Wrap Text
Reviewed Provisional Condensed Consolidated Interim Financial Statements for the period ended 30 September 2016
Ansys Limited
("Ansys" or "the company" or "the Group")
(Incorporated in the Republic of South Africa)
(Registration Number: 1987/001222/06)
Share Code: ANS
ISIN: ZAE000097028
Reviewed Provisional Condensed Consolidated Interim Financial Statements
for the period ended 30 September 2016
HIGHLIGHTS
- Revenue increased to R408.6 million from R155.1 million (up 163.5%)
- EBITDA improved to R57.2 million from R9.1 million (up 532.2%)
- Profit after tax improved to R34.9 million from R4.3 million (up 710 %)
- Headline Earnings per share increased to 7.57 cents from 1.32 cents (up
471.6%)
- Basic Earnings per share increased to 7.59 cents from 1.32 cents (up 473%)
- Tangible Net Asset Value increased to 25.6 cents from 14.6 cents (up 75.2%)
Condensed consolidated statement of financial position
As at 30 September 2016
30 September
2016 31 Aug 2015 31 March 2016
Notes (Reviewed) (Reviewed) (Audited)
R'000 R'000 R'000
Assets
Non-current assets 183 405 170 783 175 492
Property, plant and equipment 3 52 107 43 982 43 053
Intangible assets 118 060 118 205 120 418
Deferred tax asset 13 238 8 596 12 021
Current assets 292 657 157 079 249 489
Inventories 4 91 079 61 770 84 774
Trade and other receivables 5 146 739 73 890 121 682
Cash and cash equivalents 54 164 21 074 42 358
Other financial assets 675 345 675
Total assets 476 062 327 862 424 981
Equity and liabilities
Equity 236 130 185 598 201 271
Share capital 212 140 212 140 212 140
Accumulated profit/(loss) 23 763 (26 898) (11 224)
Minority interest 229 357 354
Non-current liabilities 49 139 35 086 48 887
Interest bearing borrowings 6 37 462 33 998 32 509
Other financial liabilities 2 155 - 6 372
Deferred tax liability 9 522 1 088 10 006
Current liabilities 190 793 107 178 174 823
Provisions 2 377 2 750 1 503
Interest bearing borrowings 6 5 858 2 419 2 703
Other financial liabilities 4 218 11 943 2 070
Trade and other payables 7 159 368 81 916 152 382
Current tax payable 9 615 1 073 1 460
Bank overdrafts 9 357 7 077 14 705
Total equity and liabilities 476 062 327 862 424 981
Number of shares in issue 461 038 321 461 038 321 461 038 321
Net asset value per share (cents) 51.2 40.3 43.7
Tangible net asset value per
share (cents) 25.6 14.6 17.5
Condensed consolidated statement of comprehensive income
For the 6 months ended 30 September 2016
6 months 6 months 13 months
ended ended ended
30 September 31 March
2016 31 August 2015 2016
Note (Reviewed) (Reviewed) (Audited)
R'000 R'000 R'000
Revenue 408 633 155 073 474 066
Cost of sales (306 766) (110 706) (351 054)
Gross profit 101 867 44 367 123 012
Other income 1 197 117 703
Operating costs (60 993) (35 340) (88 917)
Other gains/(losses) 8 993 (2 298) (2 719)
Operating profit 51 064 6 846 32 079
Finance income 1 396 443 1 419
Finance costs (3 980) (801) (4 996)
Profit before taxation 48 480 6 488 28 502
Taxation (13 618) (2 184) (8 529)
Net profit for the period 34 862 4 304 19 974
Other comprehensive income,
net of tax - - -
Total comprehensive income
for the period 34 862 4 304 19 974
Attribute to:
Equity holders of the company 34 987 4 336 20 010
Non-controlling interest (125) (32) (36)
34 862 4 304 19 974
Basic earnings per share (cents) 1 7.59 1.32 4.86
Diluted earnings per share
(cents) 7.59 1.32 4.86
Weighted average number of
shares in issue 461 038 321 324 954 810 410 797 070
Diluted average number of
shares in issue 461 038 321 324 954 810 410 797 070
Condensed consolidated statement of cash flows
For the 6 months ended 30 September 2016
6 months 6 months 13 months
ended ended ended
30 September 2016 31 August 31 March
2015 2016
(Reviewed) (Reviewed) (Audited)
R'000 R'000 R'000
Cash flows from operating
activities
Cash receipts from customers 383 576 145 999 445 616
