adjusted for any lease
payments made at or before the commencement date, lease incentives
received and initial direct costs. Subsequently, right-of-use
assets are measured at cost, less any accumulated depreciation and
any accumulated impairment losses, and are adjusted for certain
remeasurement of the lease liability.
Depreciation is calculated on a
straight-line basis over the length of the lease. The Group has
elected to apply exemptions for short-term leases and leases for
which the underlying asset is of low value. For these leases,
payments are charged to the income statement on a straight-line
basis over the term of the relevant lease. Right-of-use assets are
presented within non-current assets on the face of the statement of
financial position, and lease liabilities are shown separately on
the statement of financial position in current liabilities and
non-current liabilities depending on the maturity of the lease
payments.
Under IFRS16, right-of-use assets
will be tested for impairment in accordance with IAS36 Impairment
of Assets.
Payments associated with
short-term leases are recognised on a straight-line basis as an
expense in the profit or loss. Short term leases are leases with a
lease term of 12 months or less.
1.14. Pension scheme contributions
Pension contributions are charged
to the statement of comprehensive income in the period in which
they fall due. All pension costs are in relation to defined
contribution schemes.
1.15. Share based payments
Equity-settled share-based
payments to employees and others providing similar services are
measured at the fair value of the equity instruments at the grant
date. Details regarding the determination of the fair value
of equity-settled share-based transactions are set out in note
18.
The fair value determined at the
grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the
Group's estimate of equity instruments that will eventually vest.
At each statement of financial position date, the Group revises its
estimate of the number of equity instruments expected to vest. The
impact of the revision of the original estimates, if any, is
recognised in profit or loss over the remaining vesting period,
with a corresponding adjustment to reserves.
1.16. Foreign currencies
Monetary assets and liabilities
denominated in foreign currencies are translated into sterling at
the rates of exchange ruling at 30 June. Transactions in foreign
currencies are recorded at the rates ruling at the date of the
transactions, and processed through the profit & loss
account.
1.17. Taxation
Income tax expense represents the
sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based
on taxable profit for the year. Taxable profit differs from profit
as reported in the consolidated statement of comprehensive income
because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are
never taxable or deductible. The Group's liability for current tax
is calculated using tax rates that have been enacted or
substantively enacted by the year end date.
Deferred tax
Deferred tax is recognised on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
statement of financial position liability method. Deferred tax
liabilities are generally recognised for all taxable temporary
differences, and deferred tax assets are generally recognised for
all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which those
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax liabilities are
recognised for taxable temporary differences associated with
investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of
the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary differences
associated with such investments and interests are only recognised
to the extent that it is probable that there will be sufficient
taxable profits against which to utilise the benefits of the
temporary differences and they are expected to reverse in the
foreseeable future.
The carrying amount of deferred
tax assets is reviewed at each statement of financial position date
and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part
of the asset to be recovered. Deferred tax assets and liabilities
are measured at the tax rates that are expected to apply in the
year in which the liability is settled or the asset realised, based
on tax rates (and tax laws) that have been enacted or substantively
enacted by the year end date. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would
follow from the manner in which the Group expects, at the reporting
date, to recover or settle the carrying amount of its assets and
liabilities.
Deferred tax assets and
liabilities are offset when there is a legally enforceable right to
set off current tax assets against current tax liabilities and when
they relate to income taxes levied by the same taxation authority
and the Group intends to settle its current tax assets and
liabilities on a net basis.
Current and deferred tax for the
year
Current and deferred tax are
recognised as an expense or income in the statement of
comprehensive income, except when they relate to items credited or
debited directly to equity, in which case the tax is also
recognised directly in equity.
1.18. Impairment of property, plant and
equipment
At each year end date, the Group
reviews the carrying amounts of its property, plant and equipment
to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where it is not
possible to estimate the recoverable amount of an individual asset,
the Group estimates the recoverable amount of the cash-generating
unit to which the asset belongs. Where a reasonable and consistent
basis of allocation can be identified, corporate assets are also
allocated to individual cash-generating units, or otherwise they
are allocated to the smallest group of cash-generating units for
which a reasonable and consistent allocation basis can be
identified.
Recoverable amount is the higher
of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows
have not been adjusted.
If the recoverable amount of an
asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An
impairment loss is recognised immediately in profit or
loss.
Where an impairment loss
subsequently reverses, the carrying amount of the asset (or
cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset (or
cash-generating unit) in prior years. A reversal of an impairment
loss is recognised immediately in the statement of comprehensive
income.
1.19. Research and development
The Group undertakes research and
development to expand its activity in technology and innovation to
develop new products that will begin directly generating revenue in
the future. Expenditure on research is expensed as incurred,
development expenditure is capitalised only if the criteria for
capitalisation are recognised in IAS 38. The Company claims tax
credits on its research and development activity and recognises the
income in current tax.
1.20. Government grants
During the period, the Group
received benefits from Government grants totalling £18,000 (2023:
0).
1.21. Critical judgement in applying accounting policies and
key sources of estimation uncertainty
The following are the critical
judgements and key sources of estimation uncertainty that the
directors have made in the process of applying the entity's
accounting policies and that have the most significant effect on
the amounts recognised in these financial statements.
Consolidation
The de-consolidation of QM Systems
Ltd is a critical judgement applied by the directors, please refer
to basis of consolidation note 1.4.
