PipeHawk’s H1 FY26: sales down 45%, swing to loss, and Adien to be wound up
PipeHawk’s interim numbers for the six months to 31 December 2025 make for a tough read. Turnover fell to £1,144,000 – down 45% year on year – and the Group posted a loss before tax of £573,000, versus a £30,000 profit in the prior period. Management pins the blame on customers delaying orders in a jittery economic and political environment, while costs have generally risen.
There are green shoots – notably expected orders at Thomson Engineering Design (TED), product progress, and a potential sale of Utsi – but the near-term picture is dominated by tight cash, heavy borrowings, and the insolvency of Adien.
Headline numbers investors need to know
| Metric | H1 FY26 | H1 FY25 |
|---|---|---|
| Revenue | £1,144,000 | £2,089,000 |
| Profit/(Loss) before tax | £(573,000) | £30,000 |
| Profit/(Loss) after tax | £(495,000) | £59,000 |
| Basic EPS | (1.36)p | 0.16p |
| Finance costs | £210,000 | £207,000 |
| Cash at period end | £17,000 | £49,000 |
| Non-current borrowings | £3,839,000 | £3,690,000 |
| Current bank overdrafts and loans | £3,593,000 | £3,120,000 |
Operating cash outflow was £154,000 and year-end cash sat at just £17,000. Total liabilities were £8,609,000 against total assets of £1,723,000, leaving negative equity of £6,886,000. No dividend is proposed.
What happened in each division
Thomson Engineering Design – product momentum but UK rail spend is subdued
TED has been steady operationally, helped by the sales partnership with Unipart. Management says Unipart has “embedded TED solutions” into several high-profile infrastructure projects, with the first orders expected to land in the next three months. If delivered, these could be an important springboard for TED over the next decade – but timing remains the big unknown.
The UK rail market is described as flat, with Network Rail seemingly slow to deploy its Control Period 7 budget. Despite this, TED converted £185,000 of the £500,000 of RFQs generated at last June’s Rail Live event. The remainder is said to be waiting on stronger commitment from Network Rail, with no certainty on conversion or timing. On the positive side, Transport for London and London Underground have approved – and in some cases mandated – TED machinery for ongoing and future maintenance work.
On the product front, innovation is very much alive. The RT23 Rail Threader has completed development, and the SL21 Sleeper Laying Machine has finished its primary development phase and is undergoing endurance trials. Both are heading into Network Rail’s Product Approval process next.
Utsi Electronics – supply chain strain and a proposed sale awaiting NSIA
Utsi started the year with a string of small to mid-sized orders and healthy enquiry flow, but supply chain issues bit hard. Component obsolescence and raw material shortages have elongated delivery times, squeezed margins, and could jeopardise repeat orders. GPR – ground penetrating radar – kit is only as good as its delivery schedule and after-sales support, and Utsi flags a need for forward funding to compete effectively in tenders.
An initial distribution conversation with an overseas group evolved into a forward-funding discussion and ultimately a formal offer to purchase Utsi. The deal, announced on 24 December 2025, is mainly subject to clearance by the National Security and Investment Authority (NSIA). Clearance is still pending. If approved, the Board expects the sale proceeds to fund development at TED and see Utsi move to a home that will invest in its technologies and open doors to more global customers.
Adien – weather, a bad debt, and insolvency
Adien’s revenue slipped to £712,000 from £855,000, although it had recovered from the first half of 2025 and entered 2026 with a full order book. Then came heavy snow and rain that delayed site work, followed by a significant bad debt. On 13 March 2026 the Group said Adien’s board had concluded the business was insolvent and would seek a creditors’ voluntary liquidation, with BTG Begbies Traynor engaged to act as liquidators.
The Chairman pays tribute to Adien’s team and suggests the business might have survived had NSIA clearance on the Utsi sale arrived in time. From an accounting perspective, the Group expects a write-back of approximately £250,000 of net liabilities from Adien’s demise.
Segment performance at a glance
- Utility detection and mapping services (Adien): revenue £712,000; segment result £(86,000); PBT £(108,000).
- Development, assembly and sale of GPR equipment (Utsi): revenue £122,000; segment result £(113,000); PBT £(284,000).
- Automation and test system solutions (TED): revenue £310,000; segment result £(164,000); PBT £(181,000).
Across the Group, finance costs remain a notable drag at £210,000 for the half.
Funding, debt and going concern support
The Chairman renewed his letter of financial support on 16 November 2025, committing to support the Group until 31 December 2026. Directors, including lenders, have deferred a portion of fees and loan interest until the Company can pay in full. During the half, £127,000 of such amounts were deferred; the cumulative total of deferred amounts stood at £2,421,000 at 31 December 2025.
Borrowings are material, split between non-current borrowings of £3,839,000 and current bank overdrafts and loans of £3,593,000 (combined £7.432 million). With cash of £17,000, liquidity is tight and dependent on the support letter and near-term trading improvements or transactions.
Why this matters for shareholders
- Sales shock and swing to loss – a clear negative. The 45% revenue fall and £573,000 pre-tax loss underline how sensitive the model is to order delays and cost inflation.
- Adien’s liquidation – operational and reputational hit. It removes a revenue contributor and triggers restructuring, even if there is a £250,000 accounting write-back of net liabilities.
- Utsi sale – the pivotal catalyst. NSIA clearance is the key gate. If approved, proceeds are expected to strengthen funding for TED and place Utsi with a buyer focused on growth. If not, forward funding constraints persist.
- TED pipeline – promising, but execution risk. Expected orders via Unipart within three months and TfL/LU approvals are encouraging. Converting that into cash is what counts.
- Balance sheet risk – high. Low cash, high borrowings, and ongoing finance costs leave little margin for error.
My take – high risk, with a path to rehabilitation if catalysts land
I see a classic crunch period. The operating backdrop has been hostile, and the balance sheet offers limited flexibility. The support letter to end 2026 helps, but operational delivery and transaction progress need to follow quickly.
What could change the story positively? Three things: NSIA approval and completion of the Utsi sale; conversion of Unipart-led global opportunities into booked orders and cash at TED; and visible commitment from UK rail customers that unlocks the remaining RFQs. On the flip side, any delay in NSIA clearance or slippage in TED orders would extend the cash squeeze and keep finance costs biting.
In short, the RNS sets out a difficult half, an unfortunate insolvency, and a reliance on near-term catalysts. If those arrive, there is a credible route to stabilisation and investment in TED’s product suite. Until then, this remains a speculative situation where funding, order timing and regulatory sign-off are the moving parts to watch.
What to watch next
- NSIA decision on the Utsi sale and any disclosed terms on completion.
- Confirmation of initial global orders via Unipart for TED and progress on Network Rail Product Approval for RT23 and SL21.
- Cash movements, borrowings, and any updates following Adien’s liquidation process.
- Any commentary on Network Rail spending and RFQ conversions in the UK market.