Cash paid to suppliers and
employees (350 568) (199 144) (468 638)
Cash generated from/(utilised
in) operations 33 008 (53 145) (23 022)
Interest paid (3 980) (802) (4 996)
Interest received 1 396 443 1 419
Taxation paid (6 455) (2 125) (7 196)
Net cash flow generated
from/(utilised in) operating
activities 23 969 (55 628) (33 795)
Cash flows from investing
activities
Purchase of property, plant and
equipment (11 533) (2 958) (4 688)
Proceeds from disposal of
property, plant and equipment 128 - 81
Cash payment for acquisition of
subsidiary net of cash acquired (2 070) 10 781 7 281
Movement in intangible assets (1 447) 64 (1 430)
Increase in other financial assets - - (330)
Net cash flow (utilised
in)/generated from investing
activities (14 923) 7 886 914
Cash flows from financing
activities
Issue of share capital - 17 200 17 200
Decrease in related party loans - (5 998) (5 998)
Increase in interest bearing
borrowings 8 109 31 146 29 940
Net cash flow generated from
financing activities 8 109 42 348 41 143
Net increase/(decrease) in cash,
cash equivalents and bank 17 155 (5 393) 8 262
overdrafts
Cash, cash equivalents and bank
overdrafts at beginning of period 27 652 19 390 19 390
Cash, cash equivalents and bank
overdrafts at end of period 44 807 13 997 27 652
Condensed consolidated statement of changes in equity
For the 6 months ended 30 September 2016
Accumu
Issued lated Non-
share profit/(loss controlling
capital es) interest Total
R'000 R'000 R'000 R'000
Balance as at 1 March 2015
(Audited) 73 668 (31 235) - 42 433
Movements during the period
Shares issued 26 269 - - 26 269
Business combination 112 203 - 389 112 592
Profit for the period - 4 336 (32) 4 304
Balance as at 31 August 2015
(Reviewed) 212 140 (26 899) 357 185 598
Movements during the
period
Profit for the period - 15 674 (4) 15 670
Balance as at 31 March 2016
(Audited) 212 140 (11 225) 353 201 268
Movements during the period
Profit for the period - 34 987 (125) 34 862
Balance as at 30 September
2016 (Reviewed) 212 140 23 762 228 236 130
Condensed consolidated segment report
For the 13 months ended 31 March 2016
6 months 6 months 13 months
ended ended ended
30 September 2016 31 August 2015 31 March 2016
Notes (Reviewed) (Reviewed) (Audited)
R'000 R'000 R'000
Segment revenue
Rail 65 549 60 215 137 016
Defence and Information 115 230 24 208 90 145
Security
Mining and Industrial 45 186 16 753 42 548
Telecommunications 182 668 53 897 204 357
Total 408 633 155 073 474 066
Segment profit *
Rail 6 937 6 470* 15 871
Defence and Information 13 642 1 403* 15 997
Security
Mining and Industrial 6 071 282* 4 029
Telecommunications 29 297 3 934* 6 130
Sub total 55 947 12 089 42 027
Corporate costs** (4 883) (5 243)** (9 948)
Finance costs (3 980) (801) (4 996)
Finance income 1 396 443 1 419
Profit before taxation 48 480 6 488 28 502
Financial position ^
Assets 476 062 327 862 425 981
Rail 100 469 74 079^ 107 011^
Defence and Information 156 148 56 210^ 134 765^
Security
Mining and Industrial 74 571 46 531^ 50 456^
Telecommunications 139 971 58 949^ 125 494^
Intangible assets to be classified - 87 731^ -^
Corporate assets 4 903 4 362^ 8 255^
Liabilities 239 932 142 264 223 710
Rail 12 981 23 392^ 38 112^
Defence and Information 107 257 59 868^ 76 252^
Security
Mining and Industrial 28 866 17 586^ 14 069^
Telecommunications 89 227 40 717^ 92 457^
Corporate liabilities 1 601 701^ 2 820^
* In the August 2015 interim figures, segment profit in Rail, Defence and Information
Security, Mining and Industrial was reported on a Gross Profit basis, and
Telecommunications was reported on Net Profit (after tax and interests). This year all
segment profits are all based on Net Profit, calculated as Gross Profits for the segments,
with the remaining costs in the entities (less Corporate costs) being apportioned to
segments based on Gross Profit margin percentages.
