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ANS
ANS
ANS - Ansys Limited - Reviewed provisional annual results for the year ended 28
February 2011
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 2011
HIGHLIGHTS:
* Revenue from continuing operations up by 26%
* EBITDA from continuing operations of R1.98 million
* Disposal of loss making Optocon Systems (Pty) Ltd
* EPS and HEPS of 0.14 cents from continuing operations
* Integration and merging of operations completed
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Year ended Year ended
28 February 2011 28 February 2010
(Reviewed) (Audited)
R`000 R`000
Assets
Non-current assets
Plant and equipment 1 641 7 887
Intangible assets 32 276 29 347
Deferred tax asset 11 161 6 465
Current assets
Inventories 5 390 10 156
Trade and other 12 836 32 261
receivables
Cash and cash 781 3 355
equivalents
Other financial assets - 60
Current tax receivable 187 -
Total assets 64 272 89 531
Equity and liabilities
Equity
Capital and reserves 37 171 48 747
Non-current liabilities
Borrowings - 388
Deferred tax liability 4 055 1 983
Current liabilities
Borrowings 4 044 274
Trade and other 16 666 30 048
payables
Other financial 19 -
liabilities
Cash and cash 2 317 7 202
equivalents
Current tax payable - 889
Total equity and 64 272 89 531
liabilities
Number of shares in 149 117 056 142 228 041
issue
Net asset value per 24.9 34.3
share (cents)
Tangible net asset 3.2 13.6
value per share (cents)
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended Year ended
28 February 28 February
2011 2010
(Reviewed) (Audited)
R`000 R`000
CONTINUING OPERATIONS:
Revenue 97 877 77 366
Gross profit 31 879 25 002
Other income 342 277
Operating costs (30 246) (32 789)
EBITDA 1 975 (7 510)
Depreciation and amortization (3 772) (2 541)
Loss before interest and taxation (1 797) (10 051)
Interest received 63 184
Interest paid ( 694) ( 695)
Loss before taxation (2 428) (10 562)
Taxation 2 624 2 052
Profit/(loss) for the year from 196 (8 510)
continuing operations
DISCONTINUED OPERATIONS:
Loss for the year (13 432) (7 728)
Taxation - 532
Loss for the year from discontinued (13 432) (7 196)
operations
Basic loss per share (cents) (9.22) (11.10)
Diluted loss per share (cents) (9.22) (10.95)
Headline loss per share (cents) (3.86) (10.25)
Diluted headline loss per share (3.86) (10.12)
Weighted average number of shares in 143 637 146 141 517 718
issue
Diluted average number of shares in 143 637 146 143 406 733
issue
Reconciliation of headline loss:
Loss attributable to ordinary (13 236) (15 706)
shareholders
Adjusted for goodwill impairment - 1 166
Adjusted for the loss made on the 7 686 -
disposal of subsidiary
Adjusted for (profit)/loss on (11) 40
disposal of plant and equipment
Tax effect on adjustments 3 (11)
Headline loss attributable to (5 558) (14 511)
ordinary shareholders
Continuing Discontinued Continuing Discontinued
operations operations operations operations
Year ended Year ended Year ended Year ended
28-Feb 28-Feb 28-Feb 28-Feb
(Reviewed) (Reviewed) (Audited) (Audited)
2011 2011 2010 2010
Basic
earnings/(loss) 0.14 (9.35) (6.01) (5.08)
per share (cents)
Diluted
earnings/(loss) 0.14 (9.35) (5.93) (5.02)
per share (cents)
Headline
earnings/(loss)per 0.14 (4.00) (5.99) (4.26)
share (cents)
Diluted headline
earnings/(loss) 0.14 (4.00) (5.91) (4.20)
per share
Weighted average 143 637 143 637 146 141 517 141 517 718
number of shares 146 718
in issue
Diluted average 143 637 143 637 146 143 406 143 406 733
number of shares 146 733
in issue
Reconciliation of
headline
earnings/(loss):
Profit/(loss)
attributable to 196 (13 432) (8 510) (7 196)
ordinary
shareholders
Adjusted for
goodwill - - - 1 166
impairment
Adjusted for the
loss made on the - 7 686 - -
disposal of
subsidiary
Adjusted for - -
(profit)/loss on (11) 40
disposal of plant
and equipment
Total tax effects -
of adjustments - 3 ( 11)
Headline (5 754) (8 481)
earnings/(loss) 196 (6 030)
attributable to
ordinary
shareholders
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Issued Vendor Retained Total
share shares income / equity
capital (Accumulated
loss)
Balance at 1 March 29 181 13 106 23 735 66 022
2009
Movements during the
year
Shares issued 5 869 (5 869) - -
Re-assessment of - (1 569) - (1 569)
shares to be issued as
result of business
