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ANS
ANS
ANS - Ansys - Reviewed Interim Results for the six months ended 31 August 2010
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 INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2010
HIGHLIGHTS
- Revenue up by 20%
- EBITDA of R2.35 million
- Order book in excess of R150 million
- Disposal of loss making Optocon Systems (Pty) Ltd
- HEPS of 3.64 cents from continuing operations
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
6 months 6 months Year
ended ended ended
31 August 31 28-
August February
(Reviewed) (Reviewe (Audited
d) )
2010 2009 2010
R`000 R`000 R`000
Assets
Property, plant and 7 044 8 833 7 887
equipment
Intangible assets 30 374 30 481 29 347
Deferred tax asset 6 617 1 371 6 465
Current assets 44 035 52 889 45 832
Total assets 88 070 93 574 89 531
Equity and liabilities
Capital and reserves 49 055 63 831 48 757
Non-current liabilities 2 962 474 2 371
Current liabilities 346 053 29 269 38 413
Total equity and 88 070 93 574 89 531
liabilities
Number of shares in issue 144 117 142 228 142 228
056 041 041
Net asset value per share 34.0 44.9 34.3
(cents)
Tangible net asset value 13.0 23.4 13.6
per share (cents)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months Year ended
ended ended
31 August 31 August 28 February
(Reviewed) (Reviewed) (Audited)
2010 2009 2010
R`000 R`000 R`000
Revenue 67 218 56 032 97 327
Gross profit 27 612 25 249 34 305
Other income 393 198 326
Operating costs (25 655) (25 147) (50 324)
EBITDA 2 350 300 (15 693)
Depreciation (1 069) (1 142) (1 962)
Profit/(loss) before 1 281 (842) (17 655)
interest and taxation
Interest paid ( 389) (336) (855)
Interest received 44 183 220
Profit/(loss) before 936 (995) (18 290)
taxation
Taxation (628) (556) 2 584
Profit/(loss) for the 308 (1 551) (15 706)
period
Basic earnings/(loss) 0.21 (1.09) (11.10)
per share (cents)
Diluted 0.21 (1.08) (10.95)
earnings/(loss) per
share (cents)
Headline 0.21 (1.09) (10.25)
earnings/(loss)per
share (cents)
Diluted headline 0.21 (1.08) (10.95)
earnings/(loss) per
share
Weighted average 143 275 212 141 089 984 141 517 718
number of shares in
issue
Diluted average number 143 306 398 143 306 398 143 406 733
of shares in issue
Reconciliation of
headline
earnings/(loss):
Profit/(loss) 308 (1 551) (15 706)
attributable to
ordinary shareholders
Adjusted for goodwill 1 166
impairment
Adjusted for - - 29
profit/(loss) on
disposal of property,
plant and equipment
Headline 308 (1 551) (14 511)
earnings/(loss)
attributable to
ordinary shareholders
Pro-forma earnings per share from continuing operations if Optocon was disclosed
as a discontinuing operation during the current interim review period (refer to
the commentary section in for detail):
6 months 6 months Year
ended ended ended
31 August 31 August 28
February
(Reviewed) (Reviewed) (Audited)
2010 2009 2010
R`000 R`000 R`000
From continuing operations:
Basic earnings/(loss) per 3.64 (0.31) (4.26)
share (cents)
Diluted earnings/(loss) per 3.64 (0.30) (4.20)
share (cents)
Headline earnings/(loss)per 3.64 (0.31) (3.42)
share (cents)
Diluted headline 3.64 (0.30) (3.37)
earnings/(loss) per share
(cents)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Vendor Retained Total
capital shares income
Balance at 1 March 29 181 13 106 23 735 66 022
2009
Share issue 5 869 (5 869) - -
Re-assessment of - (643) - (643)
shares to be issued as
result of business
combination
Loss for the period - - (1 551) (1
ending 31 August 2009 551)
Balance as at 31 35 050 6 594 22 184 63 828
August 2009
Re-assessment of - (926) - ( 926)
shares to be issued as
result of business
combination
Loss for the period - - (14 155) (14
ending 28 February 155)
2010
Balance at 1 March 35 050 5 668 8 029 48 747
2010
Profit for the period - - 308 308
ending 31 August 2010
Share issue 5 668 (5 668) - -
Balance as at 31 40 718 - 8 337 49 055
August 2010
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
6 6 Year
months months ended
ended ended
31 31 28
August August February
2010 2009 2010
(Review (Review (Audited
