5th Jul 2024 10:19
(Alliance News) - PipeHawk PLC shares plummeted on Friday after it said that due to "severe financial pressure", it is taking steps to potentially place its subsidiary QM Systems into administration.
Shares in the Hampshire, England-based company dropped 73% to 2.32 pence in London on Friday morning.
In late March, when it published its half-year results, PipeHawk said that QM was experiencing a number of challenges. These included a reduction in the number of orders as well as the value of orders received.
However PipeHawk, which provides technology for highways and for the automotive, rail and aerospace industries, believed that it would receive "two material orders" which "were anticipated to underpin QM's financial performance and position".
In March Chair Gordon Watt said PipeHawk was "cautiously optimistic that next year will be a return to good profitability where, after a two year "hiccup" in our financial plans, we will be able to take proper advantage of QM Systems' move to premises five times the size of its previous premises".
On Friday, however, PipeHawk said that the orders "will not be forthcoming."
PipeHawk said that because of this news, "QM's financial position is now under severe financial pressure" and it is taking steps to potentially place the business into administration or a similar insolvency process.
PipeHawk acknowledged that these developments were "disappointing".
However, it reassured investors that "the board is of the view that any steps taken to protect the interests of QM's creditors...will not impact PipeHawk's broader group of companies".
As a result, PipeHawk said, "the board believes that the remainder of the group will be able to continue to trade as a going concern".
PipeHawk added that for its other subsidiaries, trading remains in line with management expectations.
By Emma Curzon, Alliance News reporter
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