Impairment of goodwill
Determining whether goodwill is
impaired requires an estimation of the value in use of the
cash-generating units to which goodwill has been allocated. A
similar exercise is performed in respect of investment and
long-term loans in subsidiary.
The value in use calculation
requires the directors to estimate the future cash flows expected
to arise from the cash-generating unit and a suitable discount rate
in order to calculate present value, see note 11 for further
details.
The carrying amount of goodwill at
the year-end date was £ nil (2023: £679,000). The investment
in subsidiaries at the year-end was £ nil (2023:
£988,000).
The methodology adopted in
assessing impairment of Goodwill is set out in note 11 as is the
sensitivity analysis applied in relation to the outcomes of the
assessment.
Impairment investment in
subsidiaries and inter-company receivables
As set out in note 12, an
impairment assessment of the carrying value of investments in
subsidiaries and inter-company receivables is in line with the
methodologies adopted in the assessment of impairment of
goodwill.
Going concern
The preparation of cash flow
forecasts for the Group requires estimates to be made of the
quantum and timing of cash receipts from future commercial revenues
and the timing of future expenditure, all of which are subject to
uncertainty, see Basis of preparation - Going concern note
1.3
2
Segmental analysis
|
|
|
2024
£'000
|
|
2023
£'000
|
|
|
|
|
|
|
|
|
Turnover by geographical market
|
|
|
|
|
|
United Kingdom
|
8,739
|
|
6,076
|
|
|
Europe
|
82
|
|
162
|
|
|
Other
|
317
|
|
232
|
|
|
|
9,138
|
|
6,470
|
|
|
The Group operates out of one
geographical location being the UK. Accordingly, the primary
segmental disclosure is based on activity. Per IFRS 8 operating
segments are based on internal reports about components of the
Group, which are regularly reviewed and used by Chief Operating
Decision Maker ("CODM"), the current executive chairman, for
strategic decision making and resource allocation, in order to
allocate resources to the segment and to assess its performance.
The Group's reportable operating segments are as
follows:
· Adien Limited - Utility detection and mapping services - Sale
of services
· Utsi
Electronics Limited - Development, assembly and sale of GPR
equipment - Sale of goods
· QM
Systems Ltd - Automation and test system solutions - No longer
trading, in administration
· Thomson Engineering Design Limited - Rail trackside solutions
(included in the test system solutions segment) - Sale of
services
· Wessex Precision Instruments Limited - Non
trading
The CODM monitors the operating
results of each segment for the purpose of performance assessments
and making decisions on resource allocation. Performance is based
on revenue generations and profit before tax, which the CODM
believes are the most relevant in evaluating the results relative
to other entities in the industry.
Information regarding each of the
operations of each reportable segment is included below, all
non-current assets owned by the Group are held in the
UK.
|
|
|
|
Utility detection and
mapping services
|
Development, assembly and
sale of GPR equipment
|
Automation and test system
solutions
|
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
|
|
|
Year ended 30 June 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segmental revenue
|
1,448
|
330
|
7,360
|
|
9,138
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) / profit
|
85
|
154
|
(1,454)
|
|
(1,215)
|
|
|
Finance costs
|
(35)
|
(335)
|
(54)
|
|
(424)
|
|
|
(Loss) / Profit before
taxation
|
50
|
(181)
|
(1,508)
|
|
(1,639)
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
497
|
322
|
1,112
|
|
1,931
|
|
|
|
|
|
|
|
|
|
|
Segment liabilities
|
579
|
6,319
|
1,220
|
|
8,118
|
|
|
|
|
|
|
|
|
|
|
Non-current asset
additions
|
48
|
-
|
47
|
|
95
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortisation
|
60
|
18
|
541
|
|
619
|
|
|
|
Utility detection and
mapping services
|
Development, assembly and
sale of GPR equipment
|
Automation and test system
solutions
|
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
|
|
|
Year ended 30 June 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segmental revenue
|
1,125
|
169
|
5,176
|
|
6,470
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) / profit
|
(214)
|
(859)
|
(1,826)
|
|
(2,899)
|
|
|
Finance costs
|
(39)
|
(236)
|
(110)
|
|
(385)
|
|
|
(Loss) / Profit before
taxation
|
(253)
|
(1,095)
|
(1,936)
|
|
(3,284)
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
558
|
1,181
|
6,000
|
|
7,739
|
|
|
|
|
|
|
|
|
|
|
Segment liabilities
|
734
|
5,025
|
7,631
|
|
13,390
|
|
|
|
|
|
|
|
|
|
|
Non-current asset
additions
|
2
|
-
|
265
|
|
267
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortisation
|
80
|
17
|
482
|
|
579
|
3
Finance costs
|
|
|
2024
£'000
|
|
2023
£'000
|
|
|
|
|
|
|
|
|
Interest payable
|
424
|
|
385
|
|
|
|
424
|
|
385
|
|
|
|
|
|
|
|
|
Interest payable comprises interest on:
|
|
|
|
|
|
Leases
|
23
|
|
107
|
|
|
Directors' loans
|
259
|
|
192
|
|
|
Other
|
142
|
|
86
|
|
|
|
424
|
|
385
|
4
Operating profit for the year
|
|
This is arrived at after charging
for the Group:
|
|
|
|
2024
£'000
|
|
2023
£'000
|
|
|
|
|
|
|
|
|
Research and development costs not
capitalised
|
602
|
|
2,644
|
|
|
Depreciation
Impairment of goodwill
|
619
163
|
|
579
678
|
|
|
|
|
|
|
|
|
Auditor's remuneration
|
|
|
|
|
|
Fees payable to the Company's
auditor for the audit of the Group's financial
statements
|
53
|
|
53
|
|
|
Fees payable to the Company's
auditor and its subsidiaries for the provision of tax
services
|
-
|
|
8
|
|
|
|
|
|
|
|
|
The Company's audit fee is £29,000
(2023: £23,000).