combination
Loss for the year - - (15 706) (15
706)
Balance as at 28 35 050 5 668 8 029 48 747
February 2010
Movements during the
year
Shares issued 7 328 (5 668) - 1 660
Loss for the year - - (13 236) (13
236)
Balance as at 28 42 378 - (5 207) 37 171
February 2011
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended Year ended
28 28 February 2010
February
2011
(Reviewed) (Audited)
R`000 R`000
Cash flows from operating activities (4 723) (14 335)
before working capital
Changes in working capital 7 887 26 714
Cash flows from operating activities 3 164 12 379
Cash flows from investing activities (6 407) (7 599)
Cash flows from financing activities 5 554 (6 477)
Cash flows for the year 2 311 (1 697)
Cash and Cash equivalents at (3 847) (2 150)
beginning of year
Cash and Cash equivalents at end of (1 536) (3 847)
the year
CONDENSED SEGMENTREPORT
Year ended Year ended Year ended
28-Feb 28-Feb 28-Feb
(Reviewed) (Reviewed) (Reviewed)
2011 2011 2011
TOTAL CONTINUING DISCONTINUED
OPERATIONS OPERATIONS
Segment Revenue:
Rail 76 248
76 248 -
Defense 23 896 12
11 378 518
Industrial 10 149
10 149 -
Corporate Unallocated 102
102 -
Total 110 395 12
97 877 518
Operating loss segment results (before interest and taxation):
Rail 1 708
1 708 -
Defense (7 976) (13
5 327 303)
Industrial (1 414)
(1 414) -
Corporate Unallocated (7 418)
(7 418) -
Total (15 100) (13
(1 797) 303)
Year ended Year ended Year ended
28-Feb 28-Feb 28-Feb
(Audited) (Audited) (Audited)
2010 2010 2010
TOTAL CONTINUING DISCONTINUED
OPERATIONS OPERATIONS
Segment Revenue:
Rail 61 903
61 903 -
Defense 29 565 19
9 604 961
Industrial 5 757
5 757 -
Corporate Unallocated 102
102 -
Total 97 327 19
77 366 961
Operating loss segment results (before interest and taxation):
Rail 1 380
1 380 -
Defense (12 714) (7
(5 110) 604)
Industrial (1 379)
(1 379) -
Corporate Unallocated (4 942)
(4 942) -
Total (17 655) (7
(10 051) 604)
NOTES TO THE PROVISIONAL FINANCIAL INFORMATION
1 Discontinued operation
During the year the company disposed of all its shareholding in Optocon Systems
(Pty) Ltd, which formed part of the Defence segment.
The effect on the statements of comprehensive income:
Discontinued Discontinued
operations operations
Year ended Year ended
28-Feb 28-Feb
(Reviewed) (Audited)
2011 2010
R`000 R`000
Revenue 12 518 19 961
Gross profit 7 086 9 302
Other income 48 49
Operating costs (11 957) (15 892)
Loss on the disposal of (7 686) -
subsidiary
EBITDA (12 509) (6 541)
Depreciation and amortization ( 795) (1 063)
Loss before interest and (13 303) (7 604)
taxation
Interest received 5 36
Interest paid (134) (160)
Loss before taxation (13 432) (7 728)
Taxation - 532
Loss for the year from (13 432) (7 196)
discontinued operations
Other comprehensive income, net - -
of tax
Total comprehensive loss for (13 432) (7 196)
the year
The effect on the statements of cash flows:
2011 2010
R`000 R`000
Plant and equipment 4 818 -
Intangible assets 114 -
Inventory 3 548 -
Trade and other receivables 8 579 -
Trade and other payables (9 203) -
Finance leases (394) -
Cash and cash equivalents 224 -
Loss on disposal (7 686)
Total proceeds on disposal - -
Cash and cash equivalents (224) -
Net cash flow on disposal (224) -
COMMENTARY
The 2011 financial year has been a year of partial recovery from 2010.
Revenue generation from the continuing operations increased from R77.3 million
for the year ended 28 February 2010 to R97.8 million for the year ended 28
February 2011, mainly due to the award of the two orders secured from General
Electric South Africa Technologies ("GESAT") in the rail segment. Basic earnings
per share from continued operations improved from a basic loss per share of 6.0
cents to basic earnings per share of 0.14 cents.
Performance of the continuing operations has improved since 2010, but Optocon
Systems (Pty) Ltd ("Optocon") continued to disappoint until it was sold in
November 2010, at a large loss. As a result of that loss, the group experienced
a shortage of working capital. Ansys management has subsequently put a major
effort into the cash flow management of the company. Some of those efforts were
the placement of shares into the market, decreasing the payment cycles from our
customers, getting advance payments on projects as well as focusing on
accelerating invoicing on current orders.
