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Ansys Limited HY 2014 results (South Africa)
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Ansys Limited HY 2014 results (South Africa)

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Ansys Limited HY 2014 results (South Africa)

Ansys Limited HY 2014 results (South Africa)

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    Ansys Limited HY 2014 results (South Africa) Ansys Limited HY 2014 results (South Africa) Document Transcript

    • ANSYS LIMITED REVIEWED GROUP INTERIM RESULTS 2013 HIGHLIGHTS n Basic loss per share improved by 73% n Gross profit margin improved by 32% REVIEWED PROVISIONAL ANNUAL n FOR expenses improved by R1.5 million RESULTS OperatingTHE YEAR ENDED 28 NOVEMBER 2009
    • CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION Note Assets Non-current assets 6 months ended 31 August 31 August 2013 2012 (Reviewed) (Reviewed) R000 R000 Year ended 28 February 2013 (Audited) R000 31 347 41 360 31 751 359 20 838 10 150 721 29 782 10 857 509 21 604 9 638 Current assets 20 201 24 633 31 873 Inventories Trade and other receivables Cash and cash equivalents Derivative financial assets Current tax receivable 8 671 11 470 60 – – 8 030 16 305 125 21 152 8 265 23 398 54 4 152 Total assets 51 548 65 993 63 624 Equity and liabilities Equity 34 719 39 728 37 435 Capital and reserves 34 719 39 728 37 435 Non-current liabilities 1 974 5 541 2 452 Deferred tax liability 1 974 5 541 2 452 Current liabilities 14 855 20 724 23 737 – 9 012 4 881 962 2 096 12 139 6 489 – 2 133 12 959 8 645 – Total liabilities 16 815 26 265 26 189 Total equity and liabilities 51 548 65 993 63 624 164 867 056 21.1 8.4 161 867 056 24.5 6.1 164 867 056 22.7 9.6 Plant and equipment Intangible assets Deferred tax asset Borrowings Trade and other payables Cash and cash equivalents Provisions Number of shares in issue Net asset value per share (cents) Tangible net asset value per share (cents) 1
    • CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 6 months ended 31 August 31 August 2013 2012 (Reviewed) (Reviewed) R000 R000 Year ended 28 February 2013 (Audited) R000 Revenue Cost of sales 27 539) (15 161) 43 486) (28 694) 81 259) (47 744) Gross profit Other income Operating costs Other losses Development cost impairment Goodwill impairment 12 378) 106) (15 379) ( 431) –) –) 14 792) 72) (16 904) (212) –) (7 907) 33 515) 444) (31 397) (347) (8 536) (7 907) Loss before interest and taxation Finance cost (3 324) (231) (10 159) (479) (14 228) (1 112) Loss before taxation Taxation (3 555) 839) (10 638) 923) (15 340) 2 792 Loss for the year (2 716) (9 715) (12 548) –) Other comprehensive income, net of tax –) Total comprehensive loss for the year (2 716) (9 715) (12 548) (1.6) (1.6) (6.0) (6.0) (7.7) (7.7) Basic loss per share (cents) Diluted loss per share (cents) Weighted average number of shares in issue Diluted average number of shares in issue 164 867 056) 164 867 056) 161 867 056) 162 162 946) 161 867 056) 162 162 946) CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Issued stated Retained income/ Total capital (Accumulated loss) equity R000 R000 R000 Balance as at 1 March 2012 46 728) 2 715) 49 443) –) (9 715) (9 715) 46 728) (7 000) 39 728) 540) –) –) (2 833) 540) (2 833) 47 268) (9 833) 37 435) –) (2 716) (2 716) 47 268) (12 549) 34 719) Movements during the year Loss for the period ending August 2012 Balance as at 31 August 2012 (Reviewed) Movements during the year Share issue Loss for the period ending February 2013 Balance as at 28 February 2013 (Audited) Movements during the year Loss for the period ending August 2013 Balance as at 31 August 2013 (Reviewed)
    • CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 6 months ended 31 August 31 August 2013 2012 (Reviewed) (Reviewed) R000 R000 Year ended 28 February 2013 (Audited) R000 Cash flows from operating activities before working capital Changes in working capital (3 165) 8 543) (1 234) 3 953) 4 582) (2 555) Cash flows from operating activities 5 378) 2 719) 2 027) Cash flows from investing activities 525) (3 286) (5 397) Cash flows from financing activities (2 133) (1 360) (784) Cash flows for the year Cash and cash equivalents at beginning of period 3 770) (8 591) (1 927) (4 437) (4 153) (4 438) Cash and cash equivalents at end of the period (4 821) (6 364) (8 591) 6 months ended 31 August 31 August 2013 2012 (Reviewed) (Reviewed) R000 R000 Year ended 28 February 2013 (Audited) R000 CONDENSED SEGMENT REPORT Segment revenue Rail Defence Mining and Industrial 19 085) 7 922) 532) 40 106 2 972 408 57 800) 18 230) 5 229) Total segment revenue 27 539) 43 486 81 259) Segment profit/(loss) before taxation Rail Defence Mining and Industrial 5 603) 3 882) (1 716) 1 049 635 (4 240) 5 853) 8 324) (9 743) 7 769) (11 093) (231) (2 556) (7 603) (479) 4 434) (18 662) (1 112) Total loss before taxation (3 555) (10 638) (15 340) Financial position Assets 51 534) 65 993 63 624) Rail Defence Mining and Industrial Unallocated 21 169) 2 393) 7 850) 20 122) 9 414) 1 528) 15 172) 39 879) 21 280) 10 308) 12 473) 19 563) Total segment profit/(loss) before taxation Corporate unallocated Finance cost
