Wrap Text
Reviewed Provisional Annual Results For The Year Ended 28 February 2013
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 2013
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Year ended Year ended
28 February 2013 29 February 2012
(Reviewed) (Audited)
R'000 R'000
Assets Note
Non-current assets 31 751 46 447
Plant and equipment 509 920
Intangible assets 1 21 604 36 010
Deferred tax asset 9 638 9 517
Current assets 31 873 30 744
Inventories 8 265 9 136
Trade and other receivables 23 398 21 276
Cash and cash equivalents 54 180
Derivative financial assets 4 -
Current tax receivable 152 152
Total assets 63 624 77 191
Equity and liabilities
Equity 37 435 49 443
Stated capital 47 268 46 728
(Accumulated loss)/Retained income (9 833) 2 715
Non-current liabilities 2 452 5 125
Deferred tax liability 2 452 5 125
Current liabilities 23 737 22 623
Borrowings 2 133 3 456
Trade and other payables 12 959 14 259
Derivative financial liabilities - 291
Cash and cash equivalents 8 645 4 617
Total liabilities 26 189 27 748
Total equity and liabilities 63 624 77 191
Number of shares in issue 164 867 056 161 867 056
Net asset value per share (cents) 22.7 30.5
Tangible net asset value per share (cents) 9.6 8.3
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
28 February 2013 29 February 2012
Note (Reviewed) (Audited)
R'000 R'000
Revenue 81 259 102 090
Cost of sales (47 744) (55 660)
Gross profit 33 515 46 430
Other income 817 355
Operating costs (28 345) (31 338)
EBITDA 5 987 15 447
Depreciation and amortisation (3 772) (3 835)
Development cost impairment 1 (8 536) -
Goodwill impairment 1 (7 907) -
(Loss)/profit before interest and taxation (14 228) 11 612
Finance income - 3
Finance cost (1 112) (850)
(Loss)/profit before taxation (15 340) 10 765
Taxation 2 792 (2 843)
(Loss)/profit for the year (12 548) 7 922
Other comprehensive income, net of tax - -
Total comprehensive (loss)/income for the year (12 548) 7 922
Basic (loss)/earnings per share (cents) (7.74) 5.08
Diluted (loss)/earnings per share (cents) (7.74) 5.08
Headline earnings per share (cents) 2.40 5.06
Diluted headline earnings per share (cents) 2.40 5.06
Weighted average number of shares in issue 162 162 946 155 994 105
Diluted average number of shares in issue 162 162 946 155 994 105
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Accumulated
Stated loss)/Retained Total
capital income equity
R'000 R'000 R'000
Balance as at 1 March 2011 42 378 (5 207) 37 171
Movements during the year
Share issue 4 350 - 4 350
Total comprehensive income for the year - 7 922 7 922
Balance as at 29 February 2012 (Audited) 46 728 2 715 49 443
Movements during the year
Share issue 540 - 540
Total comprehensive loss for the year - (12 548) (12 548)
Balance as at 28 February 2013 (Reviewed) 47 268 (9 833) 37 435
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended Year ended
28 February 2013 29 February 2012
(Reviewed) (Audited)
R'000 R'000
Cash flows from operating activities before
working capital 4 583 14 871
Changes in working capital (2 556) (14 686)
Cash flows from operating activities 2 027 185
Cash flows from investing activities (5 397) (6 848)
Cash flows from financing activities (784) 3 762
Cash flows for the year (4 154) (2 901)
Cash and cash equivalents at beginning of
the year (4 437) (1 536)
Cash and cash equivalents at end of the
year (8 591) (4 437)
CONDENSED SEGMENT REPORT
Year ended Year ended
28 February 29 February
2013 2012
(Reviewed) (Audited)
R'000 R'000
Segment Revenue
Rail 57 800 66 469
Defence 18 230 3 335
Mining and Industrial 5 228 32 286
Total segment revenue 81 259 102 090
Segment profit/(loss)
Rail 5 853 12 973
Defence 8 324 (2 138)
Mining and Industrial (9 743) 12 831
Corporate Unallocated (18 662) (12 054)
Finance cost (1 112) ( 850)
Finance income - 3
(Loss)/profit before tax for the year (15 340) 10 765
Total Assets 63 624 77 191
Rail 21 280 34 381
Defence 10 308 1 937
Mining and Industrial 12 473 14 968
Unallocated 19 562 25 905
NOTES TO THE PROVISIONAL FINANCIAL INFORMATION
1. Intangible assets
CRMS Goodwill Other intangible Total
assets
R'000 R'000 R'000
Year ended 28 February
2013 (Reviewed)
Opening net carrying 11 485 22 966 1 559 36 010
Amount
Movement:
- impairment (8 536) (7 907) - (16 443)
- other (843) - 2 879 2 036
Closing net carrying 2 106 15 059 4 438 21 603
Amount
Year ended 29 February
2012 (Audited)
