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ANS
ANS
ANS - Ansys - Reviewed Provisional Annual Results For The Year Ended
28 February 2009
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 2009
CONDENSED CONSOLIDATED BALANCE SHEETS
28 29
February February
2009 2008
(Reviewed) (Audited)
R`000 R`000
Assets
Non-current assets
Property, plant and equipment 6 594 5 210
Intangible assets 29 282 35 725
Deferred tax asset 1 116 -
Current assets
Inventories 5 799 6 194
Trade and other receivables 52 235 44 272
Cash and cash equivalents 6 965 20 608
Other financial assets 1 012 190
Total assets 103 003 112 199
Equity and liabilities
Equity
Share capital 42 287 48 496
Retained earnings 23 735 27 806
Liabilities
Non-current liabilities
Finance leases 665 1 187
Other financial liabilities - 5 255
Deferred tax - 516
Current liabilities
Finance leases 523 840
Cash and cash equivalents 9 115 -
Trade and other payables 18 950 24 567
Other financial liabilities 5 871 813
Current tax payable 1 857 2 719
Total equity and liabilities 103 003 112 199
Number of shares in issue 140 271 140 000
008 000
Net asset value per share (cents) 47.07 54.50
Tangible net asset value per 26.19 28.98
share (cents)
CONDENSED CONSOLIDATED INCOME STATEMENTS
28 29
February February
2009 2008
(Reviewed) (Audited)
R`000 R`000
Revenue 120 171 121 940
Gross profit 52 144 44 483
Other income 90 195
Operating costs (47 632) (19 080)
EBITDA 4 602 25 598
Depreciation and amortisation (1 544) (587)
Profit/(loss) before interest and 3 058 25 011
taxation
Interest paid (1 550) (478)
Interest received 908 1 410
(Loss)/profit before taxation 2 416 25 943
Taxation (887) (7 941)
(Loss)/profit for the period 1 529 18 002
Basic earnings per share (cents) 1.09 13.64
Diluted earnings per share 1.06 13.44
(cents)
Headline earnings per share 1.09 13.71
(cents)
Diluted headline earnings per 1.06 13.51
share (cents)
Dividends per share (cents) - 4
Weighted average number of shares 140 134 131 945
in issue 390 205
Diluted average number of shares 144 503 133 913
in issue 386 631
Reconciliation of headline
earnings:
Net profit attributable to 1 529 18 002
ordinary shareholders
Adjusted for profit on disposal 6 123
of property, plant and equipment
Total tax effect of the (2) (35)
adjustments
Headline earnings attributable to 1 533 18 090
ordinary shareholders
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Vendor Accumulat Total
capital shares ed profit
Balance at 1 March - 13 357 13 357
2007
Share issue 30 000 30 000
Share issue expenses (1 632) (1 632)
Dividends paid (3 553) (3 553)
Shares to be issued 20 128 20 128
as result of business
combination
Profit for the year 18 002 18 002
Balance at 1 March 28 368 20 128 27 806 76 302
2008
Share issue 813 (813) -
Dividends paid (5 600) (5 600)
Profit for the year 1 529 1 529
Re-assessment of (6 209) (6 209)
shares to be issued
as result of business
combination
Balance as at 28 29 181 13 106 23 735 66 022
February 2009
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
28 February 29 February
2009 2008
(Reviewed) (Audited)
R`000 R`000
Cash flows from operating
activities
Cash generated from operations (8 950) 21 437
Finance income 908 1 410
Finance costs (489) (479)
Income tax paid (3 382) (10 179)
Dividends paid (5 600) (3 553)
Net cash from operations (17 513) 8 637
Cash flows from investing
activities
Acquisition of subsidiaries - (26 440)
Acquisition of business - (10 696)
Purchase of property, plant and (2 667) (1 344)
equipment
Disposal of property, plant and - (69)
equipment
Purchase of intangible assets (2 050) (1 386)
Net cash flow from investing (4 717) (39 935)
activities
Cash flow from financing activities
Proceeds from share capital issued - 48 496
Proceeds from other financial 310 1 426
liabilities
Finance lease repayments (838) (387)
Net cash flow from financing (528) 49 536
activities
Total cash movement for the year (22 758) 18 238
Cash at the beginning of the year 20 608 2 370
Total cash at end of the year (2 150) 20 608
SEGMENT REPORT
28 February 29 February
2009 2008
(Reviewed) (Audited)
R`000 R`000
Segment Revenue:
Rail 90 063 100 019
Defense 28 635 20 791
Industrial 1 270 434
Corporate Unallocated 203 696
Total 120 171 121 940
Operating (loss)/profit segment results (before net finance
cost, other gains and losses and taxation):
Rail 15 533 25 699
Defense (8 458) 9 775
Industrial 1 417 902
Corporate Unallocated (7 422) (10 379)
Total 1 069 25 997
NOTES TO THE PROVISIONAL FINANCIAL INFORMATION
1. Intangible assets
Cost Accumulated Carrying
