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ANS - Ansys Limited - Reviewed provisional annual results for the year ended 28

Release Date: 17/05/2011 07:06
Code(s): ANS
Wrap Text

ANS - Ansys Limited - Reviewed provisional annual results for the year ended 28 February 2011 ANSYS LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1987/001222/06) (Share Code: ANS ISIN Code: ZAE000097028) ("Ansys" or "the company") REVIEWED PROVISIONAL ANNUAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2011 HIGHLIGHTS: * Revenue from continuing operations up by 26% * EBITDA from continuing operations of R1.98 million * Disposal of loss making Optocon Systems (Pty) Ltd * EPS and HEPS of 0.14 cents from continuing operations * Integration and merging of operations completed CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Year ended Year ended 28 February 2011 28 February 2010 (Reviewed) (Audited) R`000 R`000
Assets Non-current assets Plant and equipment 1 641 7 887 Intangible assets 32 276 29 347 Deferred tax asset 11 161 6 465 Current assets Inventories 5 390 10 156 Trade and other 12 836 32 261 receivables Cash and cash 781 3 355 equivalents Other financial assets - 60 Current tax receivable 187 - Total assets 64 272 89 531 Equity and liabilities Equity Capital and reserves 37 171 48 747 Non-current liabilities Borrowings - 388 Deferred tax liability 4 055 1 983 Current liabilities Borrowings 4 044 274 Trade and other 16 666 30 048 payables Other financial 19 - liabilities Cash and cash 2 317 7 202 equivalents Current tax payable - 889 Total equity and 64 272 89 531 liabilities Number of shares in 149 117 056 142 228 041 issue Net asset value per 24.9 34.3 share (cents) Tangible net asset 3.2 13.6 value per share (cents) CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year ended Year ended 28 February 28 February 2011 2010 (Reviewed) (Audited)
R`000 R`000 CONTINUING OPERATIONS: Revenue 97 877 77 366 Gross profit 31 879 25 002 Other income 342 277 Operating costs (30 246) (32 789) EBITDA 1 975 (7 510) Depreciation and amortization (3 772) (2 541) Loss before interest and taxation (1 797) (10 051) Interest received 63 184 Interest paid ( 694) ( 695) Loss before taxation (2 428) (10 562) Taxation 2 624 2 052 Profit/(loss) for the year from 196 (8 510) continuing operations DISCONTINUED OPERATIONS: Loss for the year (13 432) (7 728) Taxation - 532 Loss for the year from discontinued (13 432) (7 196) operations Basic loss per share (cents) (9.22) (11.10) Diluted loss per share (cents) (9.22) (10.95) Headline loss per share (cents) (3.86) (10.25) Diluted headline loss per share (3.86) (10.12) Weighted average number of shares in 143 637 146 141 517 718 issue Diluted average number of shares in 143 637 146 143 406 733 issue Reconciliation of headline loss: Loss attributable to ordinary (13 236) (15 706) shareholders Adjusted for goodwill impairment - 1 166 Adjusted for the loss made on the 7 686 - disposal of subsidiary Adjusted for (profit)/loss on (11) 40 disposal of plant and equipment Tax effect on adjustments 3 (11) Headline loss attributable to (5 558) (14 511) ordinary shareholders Continuing Discontinued Continuing Discontinued operations operations operations operations Year ended Year ended Year ended Year ended 28-Feb 28-Feb 28-Feb 28-Feb
(Reviewed) (Reviewed) (Audited) (Audited) 2011 2011 2010 2010 Basic earnings/(loss) 0.14 (9.35) (6.01) (5.08) per share (cents) Diluted earnings/(loss) 0.14 (9.35) (5.93) (5.02) per share (cents) Headline earnings/(loss)per 0.14 (4.00) (5.99) (4.26) share (cents) Diluted headline earnings/(loss) 0.14 (4.00) (5.91) (4.20) per share Weighted average 143 637 143 637 146 141 517 141 517 718 number of shares 146 718 in issue Diluted average 143 637 143 637 146 143 406 143 406 733 number of shares 146 733 in issue Reconciliation of headline earnings/(loss): Profit/(loss) attributable to 196 (13 432) (8 510) (7 196) ordinary shareholders Adjusted for goodwill - - - 1 166 impairment Adjusted for the loss made on the - 7 686 - - disposal of subsidiary Adjusted for - - (profit)/loss on (11) 40 disposal of plant and equipment Total tax effects - of adjustments - 3 ( 11) Headline (5 754) (8 481) earnings/(loss) 196 (6 030) attributable to ordinary shareholders CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Issued Vendor Retained Total
share shares income / equity capital (Accumulated loss)
Balance at 1 March 29 181 13 106 23 735 66 022 2009 Movements during the year Shares issued 5 869 (5 869) - - Re-assessment of - (1 569) - (1 569) shares to be issued as result of business combination Loss for the year - - (15 706) (15 706) Balance as at 28 35 050 5 668 8 029 48 747 February 2010 Movements during the year Shares issued 7 328 (5 668) - 1 660 Loss for the year - - (13 236) (13 236) Balance as at 28 42 378 - (5 207) 37 171 February 2011 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended Year ended 28 28 February 2010 February
2011 (Reviewed) (Audited) R`000 R`000 Cash flows from operating activities (4 723) (14 335) before working capital Changes in working capital 7 887 26 714 Cash flows from operating activities 3 164 12 379 Cash flows from investing activities (6 407) (7 599) Cash flows from financing activities 5 554 (6 477) Cash flows for the year 2 311 (1 697) Cash and Cash equivalents at (3 847) (2 150) beginning of year Cash and Cash equivalents at end of (1 536) (3 847) the year CONDENSED SEGMENTREPORT Year ended Year ended Year ended