The final integration and merging of all the remaining businesses acquired in
2007 under the Ansys management and trading style has been completed during the
first quarter of the 2012 financial year. As part of the integration process of
products and customers, the board decided during the 2011 financial year to
divisionalise the business of QuadSoft (Pty) Ltd ("QuadSoft") into the Rail
segment of Ansys. As part of the board`s strategic approach to reduce trading
risks and keep overheads minimal, Ansys is now trading from two premises rather
than four. One of these premises is a new 1300m2 assembly facility being set up
in Centurion to produce all of the group products.
Prospects for the 2012 financial year have improved dramatically with the
completion of the in-house developed Continuous Rope Monitoring System ("CRMS")
and the successful installation of the first model for AngloGold Ashanti`s Moab
Khotsong mine. A recent Mine Rope Symposium in Houston Texas confirmed the
uniqueness of this product and its world demand. The product will be produced at
the assembly facility and is expected to have a significant effect on future
profitability.
Rail business remains good and is the backbone of Ansys revenue. Yard safety and
further wayside readers are expected to continue the revenue growth from this
segment.
Ansys defence division continues to focus on the export of low cost sights to
meet the worldwide demand for the upgrade of wheeled armoured vehicles.
Ansys aspires to be a major high technology industrial conglomerate applying its
core competencies in the provision of electronic and software system solutions
in the Rail, Industrial and Mining markets worldwide. While it has significant
technology of its own, it freely co-operates with other similar companies in the
world to ensure that its customers are supplied with leading edge solutions.
"We make it work"
Financial Results
Disposal of subsidiary
Optocon was sold during the current financial year with effect from 1 November
2010. The year end results include eight months of Optocon`s results.
Refer to the notes on the provisional financial information for effect on the
statement of comprehensive income, statement of financial position and the
statement of cash flows.
Non-Current assets
The net decrease in non-current assets was due to the following:
* A decrease in plant and equipment of R 6.2 million was mainly due to
the disposal of Optocon. Refer to the notes of the provisional
financial information.
* An increase in the deferred tax asset of R4.6 million was mainly due
to the recognition of taxable losses during the current financial
year.
* The net increase in intangible assets of R2.9 million was due to the
increase in the capitalization of continuous rope monitoring system
("CRMS") development cost to the value of R5.3 million and the
amortization of the Ansys maintenance management system (AMMS) to the
value of R2.3 million. During the 2011 financial year an order was
received, from AngloGold Ashanti, for 8 CRMS units to be delivered in
the 2012 financial year.
Current assets
The net decrease in current assets was as follows:
* The majority of the decrease in inventory of R4.7 million was due to
the disposal of Optocon. Refer to the notes of the provisional
financial information.
* A significant part of the decrease in current assets is due to the
R19.4 million decrease in trade and other receivables. R8.5 million of
the decrease was due to the disposal of Optocon. The further decrease
of R10.9 million is due to the above normal value of trade receivables
at 28 February 2010, resulting from the completion of rail projects
towards the end of the 2010 financial year.
Current liabilities:
A significant part of the decrease in current liabilities was due to the
decrease in trade and other payables of R13.4 million. The decrease was mainly
due to the disposal of Optocon which affected the trade and other payables by
R9.2 million. Refer to the notes of the provisional financial information.
Also included as part of the trade and other payables of R16.6 million was
advance payments received on current projects to the value of R10.7 million.
These payments were mainly utilised on the development of intangible assets
during the 2011 financial year. The board wishes to point out that these advance
payments led to the current liabilities exceeding the current assets as at 28
February 2011, but it should be noted that the delivery on these projects will
occur during the 2012 financial year.
Placement of shares
During the last quarter of the 2011 financial year, Ansys placed five million
shares in the public market. These placements were part of the board`s efforts
to raise 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 the low profitability for 2011, no dividend will be
paid.
Changes to the board of directors
The following changes to the board of directors occurred during the financial
year and up to the date of this report:
DM Keebine (Non-executive director) - Appointed on 10 March 2011
FF Dantile (Non-executive director) - Appointed on 10 March 2011
Dr JL Steyn (Non-executive director) - Resigned on 1 March 2010
Broad Based Black Economic Empowerment ("BBBEE")
During the current year assessment Ansys maintained its rating of level 6
contributor.
Statement of compliance and basis of preparation
The provisional reviewed financial information for the year ended 28 February
2011 has been prepared in accordance with the framework concepts and the
measurement and recognition requirements of International Financial Reporting
Standards ("IFRS") and the AC500 standards as issued by the Accounting Practices
Board, the South African Companies Act, 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 results have been
prepared in accordance with accounting policies of the group that comply with
IFRS as well as the AC500 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 South Africa
Incorporated, who has 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 28 February 2010.
Appreciation
We wish to thank our customers, 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 employee and shareholder
investment to execute them.
By order of the Board
17 May 2011
Alan Holloway Rachelle Grobbelaar
Chief Executive Officer Chief Financial Officer
CORPORATE INFORMATION
Non executive directors: T Daka (Chairman), FF Dantile, DM Keebine
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: 17/05/2011 07:06:02 Produced by the JSE SENS Department.
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