amortisation value
R`000 R`000 R`000
As at 28 February 2009
Intangible assets 4 131 (827) 3 304
Purchased:
- Computer software 1 281 (827) 454
Internally generated:
- Signalling product 246 - 246
- AMMS Development 2 604 - 2 604
Goodwill 25 978 - 25 978
Total 30 109 (827) 29 282
As at 29 February 2008
Intangible assets 2 081 (572) 1 509
Purchased:
- Computer software 739 (572) 167
Internally generated:
- Signalling product 246 - 246
- AMMS Development 1 096 - 1 096
Goodwill 34 216 - 34 216
Total 36 297 (572) 35 725
The carrying value of the intangible assets is reconciled as follows:
Acquisition
Busine Re-
Openin Subsidi ss assessme Additi Amortisa Closi
g ary nt of ons tion ng
balanc goodwill balan
e ce
R`000 R`000 R`000 R`000 R`000 R`000
R`000
At 29 February 2009
Intangible 1 509 - - - 2 050 (255) 3 304
assets
Purchased:
- Computer 167 - - - 542 (255) 454
software
Internally - - - - - -
generated:
- Signalling 246 - - - - - 246
product
- AMMS 1 096 - - - 1 508 - 2 604
Development
Goodwill 34 216 - - (8 238) - - 25
978
Total 35 725 - - (8 238) 2 050 (255) 29
282
The re-assessment of goodwill relates to the excess of the re-calculated
purchase consideration over the fair value of the assets acquired as part of
the business combinations concluded in the prior year. The purchase
consideration was re-assessed due to the difference between the forecasted
results of 28 February 2009 and 2010 as per the initial purchase agreement to
the actual results achieved at 28 February 2009 and the re-assessed 28
February 2010 forecast.
Acquisition
Busin Re-
Openin Subsidi ess assessmen Additi Amortisa Closi
g ary t of ons tion ng
balanc goodwill balan
e ce
R`000 R`000 R`000 R`000 R`000
R`000 R`000
At 28 February
2008
Intangible 158 54 - - 1 386 (89) 1 509
assets:
Purchased:
- Computer 158 54 - - 44 (89) 167
software
Internally
generated:
- Signalling - - - - 246 - 246
product
- AMMS - - - - 1 096 - 1 096
Development
Goodwill - 24 821 9 395 - - - 34
216
Total 158 24 875 9 395 - 1 386 (89) 35
725
COMMENTARY
Introduction
During the first half of the financial year, financial performance was
hampered by a low level of customer tender adjudication. However the company
returned to improved profitability levels in the second half, even as it was
bedding down the acquisitions and facing up to the challenges of the world
financial meltdown. The disappointing performance for the full year represents
a departure from past trends as Ansys adapts to the new global reality. These
adaptions include governance reform, curtailment of expenses and the
strengthening of management and market development.
Two of the acquisitions made in the last financial year, Optocon Systems (Pty)
Ltd ("Optocon") and QuadSoft (Pty) Ltd ("QuadSoft") were driven into
significant growth and profitability. The Emerging Signals division ("Emerging
Signals") had a very poor year, but the management and financial
administration have been changed to re-establish the profitability of this
division, which is still strategically imperative to Ansys Limited`s rail
operations.
Financial Results
Revenue generation for the year decreased marginally from R122 million for the
year ended 29 February 2008 to R120 million for the year ended 28 February
2009. Profit before tax for the year decreased from R25.9 million to R2.4
million due to the low level of adjudication of tenders by its main customers
during the first half of the year.
The results achieved in the first half of the year, revenue of R 41 million
and a loss after tax of R6.6 million improved during the second half of the
year to revenue of R 79 million and profit after tax of R8.2 million for the
six months.
It is therefore clear that Ansys managed to recover to its normal
profitability levels during the second half of the year.
Acquisitions
Optocon, QuadSoft and Emerging Signals (collectively "the acquisitions") were
acquired during the previous financial year ended 29 February 2008 with
effective dates of 1 December 2007. The year end results include full year
results of these acquisitions.
The purchase consideration in respect of the acquisitions is subject to profit
warranties. The actual results achieved for Optocon and Emerging Signals were
lower than the initial profit forecasts. Therefore, the purchase
considerations for these two acquisitions were re-assessed at 28 February
2009. The purchase consideration for QuadSoft did not require re-assessment at
year end as the profit warranties were achieved for the year ended 28 February
2009.
