Ansys posts profit

Johannesburg, 14 May 2008

AltX-listed defence and rail IT company Ansys has posted year-end results that show profit to the end of February is up 50% on the previous year.

The company this morning reported an after-tax profit of R18 million, compared with R12 million at the end of the 2007 financial year.

Revenue also increased 54.5%, from R79 million to R122 million, and profit before tax rose 52%, from R17 million to R26 million. Headline earnings per share were up 25.6%, to 13.71c. Based on the good results, a dividend of 4c per share has been declared.

Ansys has contracts to supply sophisticated electronic equipment to Transnet and Metrorail. It also secured contracts from local and foreign defence manufacturers and in the air transportation industry. It is projecting to significantly increase its turnover in the current financial year, says CE Alan Holloway.

He adds that the company`s strategic focus on high-value rail infrastructure projects - currently its biggest revenue generator - has largely driven the increase in turnover.

Holloway says the 2008 financial year saw the company make significant progress in the execution and delivery of a number of trackside measurement projects for Transnet, as well as submitting its first significant rail signalling quotation to Metrorail.

"Real fixed investment projects started in 2007, with the building of soccer stadiums, expansion projects at the major airports and the first phases of the Transnet and Eskom capital expenditure programmes, at an estimated combined cost of R145 billion," Holloway says.

"Transnet`s announcement regarding the upgrading of the country`s rail network has already resulted in the procurement of hardware and the implementation of train condition monitoring systems. Transnet is projecting the total amount of freight it carries to grow from 85 million tons a year to 146 million tons by 2011.

"This will result in Transnet`s market share of freight moved growing from 10% to about 22%. This growth in market share will be derived from six or seven long-distance, heavy-haul corridors that will be established in SA over the next five years."

Although Ansys completed four acquisitions last year - buying Emerging Signals, Optocon Systems, Quadsoft and Airport interface Technologies for around R50 million in cash and shares - Holloway says the company remains on the acquisition trail. "We have a cash pile of R20.6 million and a demand for our shares, which we are ready to deploy on the right acquisitions which fit our business and, we hope, will help lift it to a whole new level."