|
5
Staff costs
|
|
Group
|
|
|
2024
|
|
2023
|
|
|
|
|
|
No.
|
|
No.
|
|
|
Average monthly number of
employees, including directors:
|
|
|
|
|
|
|
|
Production and research
|
|
|
89
|
|
77
|
|
|
Selling and research
|
|
|
9
|
|
9
|
|
|
Administration
|
|
|
10
|
|
12
|
|
|
|
|
|
108
|
|
98
|
|
|
Group
|
|
|
2024
|
|
2023
|
|
|
|
|
|
£'000
|
|
£'000
|
|
|
Staff costs, including
directors:
|
|
|
|
|
|
|
|
Wages and salaries
|
|
|
4,313
|
|
3,602
|
|
|
Social security costs
|
|
|
414
|
|
376
|
|
|
Other pension costs
|
|
|
227
|
|
198
|
|
|
|
|
|
4,954
|
|
4,176
|
|
|
Company
|
|
|
2024
|
|
2023
|
|
|
|
|
|
No.
|
|
No.
|
|
|
Average monthly number of
employees, including directors:
|
|
|
|
|
|
|
|
Selling and research
|
|
|
-
|
|
-
|
|
|
Administration
|
|
|
1
|
|
1
|
|
|
|
|
|
1
|
|
1
|
|
|
Company
|
|
|
2024
|
|
2023
|
|
|
|
|
|
£'000
|
|
£'000
|
|
|
Staff costs, including
directors:
|
|
|
|
|
|
|
|
Wages and salaries
|
|
|
82
|
|
87
|
|
|
Social security costs
|
|
|
-
|
|
-
|
|
|
Other pension costs
|
|
|
-
|
|
-
|
|
|
|
|
|
82
|
|
87
|
6
Directors' remuneration
|
|
|
Salary
and fees
|
Benefits
in kind
|
2024
Total
|
|
2023
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
|
|
|
G G Watt
|
71
|
-
|
71
|
|
71
|
|
|
R MacDonnell
|
2
|
-
|
2
|
|
2
|
|
|
T Williams
|
9
|
-
|
9
|
|
6
|
|
|
Aggregate emoluments
|
82
|
-
|
82
|
|
79
|
|
|
|
|
|
|
|
|
|
|
Directors' pensions
|
|
|
2024
|
|
2023
|
|
|
|
|
|
No.
|
|
No.
|
|
|
The number of directors who are
accruing retirement benefits under:
|
|
|
|
|
|
|
|
Defined contributions
policies
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
The directors represent key
management personnel.
Refer to note 18 for details of
directors share options.
|
7
Taxation
|
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
£'000
|
|
£'000
|
|
|
United Kingdom Corporation Tax
|
|
|
|
|
|
|
|
Current taxation
|
|
|
(68)
|
|
(800)
|
|
|
Adjustments in respect of prior
years
|
|
|
120
|
|
-
|
|
|
|
|
|
52
|
|
(800)
|
|
|
|
|
|
|
|
|
|
|
Deferred taxation
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Tax on loss
|
|
|
52
|
|
(800)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current tax reconciliation
|
|
|
|
|
|
|
|
Taxable loss for the
year
|
|
|
(1,639)
|
|
(3,284)
|
|
|
|
|
|
|
|
|
|
|
Theoretical tax at UK corporation
tax rate 19% (2023: 19%)
|
|
|
(383)
|
|
(622)
|
|
|
|
|
|
|
|
|
|
|
Effects of:
|
|
|
|
|
|
|
|
R&D
tax credit
adjustments
|
|
|
(38)
|
|
(408)
|
|
|
Fixed
asset timing differences
|
|
|
4
|
|
28
|
|
|
Not
deductible for tax purposes
Impairment of goodwill
|
|
|
259
(31)
|
|
3
129
|
|
|
Deferred
tax not recognised
|
|
|
229
|
|
73
|
|
|
Adjustments in respect of prior years
|
|
|
120
|
|
-
|
|
|
Utilisation of losses
|
|
|
1
|
|
(4)
|
|
|
Short
term timing differences
|
|
|
(109)
|
|
1
|
|
|
Total income tax credit
|
|
|
52
|
|
(800)
|
|
|
|
|
|
|
|
|
|
|
The Group has tax losses amounting
to approximately £3,807,000 (2023: £3,423,000), available for carry
forward to set off against future trading
profits. No deferred tax assets have been
recognised in these financial statements due to the uncertainty
regarding future taxable profits.
Potential deferred tax assets not
recognised are approximately £723,000 (2023: £650,000).
|
8
Loss / profit per share
|
|
Group
Basic (pence per share) 2024 - Loss (2.26) per
share; 2023 - Loss (6.84) per
share
This has been calculated on a loss
of £821,000 (2023: Loss £2,484,000) and the number of shares used
was 36,312,823 (2023: 36,312,823) being the weighted average number
of shares in issue during the year.