ed) ed) )
R`000 R`000 R`000
Cash flows from operating 1 774 (588) (14 335)
activities before working
capital
Changes in working capital (64) 7 439 26 714
Cash flows from operating 1 710 6 851 12 379
activities
Cash flows from investing (1 579) (4 985) (7 599)
activities
Cash flows from financing ( 50) (4 876) (6 477)
activities
Cash flows for the period 81 (3 010) (1 697)
Cash and Cash equivalents at (3 847) (2 150) (2 150)
beginning of period
Cash and Cash equivalents at (3 766) (5 160) (3 847)
end of period
CONDENSED SEGMENT REPORT
6 months ended 6 months Year
ended ended
31 August 31 28
August February
(Reviewed) (Reviewe (Audited
d) )
2010 2009 2010
Segment Revenue:
Rail 43 708 32 621 61 903
Defence 19 882 20 034 29 565
Industrial 3 576 1 551 5 757
Corporate 51 1 826 102
Unallocated
Total 67 218 56 032 97 327
Operating (loss)/profit segment results (before
interest and taxation):
Rail 1 673 3 490 1 380
Defence (208) (533) (12 714)
Industrial 400 (1 261) (1 379)
Corporate (584) (2 539) (4 942)
Unallocated
Total 1 281 ( 842) 17 655
COMMENTARY
Introduction
During the period under review, Ansys continued on its path of customer
diversification and achieved a significant improvement in revenue and cash flow.
Revenue increased 20% from R56 million in the prior interim period to R67.2
million in the current interim period and R1.7 million cash was generated from
operating activities.
In light of the above, the company achieved an interim earnings and headline
earnings per share of 0.21 cents (2009: earnings and headline loss per share of
1.0 cent).
The company expects the recovery in performance to continue into the second half
of the year, through the execution of current orders and the pending award of
contracts from new and existing customers and will maintain and improve its
profitability levels for the whole year.
Prospects
The Group order book is currently in excess of R150 million. A large portion of
these contracts are being executed at the moment, which is expected to ensure
that Ansys will deliver profitable results for the year ending 28 February 2011.
Contracts secured include projects such as two orders received from General
Electric South Africa Technologies (GESAT) for rail yard safety and also further
portable mine rope testers.
Post interim period events
Optocon Systems (Pty) Ltd (Optocon):
Optocon has been a major contributor to the group prior year losses and has also
been a consumer of free cash since 2008.
A decision was made in October 2010 by the Ansys board to dispose of the 100%
shareholding in the subsidiary. Therefore, Optocon was not disclosed as a
discontinuing operation during the current interim review period, but will be
disclosed as such during the full year ending 28 February 2011. The effective
date of the disposal was 1 November 2010.
The Optocon results were reported as part of the Defence segment results.
If Optocon was disclosed as a discontinuing operation during the current review
period, the group results would have been as follows:
6 months 6 months Year
ended ended ended
31 August 31 August 28
February
(Reviewed) (Reviewed) (Audited)
2010 2009 2010
R`000 R`000 R`000
Statement of comprehensive
income
From continuing operations:
Revenue from continuing 56 523 44 463 77 366
operations
EBITDA from continuing 5 487 573 (8 153)
operations
Profit/(loss) before taxation 5 839 416 (8 083)
from continuing operations
Taxation from continuing (628) (853) 2 052
operations
Profit/(loss) after taxation 5 211 (437) (6 031)
from continuing operations
Basic earnings/(loss) per 3.64 (0.31) (4.26)
share (cents)
Diluted earnings/(loss) per 3.64 (0.30) (4.20)
share (cents)
*Headline earnings/(loss)per 3.64 (0.31) (3.42)
share (cents)
*Diluted headline 3.64 (0.30) (3.37)
earnings/(loss) per share
(cents)
*The items adjusted for the headline and diluted headline
earnings per share related to the goodwill impairment adjustment
and the after tax loss on the sale of plant and equipment during
the 28 February 2010 financial year. These adjustments only
affected the continued operations.