    • NOTES TO THE PROVISIONAL FINANCIAL INFORMATION 1. Intangible assets CRMS R000 Year ended 31 August 2013 (Reviewed) Opening net carrying amount Movement: – other Closing net carry amount Year ended 28 February 2013 (Audited) Opening net carrying amount Movement: – impairment – other Closing net carry amount Other intangible assets R000 Goodwill R000 Total R000 2 107) 15 059) 4 438) 21 604) (291) –) (475) (766) 1 816) 15 059) 3 963) 20 838) 11 485) 22 966) 1 559) 36 010) (8 536) (840) (7 907) –) –) 2 879) (16 443) 2 037) 2 107) 15 059) 4 438) 21 604) 2. Headline (loss)/earnings 6 months ended 31 August 31 August 2013 2012 (Reviewed) (Reviewed) R000 R000 Year ended 28 February 2013 (Audited) R000 Reconciliation of headline (loss)/earnings: Loss attributable to ordinary shareholders Goodwill impairment Development cost impairment Adjusted for (profit)/loss on disposal of plant and equipment Total tax effects of adjustments (2 716) –) –) (9 715) 7 907 –) (12 548) 7 907) 8 536) ( 516) 144) 15 (4) 1) –) Headline (loss)/earnings attributable to ordinary shareholders (3 088) (1 797) 3 895) Headline (loss)/earnings per share (cents) Diluted (loss)/earnings per share (cents) (1.9) (1.9) (1.1) (1.1) 2.4) 2.4)
    • COMMENTARY Introduction During the period under review ending 31 August 2013, Ansys experienced a low revenue generating period which was expected due to a slow-down in projects and a boost in tender activities. Revenue decreased by 37% when compared with the interims of 31 August 2012. However, despite this reduction in revenue, gross profit margins improved by 11% from 34% to 45%. Basic loss per share improved from 6.0 cents in 31 August 2012 to a basic loss per share of 1.6 cents in the 31 August 2013 review period. A significant part of the basic loss for 31 August 2012 was due to goodwill impairment. The current improvement was mainly due to the restructuring process highlighted below which included a cost compression exercise, clean-up of development cost assets in the prior financial year as well as the reduction in finance cost. Included in the 31 August 2013 review period is non-recurring restructuring cost of R1.7 million. Headline losses increased from 1.1 cents in the 31 August 2012 interim review period to 1.9 cents in 31 August 2013 interim review period, mainly due to profit made on the disposal of non-core assets. Restructuring All restructuring initiatives have been concluded successfully during the period under review. Management refined the business model to a more focused approach to research and development, a limited facility for maintenance and repairs works and subcontracting of non-core functions to align costs with the cyclical nature of our industry. This resulted in an improved cost base which in turn has significantly improved Ansys sustainability and competitiveness. The effect of these improvements will realise as revenues begin to rise to the maximum benefit of shareholders and other stakeholders. Prospects The company expects to continue its route to recovery in the second half of the year. Increased spending by Ansys’ major customers has resulted in an increase of bids submitted with a reasonably high probability of success. The order book is currently in excess of R26 million and is expected to continue improving in the last six months of the financial year. Market segments Rail Revenue decreased by 52% from 31 August 2012 to 31 August 2013, mainly due to a decrease in project activities which was anticipated.Revenue generation during the 31 August 2013 period was mostly from maintenance and spares of our installed product base, which provides a growing annuity income base. The railways market has shown improved prospects as we have had major activity in tender submissions during the 31 August 2013 period from our major customers. Revenue from Rail will continue to grow and Ansys expects to create new revenue streams from the Southern African Development Community (SADC) region as the pace to modernise railway networks and locomotives by member states begins to rise. Defence The Defence revenue generation during the 31 August 2013 financial year increased by 167% compared to the 31 August 2012 review period, mainly due to the execution of a significant order received in the last quarter of the 28 February 2013 financial year. Ansys’ defence focus remained opportunistic and strategically positioned to exploit the expected increase in Defence spending, given government’s new impetus to grow the South African Defence industry. However, performance in the second half of the 28 February 2014 financial year will continue on a similar path as the first half of the year. Mining and Industrial The Mining and Industrial business continued to disappoint as its performance is positively correlated to the performance of the mining sector, which has difficulties particularly in the local market. However Ansys is maintaining its current client base and continues to invest in the rope monitoring systems as the mining market is expected to turn.