Diluted (pence per share) 2024 - (2.26) loss per
share; 2023 - (6.84) loss per
share
In the current year the potential
ordinary shares included in the weighted average of shares are
anti-dilutive and therefore diluted earnings per share is equal to
basic earnings per share.
|
9
Property, plant and equipment
|
|
Group
|
Freehold
|
Equipment, fixtures and
fittings
|
Leasehold
improvements
|
Motor
vehicles
|
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
£'000
|
|
|
Cost
|
|
|
|
|
|
|
|
|
At 1 July 2023
|
426
|
1,376
|
529
|
172
|
|
2,503
|
|
|
Additions
Transfer from right of use
assets
|
-
|
41
-
|
9
|
-
142
|
|
50
142
|
|
|
Disposals
QM Assets Impaired
|
(51)
-
|
(278)
|
(517)
|
(22)
-
|
|
(73)
(795)
|
|
|
At 30 June 2024
|
375
|
1,139
|
21
|
292
|
|
1,827
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
At 1 July 2023
|
50
|
1,242
|
256
|
172
|
|
1,720
|
|
|
Charged in year
|
5
|
65
|
98
|
2
|
|
170
|
|
|
Disposals
Transfer from right of use
assets
|
(51)
-
|
-
-
|
-
-
|
(22)
142
|
|
(73)
142
|
|
|
QM Assets Impaired
|
-
|
(220)
|
(354)
|
(5)
|
|
(579)
|
|
|
At 30 June 2024
|
4
|
1,087
|
-
|
289
|
|
1,380
|
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
|
|
|
|
|
|
|
At 30 June 2024
|
371
|
52
|
21
|
3
|
|
447
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June 2023
|
376
|
134
|
273
|
-
|
|
783
|
|
|
|
|
|
|
|
|
| |
10
Right of use
|
|
Group
|
Property
|
Equipment, fixtures and
fittings
|
Leasehold
improvements
|
Motor
vehicles
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Cost
|
|
|
|
|
|
|
|
At 1 July 2023
|
2,580
|
392
|
168
|
147
|
3,287
|
|
|
Additions
Transfer to motor
vehicles
|
-
-
|
57
-
|
-
-
|
18
(142)
|
75
(142)
|
|
|
Disposal
|
(2,388)
|
-
|
-
|
-
|
(2,388)
|
|
|
At 30 June 2024
|
192
|
449
|
168
|
23
|
832
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
At 1 July 2023
|
595
|
219
|
54
|
136
|
1,004
|
|
|
Charged in year
Transfer to motor
vehicles
|
293
-
|
105
-
|
39
-
|
12
(142)
|
449
(142)
|
|
|
Disposal
|
(822)
|
91
|
63
|
-
|
(668)
|
|
|
At 30 June 2024
|
66
|
415
|
156
|
6
|
643
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
|
|
|
|
|
|
At 30 June 2024
|
126
|
34
|
12
|
17
|
189
|
|
|
|
|
|
At 30 June 2023
|
1,985
|
173
|
114
|
11
|
2,283
|
These assets have been offered as
security in respect of these lease agreements. Depreciation
charged in the period on those assets amounted to £449,000 (2023:
£422,000)
11
Goodwill
|
|
Group
|
|
|
|
|
Goodwill
£'000
|
|
Total
£'000
|
|
|
Cost
|
|
|
|
|
|
|
|
|
|
At 1 July 2023
|
|
|
|
|
1,357
|
|
1,357
|
|
|
Additions
|
|
|
|
|
-
|
|
-
|
|
|
At 30 June 2024
|
|
|
|
|
1,357
|
|
1,357
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment
|
|
|
|
|
|
|
|
|
|
As at 30 June 2023
Additional impairment
|
|
|
|
|
(678)
(679)
|
|
(678)
(679)
|
|
|
Net book value
|
|
|
|
|
|
|
|
|
|
At 30 June 2024
|
|
|
|
|
-
|
|
-
|
|
|
At 30 June 2023
|
|
|
|
|
679
|
|
679
|
|
|
The goodwill brought forward in the
statement of financial position at 30 June 2023 was £679,000 this
has been impaired to £nil following the failure of QM Systems Ltd,
and an extremely cautious approach to both Adien Ltd and Utsi
Ltd.
We consider the CGUs to be the
entities as acquired under business combinations and managed as
separate legal entities, each representing a separately
identifiable and independent group of assets contributing to the
cash flows of the CGU.
· Adien
Limited specialises in leading edge detection systems in the field
of utilities detection.
· Thomson Engineering Design produces an unparalleled range of
machines, attachments and tools for railway track
maintenance.
· Utsi
design & manufacturer of innovative Ground Penetrating Radar
(GPR) systems which are used for commercial and
Industrial applications, all over the world.
The Group tests goodwill annually
for impairment or more frequently if there are indicators that it
might be impaired.
The recoverable amounts are
determined from value in use calculations which use cash flow
projections based on financial budgets approved by the directors
covering a five-year period and calculation of the terminal
values. The key assumptions are those regarding the discount
rates, growth rates and expected changes to sales and direct
costs due to inflationary pressures during the period.
Management estimates discount rates using pre-tax rates that
reflect current market assessments of the time value of money and
the risks specific to the business. This has been estimated
at 17.2% per annum based on weighted average cost of
capital.
The growth rate assumptions are
based on management forecasts as below.
· Adien
- These have been assessed as 14% growth for revenue in year 1 with
5% in year 2+3 and 3% for years thereafter.