Opening net carrying 7 680 22 966 1 630 32 276
Amount
Movement:
- other 3 805 - (71) 3 734
Closing Net Carrying 11 485 22 966 1 559 36 010
Amount
2. Headline earnings
28 February 2013 29 February 2012
(Reviewed) (Audited)
R'000 R'000
Reconciliation of headline earnings:
(Loss)/profit attributable to ordinary shareholders (12 548) 7 922
Development cost impairment 8 536 -
Goodwill impairment 7 907 -
Adjusted for loss on disposal of plant and
equipment 1 ( 38)
Total tax effects of adjustments - 11
Headline earnings attributable to ordinary
shareholders 3 895 7 895
COMMENTARY
Introduction
In the 28 February 2013 financial year, Ansys's overall performance showed a decrease in revenue from
R102 million to R81 million compared to the 29 February 2012 financial year. Our customers experienced
tough trading conditions during the 28 February 2013 financial year, specifically in the rail and mining
markets, which had an impact on our revenue generation.
Headline earnings decreased from 5.06 cents in the 29 February 2012 financial year to 2.40 cents in the 28
February 2013 financial year. Irrespective of these events, compared to the interim review period the
headline earnings improved from a headline loss of 1.1 cents in 31 August 2012 to headline earnings of 2.40
cents in 28 February 2013. As projected in the interim, the company recovered in the second half of the
year, through the execution of orders and the improvement of efficiencies resulting from the cost
compression exercise undertaken in the second quarter of the 28 February 2013 financial year.
Prospects
The company expects to continue its recovery trajectory in the 28 February 2014 financial year owing to the
improved efficiencies and cost compression exercise undertaken in the 28 February 2013 financial year as
well as the increased spending of our major customers.
The order book improved by 7% from R28 million in the interim period to a current order book of R30 million,
predominantly from Rail and Defence orders.
Market segments
Rail
Annuity revenue from the rail sector is beginning to increase and will continue to expand with an ever
increasing installed base of Ansys systems in this market segment. Revenue generation during the second
half of the year was mostly from maintenance and spares of our installed product base.
The 28 February 2014 financial year is showing much improved prospects and we have seen an increase in
requirements from our major customers for fleet replacement and infrastructure spending. We have secured
orders for the first phase of the Transnet locomotive fleet replacement and have submitted various major
bids to main players in these areas. Ansys is well positioned being mostly the incumbent OEM for these
requirements.
Defence
The defence revenue generation during the 28 February 2013 financial year increased by R14.9 million
compared to the previous financial year. This relates mostly to a significant order received in the last quarter
of the 28 February 2013 financial year. Ansys' defence focus has changed dramatically as new opportunities
were created in this sector.
Mining and Industrial
The revenue generation within the Mining and Industrial market segment for the 28 February 2013 financial
year continued to disappoint, however Ansys has successfully executed orders for the Mobile Rope
Monitoring Systems during the second half of the 28 February 2013 financial year. The challenging labour
market conditions have had a significant impact on the sales of the Rope Monitoring Systems. Despite this,
a major effort has been directed towards marketing activities abroad, generating interest in North America
and Australia.
Restructuring
Following the corporate integration of its businesses acquired in 2007, a further restructuring of the
company's operation was completed in September 2012 to align with the company's new corporate
structure. The decrease in the operating expenses from 29 February 2012 to 28 February 2013 of R2.9
million, was as a result of the restructuring. Management continues to further refine the business model to
make it optimum.
Financial Results
Financial position
Intangible assets
Goodwill impairment
The goodwill impairment of R7.9 million relates to goodwill initially recognized on the business acquisition of
Emerging Signals in the 2008 financial year. The impairment formed part of the Rail segment results as
reflected in the segment report.