The net effect of re-assessments was as follows:
- Intangible assets
Goodwill, included in intangible assets, decreased by R8,2 million from
the year ended 29 February 2008 to the current 28 February 2009 review
period.
- Liabilities
Non-current and current liabilities have decreased by R2 million as a
result of the re-assessment of the liabilities relating to the
acquisitions.
Furthermore, the non-current liabilities decreased by R5 million from the
year ended 29 February 2008 to the current 28 February 2009 review period
due to the change in the status of the deferred payments included in
other financial liabilities from non-current to current liabilities.
- Capital and Reserves
Included in capital and reserves are vendor shares that relate to the
issue of shares for the acquisitions. The vendor shares decreased by R6.2
million from the year ended 29 February 2008 to the current 28 February
2009 review period as a result of profit warranties not being met during
the current financial year.
Current assets
A significant part of the decrease in current assets is attributable to the
decrease in cash and cash equivalents. The decrease in cash is mainly a result
of cash payments of R 8,8 million for the acquisitions (included under other
payables and other financial liabilities in the prior financial year), R 5,6
million for dividends and R 10,3 million for working capital.
Prospects
The 2010 financial year has begun with the issue of an approximately R1
billion signals tender by the Passenger Rail Agency of South Africa (PRASA)
which was formally known as MetroRail and the SARCC. The tender is for the re-
signaling of Gauteng and is expected to be followed by another four tenders
addressing the rest of the country. The Ansys Group is submitting two offers
based respectively on Westinghouse and General Electric equipment. This
signals tender is the biggest such tender to be issued in South Africa in
decades. Adjudication of the first stage (Gauteng) is expected in this
financial year. The work is planned to span the next four years and is of
sufficient magnitude to keep the whole local rail signals industry busy.
In the last financial year, Emerging Signals successfully concluded a yard
automation pilot site using General Electric equipment for Transnet Freight
Rail. The national implementation is expected to be adjudicated in this
financial year resulting in contract awards to industry segment participants
in excess of R150 million with the work spreading over the next four years.
The group order book is currently at R82.4 million. This represents a
considerable improvement on the order situation this time last year.
Dividend policy
The Group has historically exercised a policy of paying dividends to
shareholders, having due regard to the Group`s profit, future capital
requirements and cash flow position. In the light of the low profitability for
2009, no dividend will be payable for this year.
Changes to the board of directors
Ansys has restructured its board of directors ("the board") in order to ensure
a more streamlined board of which the composition will be more in line with
the King Commission recommendations and sound Corporate Governance principles.
The reduction in board members from ten to six will enhance efficiency and
accelerate decision-making processes.
With effect from 1 November 2008, Johan Prinsloo, Onno Sakkers, Ian Lamprecht
and Johan Kotze, had resigned from the board as executive directors of Ansys
and had taken up executive positions on the Executive Committee at year end.
The reconstituted board now comprises:
Executive directors:
Alan Holloway (Chief Executive Officer)
Rachelle Grobbelaar (Chief Financial Officer)
Rudi Barnard
Non-executive directors:
Teddy Daka (Chairman)
Mzolisi Goodman Diliza
Dr Johannes Lodewikus Steyn (appointed 1 November 2008)
The Executive Committee will comprise the following executives:
Alan Holloway
Rachelle Grobbelaar
Rudolph Francois Barnard
Onno Sakkers
Ian Lamprecht
Johan Kotze;
Elsabe van der Westhuizen; and
Tristan Goss (Managing director of Optocon Systems (Pty) Ltd)
Johan Malan (Managing director of QuadSoft (Pty) Ltd)
Johan van de Pol (Managing director of Emerging Signals division of Ansys Ltd)
Broad Based Black Economic Empowerment ("BBBEE")
A special committee was established by the board of directors to actively
manage the company`s BBBEE status. It is the company`s aim to become at
least a Level 6 contributor.
Statement of compliance and basis of preparation
The provisional reviewed financial information for the year ended 28 February
2009 has been presented in accordance with, and containing 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
International Financial Reporting Standards, the Companies Act of South Africa
and the Listings Requirements of 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 Spencer
Steward, 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.
Appreciation
We wish to thank our dedicated 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 staff and
shareholder investment to execute them. Special thanks are thus due to our
customers, staff and shareholders who are loyally assisting Ansys through this
time of world economic turmoil.
By order of the Board
12 May 2009
Alan Holloway Rachelle Grobbelaar
Chief Executive Officer Chief Financial Officer
CORPORATE INFORMATION
Non executive directors: T Daka (Chairman), MG Diliza, Dr JL Steyn
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: 12/05/2009 07:05:10 Produced by the JSE SENS Department.
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