    • COMMENTARY CONTINUED Financial results Current assets A significant part of the decrease in current assets from 28 February 2013 to 31 August 2013 was due to the decrease in trade and other receivables of R11.9 million, due to a decrease in the invoicing activity and receipt of amounts due for the current review period. Cash flow statement n Cash flows from operating activities increased by R3.4 million from the 28 February 2013 to 31 August 2013 year, due to an improved corporate cost structure. n Cash flows from investing activities for the 31 August 2013 review period of R525 000 (28 February 2013: R5.3 million) mainly resulted from disposal of non-core plant and equipment. n Cash outflows from financing activities for the 31 August 2013 financial year of R2.1 million (28 February 2013: R784 000) was mainly due to the repayment of a shareholder loan. The cash flow position improved by R3.8 million from the 28 February 2013 to 31 August 2013. Current liabilities Provision for onerous lease The Waterkloof building lease expires at the end of February 2014 and consists of monthly rental payments of R160 260. The premises can be sublet when a new suitable premises is found. A provision was raised for the full unavoidable cost, which is the monthly rental for the next six months. Comprehensive income Loss for the year The loss for the 31 August 2013 interim period was a direct result of the reduction in revenue. Gross profit margins improved due to higher margins generated from maintenance and spare work in rail performed and a defence project compared to the prior periods. Operating expenses improved by R1.5 million from 31 August 2012 to 31 August 2013, mainly as a result of the cost compression exercise. Included in the 31 August 2013 review period is R1.7 million once-off restructuring expenses. Acquisition of Tedaka Technologies On 10 May 2013 Ansys made an offer to purchase 100% of the shares and shareholder loans of Tedaka Technologies Proprietary Limited (“Tedaka Technologies”) from Tedaka Investments Proprietary Limited (“the seller”) (“Tedaka Investments”) with an effective date of 1 January 2014. The offer to purchase was accepted by the seller on 21 May 2013, subject to certain conditional and statutory requirements. The transaction is still conditional upon the approval by shareholders. The total purchase price is a maximum of R25 944 million, subject to certain profit warranties, payable by the issue of 129 720 000 Ansys ordinary shares at an issue price of 20 cents per share. The loan claims in Tedaka Technologies by Tedaka Investments, having a value of R7.9 million, will be paid by Tedaka Technologies to Tedaka Investments. Teddy Daka is a beneficiary of TDK Trust that owns 100% of the seller. Going concern The directors have reviewed the group’s budget and cash flow forecast for the year 31 August 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 interim results. 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 period. Changes to the board of directors The following new appointments were made to the board of directors since the previous reporting date: n Nonhlanhla Mjole-Mncube – appointed 5 June 2013 as Chairperson
    • COMMENTARY CONTINUED n n Sizakele Mzimela – appointed 5 June 2013 as non-executive director to the board and as member of the Audit Committee Teddy Daka – appointed 5 June 2013 as CEO Broad Based Black Economic Empowerment (BBBEE) Ansys is a level 5 contributor. Events subsequent to period end The directors are not aware of any significant subsequent events that have occurred between the end of the review period and the date of this report that may materially affect the results of the Group for the period under review or their financial position as at 31 August 2013. Statement of compliance, basis of preparation and review opinion The condensed interim financial results for the period ended 31 August 2013 has been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards 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 and contain the information required by IAS 34: Interim Financial Reporting. The condensed interim 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 2013. Preparer These results were prepared under the supervision of Rachelle Grobbelaar, the Chief financial officer. Appreciation We thank our management and employees for their commitment and unfailing spirit in the face of ongoing challenges. Their efforts make as significant an impact on the group's performance as does their enthusiasm and positivity. We also thank our business partners, suppliers, advisors and our valued clients and shareholders for your continued confidence in the group. By order of the Board 29 November 2013 Teddy Daka Chief Executive Officer Rachelle Grobbelaar Chief Financial Officer CORPORATE INFORMATION Non executive directors: Executive directors: Registration number: Registered address: Postal address: Company secretary: Telephone: Facsimile: Transfer secretaries: Designated Adviser: FF Dantile, MD Keebine, NS Mjoli-Mncube (Chairperson), SP Mzimela T Daka (CEO), R Grobbelaar (CFO) 1987/001222/06 140 Bauhinia Street Centurion Pretoria, 0157 PO Box 95361 Waterkloof Pretoria Fusion Corporate Secretarial Services Proprietary Limited +27 12 648 9600 +27 12 346 3720 Computershare Investor Services Proprietary Limited Exchange Sponsors 2008 Proprietary Limited