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Ansys swings to profit after restructure

Ansys swings to profit after restructure

Photo by Duane Daws

29th May 2015

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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Shares in AltX-listed Ansys surged nearly 9% on Friday after the Centurion-headquartered information technology firm successfully broke out of the red for the first time in two years and delivered triple-digit increases in its financial performance for the 2015 financial year, following extensive losses in the difficult prior year.

Subsequent restructuring, diversification, a strategic acquisition, careful market consideration and a rebalancing of the group’s revenue stream netted Ansys a 282% rise in revenue from R65.8-million in 2014 to R251-million in the year ended February 28.

The Teddy Daka-led group posted headline earnings of R10.9-million for the year under review, compared with a R6.5-million headline loss in the comparative period last year.

This translated to headline earnings a share of 4.44c for 2015, a reversal on the headline loss a share of 3.58c recorded in the prior year, said CFO Rachelle Grobbelaar at a presentation of the group’s financial results in Sandton.

Basic earnings a share reached 4.09c in the year under review, up from the basic loss a share of 3.85c in 2014.

A net profit of R10-million in the 12 months to February 2015 reversed the loss of R7-million in the comparative period, with operating profit jumping into the black at R17.3-million, from a R7.3-million loss last year.

“I am not excited by [these] numbers,” Daka commented, pointing out that the group could do better and still had a lot of work to do.

The group’s performance reflected aggressive growth across the board, boosted by the inclusion of telecommunication company Tedaka for the full financial year for the first time, he pointed out.

In the 2015 financial year, Ansys’s telecommunications unit contributed revenue of R144.9-million, up from a muted R13-million in the prior year, with a profit of R7.1-million, a turnaround on the R2.3-million loss recorded in 2014.

“The sector itself continues to invest heavily in network upgrades and new infrastructure, particularly the deployment of fibre, an area in which Ansys is well positioned to exploit.”

The telecommunications unit now accounted for 58% of the company’s revenue, up from only 20% in 2014.

The imminent acquisition of engineering solutions provider Partec would further bolster the telecommunications division, despite levelling out its revenue contributions to 41% by next year.

The deal would also provide a shot in the arm for Ansys’s defence and mining segments, which had faltered somewhat during the period under review.

Revenue from the company’s defence division decreased from R15-million in 2014 to R9.9-million in 2015, with a reduction in profit to R2.7-million, from a reported R8.2-million in the prior year, owing to a “slow start” in defence spending from major clients.

The mining unit posted an increase in revenue from R543 000 last year to R2.1-million in the year under review, which marginal narrowing of the segment’s operating loss to R4.1-million in 2015, from a loss of R4.3-million in 2014.

The R93.2-million acquisition of Parsec was likely to be approved by shareholders on Monday, Daka said, highlighting the potential the deal would bring to Ansys.

In the year to March, Parsec posted a provisional profit before tax of R10.8-million, an operating profit of R10.5-million and revenue of R151.8-million. The group also boasted a R140-million order book.

Parsec’s mining division contributed R67.7-million in revenue and operating profit of R3.9-million during the year to March, while the defence division generated R65.3-million in revenue and R4.2-million in operating profit.

The telecommunications unit delivered R17.7-million in revenue and R2.7-million in operating profit.

Meanwhile, Ansys posted a “notable improvement” from its rail division, which more than doubled its revenue to R94.1-million and delivered a 214% increase in segment profit to R29.8-million.

“In general, we expect our increased and improved capabilities, the broad spectrum of products and the depth in the four vertical diversified markets to yield better performance [in the next year],” Daka assured shareholders.

The group’s order book was currently valued at R200-million.

Edited by Creamer Media Reporter

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