From discontinuing
operations:
Revenue from discontinuing 10 695 11 569 19 961
operations
EBITDA from discontinuing (3 137) ( 273) (7 540)
operations
(Loss)/profit before taxation (4 903) (1 411) (10 207)
from discontinuing operations
Taxation from discontinuing - 297 532
operations
(Loss)/profit after taxation (4 903) (1 114) (9 675)
from discontinuing operations
Basic earnings/(loss) per (3.42) (0.79) (6.83)
share (cents)
Diluted earnings/(loss) per (3.42) (0.78) (6.75)
share (cents)
Headline earnings/(loss)per (3.42) (0.79) (6.83)
share (cents)
Diluted headline (3.42) (0.78) (6.75)
earnings/(loss) per share
(cents)
Financial Results
Net cash and cash equivalents
The cash inflows from operating activities decreased from the period ended 31
August 2009 to the current 31 August 2010 review period by R5.1 million. The
change was mainly due to the decrease in working capital. Refer to the comments
under current assets and current liabilities.
The cash outflows from investing activities decreased by R3.4 million from the
period ended 31 August 2009 to the current 31 August 2010 review period mainly
due to the decrease in the capital investment of property, plant and equipment
and development cost.
The cash outflows from financing activities decreased when compared to the prior
year interim period mainly due to the cash payment made in the prior year to
QuadSoft (Pty) Ltd ("Quadsoft").
Deferred taxation
A significant part of the changes in non-current assets and non-current
liabilities is attributable to the increase in the deferred tax asset and
deferred tax liabilities.
Deferred tax asset increased by R5 million from the prior year interim period as
a result of taxation losses being carried forward and deferred tax liabilities
that was disclosed separately under non-current liabilities.
Deferred tax liabilities increased by R2.7 million from the period year interim
period as a result of the transfer of deferred tax liabilities previously set
off against deferred tax assets, which are now separately disclosed.
Current assets
The decrease of R8.8 million in the current assets is due to the above normal
value of trade receivables at 31 August 2009, resulting from the completion of
rail and defense projects towards the end of the 2009 interim period.
Current liabilities
The increase in current liabilities of R6.8 million, from the prior interim
period results, was mainly due to the cash payment to QuadSoft and an increase
in trade and other payables. The increase in the trade and other payables was
due to advance payments received on projects.
Dividend policy
No interim dividend has been declared.
Changes to the board of directors
There were no changes to the board of directors during the six months ending 31
August 2010.
Broad Based Black Economic Empowerment ("BBBEE")
There were no changes to the Group`s BBBEE status. Ansys is still a level 6
contributor.
Basis of preparation and accounting policies
The condensed interim financial information for the six months ended 31 August
2010 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 28 February 2010. This announcement has
been prepared in accordance with the Listings Requirements of the JSE Limited.
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 28 February 2010.
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 2010. Their review report is available for inspection at the
company`s registered office.
Appreciation
We thank our loyal staff and management for their ongoing commitment and
persistent efforts to drive our group through difficult trading conditions. Our
people have an excellent and long-standing track record of rising above tough
circumstances and to make this an even greater organization.
We also thank our business partners and advisors for their valuable input and
our clients, suppliers and most importantly our shareholders for their ongoing
support.
By order of the Board
1 November 2010
Alan Holloway Rachelle Grobbelaar
Chief Executive Officer Chief Financial Officer
CORPORATE INFORMATION
Non executive directors: T Daka (Chairman)
Executive directors: RF Barnard, A Holloway (CEO), R Grobbelaar
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) Limited
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: 01/11/2010 07:30:01 Produced by the JSE SENS Department.
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