· UTSI
and PipeHawk combined these have been assessed as 9% for growth for
revenue in year 1 and 59% for year 2, with the following 2 years at
3%.
· TED -
The distribution agreement with Unipart has now commenced, along
with CP7 and therefore the forecasts are based on a 129% growth for
year 1, 20% in year 2, 15% in year 3 and 7% in years 4 and 3% in
year 5.
|
12
Non-current investments
|
|
Company
Investment in subsidiaries
|
|
|
Investment in
subsidiaries
|
|
Total
|
|
|
|
|
|
£'000
|
|
£'000
|
|
|
Cost
|
|
|
|
|
|
|
|
At 1 July 2023
|
|
|
1,903
|
|
1,903
|
|
|
Additions
|
|
|
-
|
|
-
|
|
|
At 30 June 2024
|
|
|
1,903
|
|
1,903
|
|
|
|
|
|
|
|
|
|
|
Impairment
|
|
|
|
|
|
|
|
Provided at 30 June
2023
Additional impairment
|
|
|
(915)
(988)
|
|
(915)
(988)
|
|
|
Net book value
|
|
|
|
|
|
|
|
At 30 June 2024
|
|
|
-
|
|
-
|
|
|
At 30 June 2023
|
|
|
988
|
|
988
|
|
|
|
|
|
|
|
|
|
|
Subsidiary
|
Parent and Group interest in
ordinary shares and voting rights
|
Country of
incorporation
|
Principal activity
|
|
|
|
|
|
|
|
|
Adien Ltd
|
100%
|
England
& Wales
|
Specialist surveying
|
|
|
Thomson Engineering Design
Ltd
|
100%
|
England
& Wales
|
Specialist in railway
equipment
|
|
|
Wessex Precision Instruments
Ltd
|
100%
|
England
& Wales
|
Slip test solutions
|
|
|
Utsi Electronics Ltd
|
100%
|
England
& Wales
|
GPR equipment
|
|
|
Wessex Test Equipment
Ltd
|
100%
|
England
& Wales
|
Dormant
|
|
|
CE Marking Services Ltd
QM Systems Ltd (in
administration)*
|
100%
100%
|
England
& Wales
England
& Wales
|
Dormant
Test solutions
|
|
|
An impairment assessment was
performed in line with the assessment of goodwill, see note 11 for
further details.
The registered office of all of the
above named subsidiaries, except Adien Ltd and Utsi Electronics Ltd
is Units 2a & 3 Crabtree Road, Forest Vale Industrial Estate,
Cinderford, Gloucestershire, United Kingdom, GL14 2YQ.
The registered office of Adien Ltd
is Derek Lewis Building, Millfield Ind Estate, Bentley, Doncaster,
DN5 0SJ
The registered office of Utsi
Electronics Ltd is Unit 26, Glenmore Business Park, Ely Road,
Waterbeach, Cambridge, Cambridgeshire, CB25 9PG.
*As noted in the post balance
sheet events note, QM Systems Limited has entered into
administration, please refer to Chairman's statement for
details.
|
13
Inventories
|
|
|
Group
|
|
Company
|
|
|
|
2024
£'000
|
2023
£'000
|
|
2024
£'000
|
2023
£'000
|
|
|
Raw materials
|
0
|
106
|
|
-
|
-
|
|
|
Finished goods
|
113
|
147
|
|
-
|
-
|
|
|
|
113
|
253
|
|
-
|
-
|
|
|
The replacement cost of the above
inventories would not be significantly different from the values
stated.
The cost of inventories recognised
as an expense during the year amounted to £2,709,000 (2023:
£2,294,000). For the Parent company this was £nil (2023:
£nil).
|
14
Trade and other receivables
|
|
|
Group
|
|
Company
|
|
|
|
2024
£'000
|
2023
£'000
|
|
2024
£'000
|
2023
£'000
|
|
|
Current
|
|
|
|
|
|
|
|
Trade receivables
|
504
|
1,263
|
|
-
|
-
|
|
|
Amounts owed by Group undertakings
less provision
|
-
|
-
|
|
9
|
9
|
|
|
Other Debtors
|
125
|
374
|
|
-
|
2
|
|
|
Accrued income
|
235
|
190
|
|
-
|
-
|
|
|
Prepayments
|
143
|
940
|
|
-
|
-
|
|
|
|
1,007
|
2,767
|
|
9
|
11
|
15
Trade and other payables
|
|
|
Group
|
|
Company
|
|
|
|
2024
£'000
|
2023
£'000
|
|
2024
£'000
|
2023
£'000
|
|
|
Current
|
|
|
|
|
|
|
Trade payables
|
406
|
1,197
|
|
55
|
34
|
|
|
Other taxation and social
security
|
370
|
1,002
|
|
13
|
-
|
|
|
Payments received on
account
|
389
|
2,164
|
|
-
|
-
|
|
|
Accruals and other
creditors
|
209
|
1,029
|
|
61
|
103
|
|
|
|
1,374
|
5,392
|
|
129
|
137
|
|
|
|
Group
|
|
Company
|
|
|
|
2024
£'000
|
2023
£'000
|
|
2024
£'000
|
2023
£'000
|
|
|
Non-current
|
|
|
|
|
|
|
Amounts owed to Group
undertakings
|
-
|
-
|
|
310
|
2,002
|
|
|
Other creditors
|
121
|
-
|
|
-
|
-
|
|
|
|
121
|
-
|
|
310
|
2,002
|
|
|
The performance obligations of the
IFRS 15 contract liabilities (payments received on account) are
expected to be met within the next financial year. The brought
forward payments received on account figure was £2,164,000, during
the financial year 2024 £2,164,000 has been recognised as revenue
in the statement of comprehensive income.