28-Feb 28-Feb 28-Feb (Reviewed) (Reviewed) (Reviewed) 2011 2011 2011 TOTAL CONTINUING DISCONTINUED
OPERATIONS OPERATIONS Segment Revenue: Rail 76 248 76 248 -
Defense 23 896 12 11 378 518 Industrial 10 149 10 149 -
Corporate Unallocated 102 102 - Total 110 395 12 97 877 518
Operating loss segment results (before interest and taxation): Rail 1 708 1 708 -
Defense (7 976) (13 5 327 303) Industrial (1 414) (1 414) -
Corporate Unallocated (7 418) (7 418) - Total (15 100) (13 (1 797) 303)

Year ended Year ended Year ended 28-Feb 28-Feb 28-Feb (Audited) (Audited) (Audited) 2010 2010 2010
TOTAL CONTINUING DISCONTINUED OPERATIONS OPERATIONS Segment Revenue: Rail 61 903 61 903 - Defense 29 565 19 9 604 961 Industrial 5 757 5 757 - Corporate Unallocated 102 102 - Total 97 327 19 77 366 961 Operating loss segment results (before interest and taxation): Rail 1 380 1 380 - Defense (12 714) (7 (5 110) 604) Industrial (1 379) (1 379) - Corporate Unallocated (4 942) (4 942) - Total (17 655) (7 (10 051) 604) NOTES TO THE PROVISIONAL FINANCIAL INFORMATION 1 Discontinued operation During the year the company disposed of all its shareholding in Optocon Systems (Pty) Ltd, which formed part of the Defence segment. The effect on the statements of comprehensive income: Discontinued Discontinued operations operations
Year ended Year ended 28-Feb 28-Feb (Reviewed) (Audited) 2011 2010
R`000 R`000 Revenue 12 518 19 961 Gross profit 7 086 9 302 Other income 48 49 Operating costs (11 957) (15 892) Loss on the disposal of (7 686) - subsidiary EBITDA (12 509) (6 541) Depreciation and amortization ( 795) (1 063) Loss before interest and (13 303) (7 604) taxation Interest received 5 36 Interest paid (134) (160) Loss before taxation (13 432) (7 728) Taxation - 532 Loss for the year from (13 432) (7 196) discontinued operations Other comprehensive income, net - - of tax Total comprehensive loss for (13 432) (7 196) the year The effect on the statements of cash flows: 2011 2010 R`000 R`000
Plant and equipment 4 818 - Intangible assets 114 - Inventory 3 548 - Trade and other receivables 8 579 - Trade and other payables (9 203) - Finance leases (394) - Cash and cash equivalents 224 - Loss on disposal (7 686) Total proceeds on disposal - - Cash and cash equivalents (224) - Net cash flow on disposal (224) - COMMENTARY The 2011 financial year has been a year of partial recovery from 2010. Revenue generation from the continuing operations increased from R77.3 million for the year ended 28 February 2010 to R97.8 million for the year ended 28 February 2011, mainly due to the award of the two orders secured from General Electric South Africa Technologies ("GESAT") in the rail segment. Basic earnings per share from continued operations improved from a basic loss per share of 6.0 cents to basic earnings per share of 0.14 cents. Performance of the continuing operations has improved since 2010, but Optocon Systems (Pty) Ltd ("Optocon") continued to disappoint until it was sold in November 2010, at a large loss. As a result of that loss, the group experienced a shortage of working capital. Ansys management has subsequently put a major effort into the cash flow management of the company. Some of those efforts were the placement of shares into the market, decreasing the payment cycles from our customers, getting advance payments on projects as well as focusing on accelerating invoicing on current orders. The final integration and merging of all the remaining businesses acquired in 2007 under the Ansys management and trading style has been completed during the first quarter of the 2012 financial year. As part of the integration process of products and customers, the board decided during the 2011 financial year to divisionalise the business of QuadSoft (Pty) Ltd ("QuadSoft") into the Rail segment of Ansys. As part of the board`s strategic approach to reduce trading risks and keep overheads minimal, Ansys is now trading from two premises rather than four. One of these premises is a new 1300m2 assembly facility being set up in Centurion to produce all of the group products. Prospects for the 2012 financial year have improved dramatically with the completion of the in-house developed Continuous Rope Monitoring System ("CRMS") and the successful installation of the first model for AngloGold Ashanti`s Moab Khotsong mine. A recent Mine Rope Symposium in Houston Texas confirmed the uniqueness of this product and its world demand. The product will be produced at the assembly facility and is expected to have a significant effect on future profitability. Rail business remains good and is the backbone of Ansys revenue. Yard safety and further wayside readers are expected to continue the revenue growth from this segment. Ansys defence division continues to focus on the export of low cost sights to meet the worldwide demand for the upgrade of wheeled armoured vehicles. Ansys aspires to be a major high technology industrial conglomerate applying its core competencies in the provision of electronic and software system solutions in the Rail, Industrial and Mining markets worldwide. While it has significant technology of its own, it freely co-operates with other similar companies in the world to ensure that its customers are supplied with leading edge solutions. "We make it work" Financial Results Disposal of subsidiary Optocon was sold during the current financial year with effect from 1 November 2010. The year end results include eight months of Optocon`s results. Refer to the notes on the provisional financial