Alt X-listed specialised defence and railway electronics company Ansys is to post a loss next month for the six months to 31 August, citing delays with the start of various projects as the cause of the profits reverse.
Ansys in a Stock Exchange News service announcement required by Alt X rules, yesterday said it expects a rebound in the second half of its current financial year that ends in February.
“The delays were caused by 6-18 month delays in the issue and adjudication of major tenders by key customers,” the SENS statement notes.
Company CEO Allan Holloway this morning declined to identify the companies concerned, saying he did not wish to embarrass them. He did say, however, that the contracts affected were in the transport – not defence side of the business.
“Shareholders are advised that Ansys is currently finalising its results for the six month period ended 31 August 2008 and in light of the above the company will incur a loss for the period. The loss and headline loss per share are expected to be between 4.50 and 5.50 cents per share (31 August 2007: earnings and
headline earnings per share of 6.25 and 6.26 cents).”
The company added all the newly acquired subsidiaries “are performing well and will deliver their target results for the year ending 28 February 2009. To date, contracts with an executable value of more than R150 million for the year to 28 February 2009 have been received, which will ensure that the Ansys Group will exceed its forecast turnover of R138 million for the year to 28 February 2009.
“While the company expects a significant improvement in performance for the second half of the year, as projects received generate revenue, the un-recovered cost incurred during the first half of the year will impact on the earnings for the full year ending 28 February 2009. The results for the six months ended 31 August 2008 are expected to be published on SENS by early November 2008.
”Contracts secured for the year to 28 February 2009, include projects such as the Transnet Wayside Reader expansion, locomotive communication systems and optical exports to China and Turkey.
Holloway says the Chinese deal involves the provision of thermal imagers to an undisclosed customer. He adds that this deal and the Turkish contract will help the company post an expected year-end profit. “Unfortunately, the weakening rand will also help us as our contracts are priced in dollars and euro.”
Ansys subsidiary Optocon Systems won the R20 million contract from Ankara-based defence company Aselsan in April. The optical equipment is derived from that developed for the SA Rooivalk attack helicopter project and will be fitted to the country`s new fleet of Agusta AW129 Mangusta attack helicopters. Ironically the Turks preferred the Mangusta over the Rooivalk.
The initial order was for the development and production of eight main sight systems. Ansys at the time said there was a potential requirement for an additional 80 sights.
Ansys bought Optocon for R14.5 million in January. Optocon is noted for its capability in the manufacture of precision electro-optical systems ranging from infra-red optical components to high performance TV sensors as well as video switching units and displays.
At the time of the Optocon transaction Holloway noted that there was “huge opportunity” for Optocon in the international defence industry market. Optocon`s customers currently include armaments manufacturers Denel, Norinco, SAAB and diamond miner De Beers.