|
16
Borrowing analysis
|
|
|
Group
|
|
Company
|
|
|
|
2024
£'000
|
2023
£'000
|
|
2024
£'000
|
2023
£'000
|
|
|
|
|
|
|
|
|
|
Due within one year
|
|
|
|
|
|
|
|
Bank and other loans
|
783
|
677
|
|
578
|
379
|
|
|
Directors' loan
|
2,035
|
1,783
|
|
2,035
|
1,783
|
|
|
Obligations under lease
agreements
|
111
|
426
|
|
-
|
-
|
|
|
|
2,929
|
2,886
|
|
2,613
|
2,162
|
|
|
|
|
|
|
|
|
|
|
Due after more than one year
|
|
|
|
|
|
|
|
Bank and other loans
|
342
|
350
|
|
240
|
221
|
|
|
Directors' loan
|
3,342
|
2,501
|
|
3,342
|
2,501
|
|
|
Obligations under lease
agreements
|
96
|
2,062
|
|
-
|
-
|
|
|
|
3,780
|
4,913
|
|
3,582
|
2,722
|
|
|
|
|
|
|
|
|
|
|
Repayable
|
|
|
|
|
|
|
|
Due within 1 year
|
2,929
|
2,886
|
|
2,613
|
2,162
|
|
|
Over 1 year but less than 2
years
|
3,652
|
3,040
|
|
3,522
|
2,611
|
|
|
Over 2 years but less than 5
years
|
128
|
1,873
|
|
60
|
111
|
|
|
|
6,709
|
7,799
|
|
6,195
|
4,884
|
Directors' loans
Included with Directors' loans and
borrowings due within one year are accrued fees and interest owing
to G.G Watt of £2,035,000 (2023: £1,783,000). The accrued fees and
interest are repayable on demand and no interest accrues on the
balance.
The director's loan due in more
than one year is a loan of £3,342,000 from G.G Watt.
Directors' loans comprise of two elements. A loan attracting
interest at 2.15% over Bank of England base rate. At the
year-end £2,342,000 (2023: £1,501,000) was outstanding in relation
to this loan. During the year to 30 June 2024 £543,000 (2023:
£393,000) was repaid. The Company has the right to defer
payment for a period of 366 days.
On 13 August 2010 the Company
issued £1 million of Convertible Unsecured Loan Stock ("CULS") to
G.G Watt, the Chairman of the Company. The CULS were issued
to replace loans made by G.G Watt to the Company amounting to £1
million and has been recognised in non-current liabilities of
£3,342,000.
Pursuant to amendments made on 13
November 2014, 9 November 2018 and 30 June 2022 the principal terms
of the CULS are as follows:
- The CULS
may be converted at the option of Gordon Watt at a price of 5p per
share at any time prior to 13 August 2026;
- Interest
is payable at a rate of 10 per cent per annum on the principal
amount outstanding until converted, prepaid or repaid, calculated
and compounded on each anniversary of the issue of the CULS.
On conversion of any CULS, any unpaid interest shall be paid within
20 days of such conversion;
- The CULS
are repayable, together with accrued interest on 13 August 2026
("the Repayment Date").
No equity element of the
convertible loan stock was recognised on issue of the instrument as
it was not considered to be material.
|
|
Bank and other loans
Included in bank and other loans is
an invoice discounting facility of £170,766 (2023:
£261,962). The principal terms of which are
interest at 2.58% over Bank of England base rate and secured on the
company's debtors.
Included in bank and other loans is
a secured mortgage of £93,569 which incurs an interest rate of
2.44% over base rate for 10 years and at a rate of 2.64% over base
thereafter.
As a result of COVID 19,
Coronavirus Business Interruption Loan Scheme (CBILS) became
available for the business. This enabled the group to secure two
loans. The loan for £400,000 had a remaining balance outstanding of
£153,000, and the second loan of £150,000 had a remaining balance
outstanding of £68,000, both at a rate of 2.96%. The amount of
interest paid during the Financial Year was £18,898.
The business was also able to
secure a Bounce Back loan through Wessex Precision Engineering of
£24,000 the remaining balance outstanding is £14,000, and Utsi
obtained £50,000 bounce back loan the remaining balance outstanding
is £29,000 both with an interest rate of 2.5%.
|
|
|
|
|
|
2024
|
Bought
forward
|
Cash flows
|
Non-cash:
Lease release /
disposal
|
Non-cash:
New
leases
|
Non-cash:
Accrued fees
/interests
|
Carried
forward
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Director loan
|
4,284
|
769
|
-
|
-
|
323
|
5,376
|
|
|
Leases
|
2,487
|
(572)
|
(1,873)
|
75
|
90
|
207
|
|
|
Other
|
1,028
|
30
|
-
|
-
|
68
|
1,126
|
|
|
Loans and borrowings
|
7,799
|
227
|
(1,873)
|
75
|
481
|
6,709
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
Bought
forward
|
Cash flows
|
Non-cash:
Lease release /
disposal
|
Non-cash:
New
leases
|
Non-cash:
Accrued
fees/interests
|
Carried
forward
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Director loan
|
4,446
|
(393)
|
-
|
-
|
231
|
4,284
|
|
|
Leases
|
2,692
|
(455)
|
-
|
156
|
94
|
2,487
|
|
|
Other
|
1,201
|
(210)
|
-
|
-
|
37
|
1,028
|
|
|
Loans and borrowings
|
8,339
|
(1,058)
|
-
|
156
|
362
|
7,799
|
|
|
|
|
|
|
|
|
|
17 Financial instruments
|
|
The Group uses financial
instruments, which comprise cash and various items, such as trade
receivables and trade payables that arise from its
operations. The main purpose of these financial instruments
is to finance the Group's operations.
