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Reviewed condensed interim results for the six months ended 31 AUGUST 2012
ANSYS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1987/001222/06)
(Share Code: ANS ISIN: ZAE000097028)
("Ansys" or "the company")
REVIEWED CONDENSED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2012
HIGHLIGHTS:
- Restructuring process finalised
- Saving of 20% on monthly salary bill from September 2012 onwards
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
6 months ended 6 months ended Year ended
31 August 2012 31 August 2011 29 February 2012
(Reviewed) (Reviewed) (Audited)
R'000 R'000 R'000
Assets
Non-current assets 41 360 47 028 46 447
Plant and equipment 721 1 197 920
Intangible assets 29 782 34 210 36 010
Deferred tax asset 10 857 11 621 9 517
Current assets 24 633 30 122 30 744
Inventories 8 030 6 448 9 136
Trade and other receivables 16 305 21 457 21 276
Cash and cash equivalents 125 2 030 180
Other financial assets 21 - -
Current tax receivable 152 187 152
Total assets 65 993 77 150 77 191
Equity and liabilities
Equity 39 728 45 621 49 443
Capital and reserves 39 728 45 621 49 443
Non-current liabilities 5 541 4 375 5 125
Deferred tax liability 5 541 4 375 5 125
Current liabilities 20 724 27 154 22 623
Borrowings 2 096 4 257 3 456
Trade and other payables 12 139 22 896 14 259
Derivative financial liabilities - - 291
Cash and cash equivalents 6 489 - 4 617
Total equity and liabilities 65 993 77 150 77 191
Number of shares in issue 161 867 056 156 367 056 161 867 056
Net asset value per share (cents) 24.5 29.2 30.5
Tangible net asset value per share (cents) 6.1 7.3 8.3
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months ended 6 months ended Year ended
31 August 2012 31 August 2011 29 February 2012
(Reviewed) (Reviewed) (Audited)
R'000 R'000 R'000
Revenue 43 486 50 685 102 090
Gross profit 14 792 23 070 46 430
Other income 72 1 355
Operating costs (15 324) (14 655) (31 338)
Earnings before interest, tax, depreciation,
amortisation and impairments (460) 8 416 15 447
Depreciation and amortisation (1 792) (2 068) (3 835)
Goodwill impairment (7 907) - -
(Loss)/profit before interest and taxation (10 159) 6 348 11 612
Finance income - 3 3
Finance cost (479) (439) (850)
(Loss)/profit before taxation (10 638) 5 912 10 765
Taxation 923 138 (2 843)
(Loss)/profit for the year (9 715) 6 050 7 922
Other comprehensive income, net of tax - - -
Total comprehensive (loss)/ income for the
year (9 715) 6 050 7 922
Basic (loss)/earnings per share (cents) (6.0) 3.96 5.08
Diluted (loss)/earnings per share (cents) (6.0) 3.96 5.08
Headline (loss)/earnings per share (cents) (1.1) 3.96 5.06
Diluted headline (loss)/earnings per share
(cents) (1.1) 3.96 5.06
Weighted average number of shares in issue 161 867 056 152 842 599 155 994 105
Diluted average number of shares in issue 161 867 056 152 842 599 155 994 105
Reconciliation of headline (loss)/earnings:
(Loss)/profit attributable to ordinary
shareholders (9 715) 6 050 7 922
Goodwill impairment 7 907 - -
Adjusted for loss/(profit) on disposal of plant
and equipment 15 - ( 38)
Total tax effects of adjustments (4) - 11
Headline (loss)/earnings attributable to
ordinary shareholders (1 797) 6 050 7 895
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Issued stated Retained income/ Total
capital (Accumulated loss) equity
R'000 R'000 R'000
Balance as at 1 March 2011 42 378 (5 207) 37 171
Movements during the period
Share issue 2 400 - 2 400
Profit for the period ending August 2011 - 6 050 6 050
Balance as at 31 August 2011 44 778 843 45 621
Movements during the period
Share issue 1 950 - 1 950
Profit for the period ending February 2012 - 1 872 1 872
Balance as at 29 February 2012 46 728 2 715 49 443
Movements during the period
Loss for the period ending August 2012 - (9 715) (9 715)
Balance as at 31 August 2012 46 728 (7 000) 39 728
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
6 months ended 6 months ended Year ended
31 August 2012 31 August 2011 29 February 2012
(Reviewed) (Reviewed) (Audited)
R'000 R'000 R'000
Cash flows from operating activities before
working capital (1 234) 7 977 14 871
Changes in working capital 3 953 (3 447) (14 686)
Cash flows from operating activities 2 719 4 530 185
Cash flows from investing activities (3 286) (3 555) (6 848)
Cash flows from financing activities (1 360) 2 591 3 762
Cash flows for the period (1 927) 3 566 (2 901)
Cash and cash equivalents at beginning of the period (4 437) (1 536) (1 536)
Cash and cash equivalents at end of the period (6 364) 2 030 (4 437)
CONDENSED SEGMENT REPORT
6 months ended 6 months ended Year ended
31 August 2012 31 August 2011 29 February 2012
(Reviewed) (Reviewed) (Reviewed)
R'000 R'000 R'000
Segment revenue
Rail 40 106 36 001 66 469
Defence 2 972 1 874 3 335
Mining and Industrial 408 12 811 32 286
Total 43 486 50 686 102 090
Segment (loss)/profit
Rail 1 049 6 318 12 970
Defence 635 578 (2 138)
Mining and Industrial (4 240) 3 136 12 831
Total (2 556) 10 032 23 663
Corporate unallocated (7 603) (3 684) (12 048)
Finance cost ( 479) ( 439) ( 850)
Finance income - 3 -
(Loss)/profit before tax (10 638) 5 912 10 765
COMMENTARY
Introduction
During the period under review Ansys continued to increase the railways business resulting in an 11% year-
on-year increase in line with our strategic intent to benefit from the infrastructure investments of our major
customers. Our Mining and Industrial business disappointed, mainly due to the depressed local mining
sector which has suffered the economic effects of the downturn in the European Union markets and a
challenging local labour market. This has significantly contributed to the decrease in basic headline earnings
of 3.96 cents to a basic headline loss of 1.10 cents. The Defence market segment continues to grow, albeit
at a modest rate.