In the prior year the segment profit/(loss) were stated as follows:
R'000 R'000
Rail R 6 803 Defence and R 6 478
Information Security
Mining and Industrial (R 588) Telecommunications R 3 412
** Corporate costs include group head office, corporate, marketing and administration costs. In
the August 2015 interim figures this was a balancing figure and was reported as R9.259
million in the segment report. This year the figure was restated to reflect the same method
of calculation used in the current year's segment report.
^ In the current reporting period, the segment assets and liabilities have been allocated using
the same principles in allocating the segment profit and loss, and the August 2015 and March 2016
periods have been restated to align to these new allocation principles.
In the prior periods the segment assets/liabilities were stated as follows:
6 months 13 months
ended ended
31 August 2015 31 March 2016
Assets 327 862 425 981
Rail 56 702 98 043
Defence and Information 14 655 70 700
Security
Mining and Industrial 28 423 33 207
Telecommunications 31 249 127 308
Intangible assets to be classified 87 731 -
Corporate assets 109 102 95 723
Liabilities 142 264 223 710
Rail 2 270 1 263
Defence and Information 31 244 23 995
Security
Mining and Industrial 27 314 -
Telecommunications 35 735 94 271
Corporate liabilities 45 701 104 181
COMMENTARY
GROUP PROFILE
The Ansys group consists of a portfolio of technology businesses operating in the Rail, Mining &
Industrial, Defence & Information Security and Telecommunications market sectors, both locally
and internationally. Through leveraging our own IP, we develop, produce, distribute and integrate
bespoke and standard technology products and solutions to satisfy client requirements. Our
products and solutions are aimed at improving our client's productivity, safety and security and are
generally employed in harsh environments. Through constant innovation in design, development
and manufacturing, we remain at the forefront of technology development and IP generation in all
areas of our business.
FINANCIAL RESULTS HIGHLIGHTS
The Group experienced increased revenue and profit growth when compared to the previous
interim reporting period. Revenue is up by 163.5% from R155.1 million to R408.6 million. EBITDA
improved to R57.2 million from R9.1 million representing an increase of 532.2%. Profit before
interest and tax increased by 645.9% to R51.1 million from R6.8 million in the comparative period.
Headline earnings improved to R34.9 million from a profit of R4.3 million (increase of 710.9%)
translating to an increase of 471.6% in headline earnings per share from 1.32 to 7.57 cents. This
growth is predominantly a result of our strategy of strengthening the verticals in terms of market
access and delivery capability, both organically and through historical acquisitions.
OUR OPERATIONS
During the period under review, we continued to invest in and leverage on our core competencies
in innovation, design and production in the group as well as driving the process of meeting our
objective in creating a more balanced business across our market segments.
Rail
Despite the tough trading conditions in the railways market, revenue grew by 8.9% to R65.5
million from R60.2 million with profit growing by 7.2% to R6.9 million from R 6.4 million. This
growth is a result of the introduction of a new business model designed to mitigate the downward
pressure on margins by our major clients. In addition, we improved the management of our
foreign exchange risk which in the previous interim reporting period had a negative effect on
margins.