The main risks arising from the
Group's financial instruments are credit risk, liquidity risk and
interest rate risk. A number of procedures are in place to
enable these risks to be controlled. For liquidity risk these
include profit/cash forecasts by business segment, quarterly
management accounts and comparison against forecast. The
board reviews and agrees policies for managing this risk on a
regular basis.
Credit risk
The credit risk exposure is the
carrying amount of the financial assets as shown in note 14 (with
the exception of prepayments which are not financial assets) and
the exposure to the cash balances. Of the amounts owed to the
Group at 30 June 2024, the top 3 customers comprised 41% (2023:
30%) of total trade receivables.
The Group has adopted a policy of
only dealing with creditworthy counterparties and the Group uses
its own trading records to rate its major customers, also the Group
invoices in advance where possible. The Group's exposure and the
credit ratings of its counterparties are continuously monitored and
the aggregate value of transactions concluded is spread amongst
approved counterparties. Having regard to the credit
worthiness of the Groups significant customers the directors
believe that the Group does not have any significant credit risk
exposure to any single counterparty.
Within revenue there are two
customers which individually represent 11.8% and 9.1% of the
overall revenue for the financial year, this compared to 13.6% and
11.36% in the previous financial year.
|
|
|
An analysis of trade and other
receivables:
|
|
|
2024
|
|
|
Weighted average loss
rate
|
Gross
carrying
value
|
Impairment loss
allowance
|
|
|
|
|
|
£'000
|
£'000
|
£'000
|
|
|
Performing
|
|
|
0.00%
|
1,007
|
-
|
|
|
2023
|
|
|
Weighted average loss
rate
|
Gross carrying
value
|
Impairment loss
allowance
|
|
|
|
|
|
|
|
£'000
|
£'000
|
|
|
|
Performing
|
|
|
0.00%
|
2,767
|
-
|
|
|
|
Interest rate risk
The Group finances its operations
through a mixture of shareholders' funds and borrowings. The
Group borrows exclusively in Sterling and principally at fixed and
floating rates of interest and are disclosed at note 16.
As disclosed in note 16 the Group
is exposed to changes in interest rates on its borrowings with a
variable element of interest. If interest rates were to increase by
one percentage point the interest charge would be £23,000
higher. An equivalent decrease would be incurred if interest
rates were reduced by one percentage point.
Liquidity risk
As stated in note 1 the Executive
Chairman, G.G Watt, has pledged to provide ongoing financial
support for a period of at least twelve months from the approval
date of the Group statement of financial position. It is on this
basis that the directors consider that neither the Group nor the
Company is exposed to a significant liquidity
risk.
|
|
|
Contractual maturity analysis for
financial liabilities:
|
|
|
2024
|
Less
than
1
year
|
Due
between
1-2
years
|
Due
between
2 - 5+
years
|
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
|
£'000
|
|
|
Trade and other
payables
|
1,374
|
121
|
-
|
|
1,495
|
|
|
Borrowings
Lease liability
|
2,818
111
|
3,614
96
|
70
-
|
|
6,502
207
|
|
|
|
4,303
|
3,831
|
70
|
|
8,204
|
|
|
|
|
|
|
|
|
|
|
2023
|
Less
than
1
year
|
Due
between
1-2
years
|
Due
between
2 - 5+
years
|
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
|
£'000
|
|
|
Trade and other
payables
|
1,734
|
-
|
-
|
|
1,734
|
|
|
Borrowings
Lease liability
|
2,514
426
|
2,594
393
|
204
1,668
|
|
5,312
2,487
|
|
|
|
4,674
|
2,987
|
1,872
|
|
9,533
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities of the
Company are all due within less than three months with the
exception of the intercompany balances that are due between 1 and 5
years.
|
|
|
Fair value of financial
instruments
Loans and receivables are measured
at amortised cost. Financial liabilities are measured at
amortised cost using the effective interest method. The directors
consider that the fair value of financial instruments are not
materially different to their carrying values.
Capital risk management
The Group's objectives when
managing capital are to safeguard the Group's ability to continue
as a going concern in order to be able to move to a position of
providing returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital.
The Group manages trade debtors,
trade creditors and borrowings and cash as capital. The entity is
meeting its objective for managing capital through continued
support from G G Watt as described per note 1.
|
18
Share capital
|
|
|
2024
|
2024
|
|
2023
|
2023
|
|
|
|
No.
|
£'000
|
|
No.
|
£'000
|
|
|
|
|
|
|
|
|
|
|
Authorised
|
|
|
|
|
|
|
|
Ordinary shares of 1p
each
|
40,000,000
|
400
|
|
40,000,000
|
400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allotted and fully paid
|
|
|
|
|
|
|
|
Brought forward
|
36,312,823
|
363
|
|
36,312,823
|
363
|
|
|
Issued during the year
|
-
|
-
|
|
-
|
-
|
|
|
Carried forward
|
36,312,823
|
363
|
|
36,312,823
|
363
|
|
|
|
|
|
|
|
|
|
|
Fully paid ordinary shares carry
one vote per share and carry a right to dividends.