Ansys experienced a decline in the Emerging Signals business and a recovery is expected, mainly from the
trackside systems requirements in the railways sector expected in the foreseeable future.
Development cost impairment
An impairment of R8.5 million relates to development cost of the Continuous Rope Monitoring System
(CRMS). The challenging labour market conditions have had a significant impact on the sales of the Rope
Monitoring Systems which triggered the requirement for an impairment. These impairments formed part of
the Mining and Industrial segment results as reflected in the segment reportThe value in use calculations is
based on the assumption that the current units held will be realized within the next financial year.
There were no indications of impairment for the Mobile Rope Monitoring System.
Current assets
A significant part of the increase in current assets from 29 February 2012 to 28 February 2013 was due to
the increase in trade and other receivables of R2.1 million, due to an increase in the invoicing activity for the
last quarter of the 28 February 2013 financial year.
Cash flow statement
- Cash flows from operating activities for the 28 February 2013 year improved by R1.8 million from
the previous financial year, due to improved cost management as part of the cost compression
exercise undertaken during the 28 February 2013 financial year.
- Cash flows from investing activities for the 28 February 2013 review period of R5.3 million (2012:
R6.8 million) mainly resulted from further investment in the development of the Rope Monitoring
Systems.
- Cash flows from financing activities for the 28 February 2013 financial year was mainly due to the
net repayment of a shareholder loan of R1.3 million and the issue of shares of R540 000.
Comprehensive income
Loss/(profit) for the year
The loss for the 28 February 2013 financial year, was a direct result of the impairment of goodwill
and development cost, which are both non-cash flow items.
Going concern
The directors have reviewed the Group's budget and cash flow forecast for the year 28 February
2014. On the basis of this review and in the light of the current financial position of the Group, the
directors are satisfied that the Group will continue to operate for the foreseeable future and have
adopted the going concern basis in preparing the reviewed provisional results.
Placement of shares
During the 2013 financial year, Ansys has placed 3 million shares (2012: 12,75 million shares) in
the public market. These placements were part of the board's efforts to improve 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 these, no dividend
will be payable for this year.
Changes to the board of directors
There were no changes to the board of directors since the interim reporting date.
Broad Based Black Economic Empowerment ("BBBEE")
Ansys is a level 5 contributor.
Events subsequent to period end
Onerous lease
The company is considering relocating to a new premises. The current lease expires at the end of
February 2014 and consists of monthly rental payments of R160 260. The current premises can
be sublet when a new suitable premises is found.
Acquisition Of Tedaka Technologies
On 10 May 2013 Ansys made an offer to purchase 100% of the shares and shareholder loans of
Tedaka Technologies (Pty) Ltd from Tedaka Investments (Pty) Ltd ("the seller") with an effective
date of 1 September 2013. The offer to purchase was accepted by the seller on 21 May 2013,
subject to certain conditional and statutory requirements. The total purchase price is a maximum
of R 22 million, subject to certain profit warranties. The non-executive chairman and acting CEO
of Ansys, Mr Teddy Daka, is a beneficiary of TDK Trust that owns 100% of the seller.
Statement of compliance, basis of preparation and review opinion
The provisional reviewed financial information for the year ended 28 February 2013has been
prepared in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards ("IFRS") and the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by Financial Reporting Standards Council, the South African
Companies Act 71 of 2008, 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 provisional financial results have been reviewed by the company's auditors, BDO South
Africa Incorporated, who have 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 29 February 2012.
Preparer
These results were prepared under the supervision of Rachelle Grobbelaar, the Chief financial
officer.
Appreciation
We wish to thank our customers, business partners, advisors and suppliers for their contribution
to Ansys in the past year. No growth or economic activity would be possible without orders and
the capable employees and shareholder investment to execute them.
By order of the Board
30 May 2013
Teddy Daka Rachelle Grobbelaar
Acting Chief Executive Officer Chief Financial Officer
CORPORATE INFORMATION
Non executive directors: FF Dantile, MD Keebine
Executive directors: T Daka (Chairman and Acting CEO), R Grobbelaar (CFO)
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 Proprietary Limited
Telephone: +27 12 424 8500
Facsimile: +27 12 346 3720
Transfer secretaries: Computershare Investor Services Proprietary Limited
Designated Adviser: Exchange Sponsors 2008 Proprietary Limited
Date: 30/05/2013 01:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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