Defence & Information Security
With the defence and information security revenue from the Parsec Holdings acquisition now fully
accounted for in this reporting period, revenue in this segment grew by 376% to R115.2 million
from R24.2 million. Revenue growth for this reporting period is higher than anticipated mainly due
to high volume production sales from international opportunities that came in earlier than
expected. As a result of increased revenue and higher margins compared to the previous interim
reporting period, the defence & information security segment profit grew by 872.3% to R13.642
million from R1.403 million.
Mining & Industrial
Performance in the mining and industrial segment has improved significantly. Revenue for the
period increased by 169.7% to R45.2 million from R16.8 million while segment profit grew from
R0.3 million to R6.1 million. This is due to the full inclusion of revenue and profit from the Parsec
Holdings acquisition as well as the impact of high volume orders received during this period.
Telecommunications
Segment revenue for the period grew by 238.9% to R182.7 million compared to R53.9 million
from the previous interim reporting period. This growth was primarily driven by accelerated fibre
network rollouts by all major telecommunications operators, resulting in a significant increase in
demand for our products. Through optimisation of the supply chain function and implementation of
an effective foreign exchange hedging strategy overall profitability increased substantially resulting
in an increase in segment profit of 644.7% from R3.9 million to R29.3 million.
OUTLOOK
In the short term we expect the economy to remain tight with a negative general impact on
economic growth in the local market. However, despite these challenging market conditions, we
envisage to continue growing our business for the remainder of the year.
We expect the rail market to remain tough in the second half of the financial year with possible
softening in the next financial year.
The mining and industrial segment outlook remains turbulent however with signs of possible
recovery. We remain optimistic about this segment as we supply into safety and productivity
enhancing products and we expect to see a turnaround in this segment with increased growth
prospects in the medium term.
We expect the local defence and information security market to continue to grow albeit at a
reduced pace. Our new offering, due to the integration of Ansys' and Parsec Holdings' defence
capabilities, continues to offer opportunities for growth. The opportunities in the local and
international defence business remain strong.
We envisage the telecommunications sector to continue investing in network upgrades and builds
which continues to provide opportunities for growth. Fibre network deployments are still in the
initial growth phase, and we expect them to continue to grow in the short to medium term.
With a solid foundation now laid in our four vertical market segments we expect to continue
growing our business.
FINANCIAL RESULTS COMMENTARY
The group has experienced major growth in revenue and profit during the period under review. As
a result, the majority of the movements in the statement of comprehensive income, the statement
of financial position and the cash flow statement is from growth in all our market segments. This is
also the first financial year incorporating the full performance of the Parsec Holdings group that
was acquired on 1 June 2015.
Significant movement other than noted above, comparing the period ended 30 September 2016
with the period ended 31 August 2015, include the following:
CASH FLOW STATEMENT
The cash balance has grown by R 17.1 million for the period under review, but was influenced by
delayed customer payments at the end of the reporting period. Most of these outstanding
payments were received subsequent to period end.
As a result of the high growth experienced in the period under review, the group managed to
create positive cash flow from operating activities which increased to R24 million from an outflow
of R55.6 million in the previous interim reporting period. This is the result of active management
of the group's inventory, as well as payment terms with key customers and suppliers.
STATEMENT OF COMPREHENSIVE INCOME
The taxation expense of R13.6 million comprises deferred tax credit of R1.7 million and current
taxation of R15.3 million.
STATEMENT OF FINANCIAL POSITION
Some of the line items on the statement of financial position that have shown significant changes
when compared to the August 2015 period have been included in the notes to the financial
information so as to give some context and explanation to these movements.
Other financial liabilities of R6.4 million relates to the outstanding balance of the cash
consideration payable for the Parsec Holdings acquisition. The total original cash consideration
payable of R21.9 million, was further reduced during this 6 month period by the third tranche
payment of R2.3 million.