12,893,703 (2023: 12,953,703) share
options were outstanding at the year end, comprising the 2,040,000
employee options and the 10,853,703 share options and warrants held
by directors disclosed below.
Share based payments have been
included in the financial statements where they are material.
No share-based payment expense has been recognised (2023 :
nil).
No deferred tax asset has been
recognised in relation to share options due to the uncertainty of
future available profits.
The director and employee share
options were issued as part of the Group's strategy on key employee
remuneration, they lapse if the employee ceases to be an employee
of the Group during the vesting period.
|
|
|
Date options exercisable
|
|
|
Number of
shares
|
|
Exercise
price
|
|
|
|
|
|
|
|
|
|
|
Between November 2019 and November
2026
Between November 2020 and November
2027
|
|
|
400,000
100,000
|
|
3.875p
3.75p
|
|
|
Between March 2024 and March
2031
Between January 2026 and January
2033
|
|
|
1,290,000
1,400,000
|
|
8.00p
14.25p
|
|
|
|
|
|
|
|
|
|
|
Directors' share options
|
|
|
|
Number of
options
|
|
|
|
|
|
Directors' share options
|
At
start
of
year
|
Granted
during the year
|
Lapsed
during the year
|
At end
of year
|
|
Exercise
price
|
Date
from
which
exercisable
|
|
|
|
|
|
|
|
|
|
|
|
|
G G Watt
|
750,000
|
-
|
-
|
750,000
|
|
8.0p
|
18 Mar
2024
|
|
|
R MacDonnell
|
200,000
|
-
|
-
|
200,000
|
|
8.0p
|
18 Mar
2024
|
|
|
T Williams
|
200,000
|
-
|
-
|
200,000
|
|
14.25p
|
10 Jan
2026
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's share price at 30
June 2024 was 8.50p. The high and low during the period under
review were 13.00p and 5.25p respectively.
In addition to the above, in
consideration of loans made to the Company, G.G Watt has warrants
over 3,703,703 ordinary shares at an exercise price of 13.5p and a
further 6,000,000 ordinary shares at an exercise price of
3.0p.
The weighted average contractual
life of share options outstanding at the year-end is 6.86 years
(2023: 7.72 years).
|
|
|
|
|
|
|
|
| |
19
Related party transactions
|
|
Directors' loan disclosures are
given in note 16. The interest payable to directors in
respect of their loans during the year was:
G.G Watt - £251,419
The directors are considered the
key management personnel of the Company. Remuneration to
directors is disclosed in note 6.
|
|
|
Included within the amounts due
from and to Group undertakings were the following
balances:
|
|
|
|
|
2024
£
|
|
2023
£
|
|
|
Balance due from:
|
|
|
|
|
|
|
Thomson Engineering
Design Limited
|
|
391,898
|
|
679,649
|
|
|
Wessex Precision
Engineering Limited
|
|
8,520
|
|
8,520
|
|
|
|
|
|
|
|
|
|
Balance due to:
|
|
|
|
|
|
|
Adien Limited
|
|
16,614
|
|
99,278
|
|
|
QM Systems
Limited
|
|
-
|
|
1,702,813
|
|
|
Utsi Electronics Limited
|
|
256,897
|
|
200,001
|
|
|
These intergroup balances vary
through the flow of working capital requirements throughout the
Group as opposed to intergroup trading. The balance due from TED
£391,898 has been provided for based on a review of recoverability
of intercompany balances.
|
|
|
|
|
|
|
|
| |
|
|
There is no ultimate controlling
party of PipeHawk plc.
|
|
|
Other related party transactions
|
|
|
|
2024
£
|
|
2023
£
|
|
Balance due to:
|
|
|
|
|
|
Online
Engineering Systems Ltd
|
|
200,216
|
|
-
|
|
|
|
|
|
|
| |
20
Government grants
|
|
A government grant was recognised
during the period:
|
|
|
|
Group
|
|
Company
|
|
|
|
2024
£'000
|
2023
£'000
|
|
2024
£'000
|
2023
£'000
|
|
|
|
|
|
|
|
|
|
Grant
|
18
|
-
|
|
-
|
-
|
|
|
|
18
|
-
|
|
-
|
-
|
21
Post Balance Sheet Events
|
|
On 16th July 2024 QM Systems Ltd,
the Group's largest subsidiary, was placed into Administration (for
further details see the Chairman's Statement). The events giving
rise to this happened immediately after the year end. Because this
has such a material effect on the Group's balance sheet, as
explained in note 1.4, the directors have reflected the full
implications of the Administration in the Group's consolidated
balance sheet at 30 June 2024. This, the directors believe, fairly
reflects the status of the Group as it moves forward into the
current financial year.
|
22
Copies of Reports and Accounts
|
|
Copies of the Report and Accounts
will be posted to shareholders later today and will be available
from the Company's registered office, 2a & 3 Crabtree Road,
Forest Vale Industrial Estate, Cinderford, England, GL14 2YQ and
from the Company's website www.pipehawk.com.
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23
Notice of Annual General Meeting
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The Report and Accounts will
include a notice that the annual general meeting will be held at
the offices of Allenby Capital Limited at 5th floor, 5 St Helen's
Place, London, EC3A 6AB at 11:30 am on 19 December 2024.
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