information for effect on the statement of comprehensive income, statement of financial position and the statement of cash flows. Non-Current assets The net decrease in non-current assets was due to the following: * A decrease in plant and equipment of R 6.2 million was mainly due to the disposal of Optocon. Refer to the notes of the provisional financial information. * An increase in the deferred tax asset of R4.6 million was mainly due to the recognition of taxable losses during the current financial year. * The net increase in intangible assets of R2.9 million was due to the increase in the capitalization of continuous rope monitoring system ("CRMS") development cost to the value of R5.3 million and the amortization of the Ansys maintenance management system (AMMS) to the value of R2.3 million. During the 2011 financial year an order was received, from AngloGold Ashanti, for 8 CRMS units to be delivered in the 2012 financial year. Current assets The net decrease in current assets was as follows: * The majority of the decrease in inventory of R4.7 million was due to the disposal of Optocon. Refer to the notes of the provisional financial information. * A significant part of the decrease in current assets is due to the R19.4 million decrease in trade and other receivables. R8.5 million of the decrease was due to the disposal of Optocon. The further decrease of R10.9 million is due to the above normal value of trade receivables at 28 February 2010, resulting from the completion of rail projects towards the end of the 2010 financial year. Current liabilities: A significant part of the decrease in current liabilities was due to the decrease in trade and other payables of R13.4 million. The decrease was mainly due to the disposal of Optocon which affected the trade and other payables by R9.2 million. Refer to the notes of the provisional financial information. Also included as part of the trade and other payables of R16.6 million was advance payments received on current projects to the value of R10.7 million. These payments were mainly utilised on the development of intangible assets during the 2011 financial year. The board wishes to point out that these advance payments led to the current liabilities exceeding the current assets as at 28 February 2011, but it should be noted that the delivery on these projects will occur during the 2012 financial year. Placement of shares During the last quarter of the 2011 financial year, Ansys placed five million shares in the public market. These placements were part of the board`s efforts to raise working capital. Dividend policy Ansys has historically exercised a policy of paying dividends to shareholders, having due regard to the profit, future capital requirements and cash flow position. In the light of the low profitability for 2011, no dividend will be paid. Changes to the board of directors The following changes to the board of directors occurred during the financial year and up to the date of this report: DM Keebine (Non-executive director) - Appointed on 10 March 2011 FF Dantile (Non-executive director) - Appointed on 10 March 2011 Dr JL Steyn (Non-executive director) - Resigned on 1 March 2010 Broad Based Black Economic Empowerment ("BBBEE") During the current year assessment Ansys maintained its rating of level 6 contributor. Statement of compliance and basis of preparation The provisional reviewed financial information for the year ended 28 February 2011 has been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards ("IFRS") and the AC500 standards as issued by the Accounting Practices Board, the South African Companies Act, as amended and the Listings Requirements of the JSE Limited ("JSE Listings Requirements") and contain the information required by IAS 34: Interim Financial Reporting.. The results have been prepared in accordance with accounting policies of the group that comply with IFRS as well as the AC500 the JSE Limited and have been consistently applied, throughout the Group, to all periods presented. These provisional financial results have been reviewed by the Company`s auditors, BDO South Africa Incorporated, who has expressed an unmodified review conclusion on the results. A copy of their review report is available for inspection at the company`s registered office. The accounting policies adopted are consistent with those of the annual financial statements for the year ended 28 February 2010. Appreciation We wish to thank our customers, business partners, advisors and suppliers for their contribution to Ansys Ltd in the past year. No growth or economic activity would be possible without orders and the capable employee and shareholder investment to execute them. By order of the Board 17 May 2011 Alan Holloway Rachelle Grobbelaar Chief Executive Officer Chief Financial Officer CORPORATE INFORMATION Non executive directors: T Daka (Chairman), FF Dantile, DM Keebine Executive directors: A Holloway (CEO), R Grobbelaar (CFO), RF Barnard Registration number: 1987/001222/06 Registered address: 170 Outeniqua Avenue, Waterkloof Park, Pretoria Postal address: PO Box 95361, Waterkloof, Pretoria Company secretary: Fusion Corporate Secretarial Services (Pty) Ltd Telephone: +27 12 424 8500 Facsimile: +27 12 346 3720 Transfer secretaries: Computershare Investor Services (Pty) Limited Designated Adviser: Exchange Sponsors 2008 (Pty) Limited Date: 17/05/2011 07:06:02 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). 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