NOTES TO THE FINANCIAL INFORMATION
1. Headline earnings per share
for the 6 months ended 30 September 2016
6 months 6 months 13 months
ended ended ended
30 September 2016 31 August 2015 31 March 2016
(Reviewed) (Reviewed) (Audited)
R'000 R'000 R'000
Profit attributable to ordinary
shareholders 34 987 4 304 19 974
Basic earnings per share
(cents) 7.59 1.32 4.86
Diluted basic earnings per
share (cents) 7.59 1.32 4.86
Reconciliation of headline
earnings:
Profit attributable to ordinary
shareholders 34 987 4 304 19 974
Profit on disposal of property,
plant and equipment (117) - (21)
Total tax effect of adjustments 33 - 6
Headline earnings
attributable to ordinary
shareholders 34 903 4 304 19 958
Headline earnings per share
(cents) 7.57 1.32 4.86
Diluted headline earnings per
share (cents) 7.57 1.32 4.86
Weighted average number of
shares in issue 461 038 321 324 954 810 410 797 070
2. Earnings before interest, taxation, depreciation and amortisation (EBITDA)
for the 6 months ended 30 September 2016
6 months 6 months 13 months
ended ended ended
30 September 2016 31 August 2015 31 March 2016
(Reviewed) (Reviewed) (Audited)
R'000 R'000 R'000
Operating profit 51 064 6 846 32 079
Depreciation and amortisation 6 154 2 205 10 759
EBITDA 57 218 9 051 42 838
3. Property, plant and equipment
30 September 31 August 2015 31 March
2016 2016
(Reviewed) (Reviewed) (Audited)
R'000 R'000 R'000
Total property, plant and equipment at book 52 107 43 982 43 053
value
To cater for the growth experienced within the group, we have invested, in amongst others,
additional manufacturing equipment in this reporting period to increase our delivery capacity. This
was the main contributor to the increase in property, plant and equipment in the past 6 months.
4. Inventories
30 September 31 August 2015 31 March
2016 2016
(Reviewed) (Reviewed) (Audited)
R'000 R'000 R'000
Inventories comprise:
- Raw materials and finished goods 52 903 47 668 62 381
- Work in progress 38 176 14 102 22 393
91 079 61 770 84 774
The current level of inventory is in line with the increase in business activities, and taking into
account that R 38.2 million of the inventory is Work in Progress that is committed to current
projects, the group is comfortable with the level of inventory being held.
5. Trade and other receivables
30 September 31 August 31 March 2016
2016 2015
(Reviewed) (Reviewed) (Audited)
Name R'000 R'000 R'000
- Trade debtors 126 054 69 962 102 201
- Sundry debtors and 926 767 1 230
deposits
- Retention debtors 409 925 407
- Prepayments 4 142 850 9 239
- Value added tax 13 433 - 3 656
- Project receivables 1 775 1 386 4 949
(Work-in-progress) 146 739 73 890 121 682
In line with increased business activities during the first 6 months, trade debtors have increased
significantly from the previous interim reporting period. It is however in line with year-end
31 March 2016 trade debtors, taking into account that the group had some delayed customer
payments at the end of the September 2016 reporting period. Most of these outstanding payments
have been received subsequent to September 2016.
A delay in receiving Value Added Tax refunds from the South African Revenue Services has also
increased our debtors and negatively affected our cash flow for the period under review.
6. Interest bearing borrowings
30 September 31 August 2015 31 March
2016 2016
(Reviewed) (Reviewed) (Audited)
R'000 R'000 R'000
Non-current liabilities
Instalment sale agreements 8 913 4 269 3 420
Interest bearing borrowings 28 549 29 729 29 089
37 462 33 998 32 509
Current liabilities
Instalment sale agreements 4 809 1 848 1 836
Interest bearing borrowings 1 049 571 867
5 858 2 419 2703
The increase in instalment sale agreements correlates roughly to the increase in property plant
and equipment (refer note 3) as most of the manufacturing equipment bought in this period was
financed via instalment sale agreements.
