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ANSYS LIMITED - Reviewed Provisional Annual Results For The Year Ended 28 February 2013

Release Date: 30/05/2013 13:30
Code(s): ANS     PDF:  
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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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