Prospects
The company expects a recovery in the second half of the year, through the execution of current orders as
well as improved efficiencies resulting from the restructuring exercise undertaken in the second quarter of
the current financial year.
The order book is currently in excess of R28 million. Contracts secured include Defence contracts from
Denel, Rail orders from Transnet Freight Rail and Mining orders from Anglo Field Services.
Market segments
Rail revenue generation during the current review period increased by R4 million when compared to the
prior review period. Revenue from the first half of the current year was generated from the execution of rail
trackside measurement systems, on board systems as well as maintenance and spares of our installed
product base. With an ever increasing installed base of Ansys systems, prospects for continued annuity
revenue continue to expand in the market segment. In general, Ansys is well positioned in this market
segment to take advantage of the growing public sector investment in the railways infrastructure.
Ansys' defence focus has changed dramatically as new opportunities were created in this sector during the
current review period. Although revenue in the first half of the current financial year was similar compared to
the prior review period, year-end forecasted revenue for this segment is expected to generate revenue
comparatively higher than what Ansys has produced in the 29 February 2012 financial year.
The revenue generation within the Mining and Industrial market segment during the first half of the current
financial year was disappointing. The challenging labour market conditions have had a significant impact on
the sales of the Rope Monitoring Systems. However, despite these events, Ansys has secured orders for the
mobile Rope Monitoring Systems to be executed in this current financial year. In addition, a major effort has
been directed towards marketing activities abroad, generating interest in North America and Australia.
Restructuring
During the prior financial year, Ansys completed its corporate integration of its businesses acquired in 2007.
This has been followed by a restructuring of the company's operations to align with the company's new
corporate structure. The process was finalised in September 2012 and resulted in a 17% workforce
reduction and a 20% saving on the salary bill from September 2012 onwards.
Financial results
Current assets
A significant part of the decrease in current assets from 29 February 2012 to 31 August 2012 was due to the
decrease in trade and other receivables of R4.9 million. Project completion dates, for a majority of the
projects that were started during the current financial year, were scheduled for completion in the third
quarter of the current financial year.
Goodwill impairment
Goodwill impairment of R7.9 million relates to goodwill initially recognised on the business acquisition of
Emerging Signals in the 2007 financial year. The goodwill impairment formed part of the Rail segment
results as reflected in the segment report. Ansys experienced a decline in the business the last six months
and only a slight recovery is expected.
Cash flow statement
- Cash outflows from investing activities for the 31 August 2012 review period of R3.2 million mainly
resulted from further investment in the development of the Rope Monitoring Systems.
- Cash outflows from financing activities for the 31 August 2012 review period of R1.3 million mainly
resulted in the repayment of a shareholder loan.
Dividend policy
No interim dividend has been declared.
Changes to the board of directors
Alan Holloway resigned as Chief Executive Officer and Teddy Daka was appointed interim Chief Executive
Officer with effect from 30 June 2012.
David Keebine was appointed as the Lead Independent Director to the board with effect from 25 October
2012.
The restructuring of the Group also affected the composition of the Board, with the result that Rudi Barnard
has stepped down from the Board with effect from 29 October 2012. Once the position of Chief Executive
Officer has been filled, the Board will comprise of two executive directors and three non-executive directors,
of whom two are independent.
Broad Based Black Economic Empowerment ("BBBEE")
Ansys is a level 5 contributor.
Basis of preparation and accounting policies
The condensed interim financial information for the six months ended 31 August 2012 has been prepared in
accordance with IAS 34, 'Interim Financial Reporting' and in the manner required by the Companies Act of
South Africa. The interim condensed financial report should be read in conjunction with the annual financial
statements for the year ended 29 February 2012. This announcement has been prepared in accordance
with the Listings Requirements of the JSE Limited.
Independent review
BDO South Africa Incorporated, independent auditor to Ansys Limited, has reviewed the condensed
financial statements contained in this interim report and has expressed an unmodified review conclusion on
the results for the six months ended 31 August 2012. 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 29 February 2012.
Appreciation
The board wishes to thank the employees for their commitment and loyalty towards the group, especially
during the restructuring process.
The board would also like to thank its business partners, advisors and suppliers, and most importantly the
shareholders for their ongoing support and faith in the group.
By order of the Board
15 November 2012
Teddy Daka Rachelle Grobbelaar
Chairman and Interim Chief Executive Officer Chief Financial Officer
CORPORATE INFORMATION
Non-executive directors: T Daka (Chairman), FF Dantile, MD Keebine (Lead Independent Director)
Executive directors: R Grobbelaar (CFO), T Daka (Interim CEO)
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) Ltd
Designated Adviser: Exchange Sponsors 2008 (Pty) Ltd
Date: 15/11/2012 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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