7. Trade and other payables
30 September 31 August 2015 31 March
2016 2016
(Reviewed) (Reviewed) (Audited)
Name R'000 R'000 R'000
- Trade creditors 102 050 55 580 118 451
- Accrued leave 3 607 3 414 2 451
- Sundry creditors 52 277 12
- Value added tax 812 440 774
- Advance payments 41 462 17 838 22 570
- Accruals 11 385 4 367 8 124
159 368 81 916 152 382
In line with the growth in the business activities, the group experienced a growth in trade and
other payables relating to increased business activities compared to our previous 6month period.
When comparing to our 31 March 2016 figures, we can see that the group has actively managed
the trade creditors down and the advance payments up, which in turn helps to manage the group's
cash flow more efficiently.
STATEMENT OF COMPLIANCE, BASIS OF PREPARATION AND AUDIT REPORT
The condensed consolidated interim financial statements are prepared in accordance with
International Financial Reporting Standard, (IAS) 34 Interim Financial Reporting, the SAICA
Financial Reporting Guides as issued by Accounting Practices Committee and Financial
Pronouncements as issued by Financial Reporting Standards Council and the requirements of the
Companies Act of South Africa. The accounting policies applied in the preparation of these interim
financial statements are in terms of International Financial Reporting Standards and are consistent
with those applied in the previous annual financial statements. The directors take full responsibility
for the preparation of the condensed interim financial statements.
These interim condensed consolidated financial statements for the period ended 30 September
2016 have been reviewed by PricewaterhouseCoopers Incorporated, which expressed an
unqualified review conclusion. A copy of the auditor's report is available for inspection at the
company's registered office.
The auditor's report does not necessarily report on all the information contained in these financial
results. Shareholders are therefore advised that in order to obtain a full understanding of the
nature of the auditor's engagement they should obtain a copy of the auditor's report together with
the accompanying financial information from the issuers registered office.
PREPARER
These results were prepared under the supervision of Burt Lamprecht CA (SA), the Chief Financial
Officer.
GOING CONCERN
The directors have reviewed the group's budget and cash flow forecast for the year to September
2017. On this basis and in light of the group's current financial position, the directors are satisfied
that the group will continue to operate for the foreseeable future and have adopted the going
concern basis in preparing these reviewed provisional financial results.
DIRECTORATE
As communicated to shareholders in the SENS announcement released on 30 June 2016. The
following changes came into effect on 1 October 2016:
Rynier van der Watt, previously the Chief Executive in charge of Strategy, Mergers & Acquisitions
has been appointed as Group Chief Executive Officer of Ansys.
Teddy Daka, previously the Group Chief Executive Officer has been appointed as the Executive
Chairperson of the Board.
Nonhlanhla Mjoli-Mncube, previously the Non-Executive Chairperson of the Board has been
appointed as the Lead Independent Non-Executive Director.
EVENTS SUBSEQUENT TO PERIOD END
The directors are not aware of any significant events, other than noted above, that have occurred
between the period ended 30 September 2016 and the date of this report that may materially
affect the results of the Group for the period or its financial position as at
30 September 2016.
By order of the board
Rynier van der Watt Burt Lamprecht
Chief Executive Officer Chief Financial Officer
29 November 2016
Directors
CP Bester; T Daka* (Executive Chairman); Dr. SJ Khoza; BC Lamprecht* (CFO); N Medupe; NS Mjoli-Mncube (Lead Independent Director);
SP Mzimela, AR van der Watt* (CEO)
*Executive
Company secretary
M van den Berg
Telephone: +27 12 749 1800
Facsimile: +27 12 665 2767
Website: www.ansys.co.za
Registered office: 140 Bauhinia Street Centurion, Pretoria 0157 (PO Box 95361, Waterkloof,
Pretoria)
Designated adviser: Exchange Sponsors 2008 (Pty) Ltd
Transfer secretaries: Computershare Investor Services (Pty) Ltd
Date: 29/11/2016 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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