Get on track
ANSYS LIMITED A WEEK AFTER ANNOUNCING impressive financial results for the year to February 2008, engineering technology and signalling company Ansys said it had clinched contracts valued at R64m to supply tracking and communications technology to State rail utility Transnet Freight Rail. Ansys grew turnover 54,6% to R122m and net profit increased 50% to R18m.
Ansys specialises in the design, development, manufacture, integration and support of advanced technology systems and products for the defence, aerospace, manufacturing and transport industries. It has a R48m contract for 200 wagon identification and measurement units to be placed on all of Transnet’s railway tracks throughout South Africa. There are another 1 400 units for which contracts have yet to be signed and Ansys is still negotiating to supply train cab systems (TCS, voice and data devices on trains) to the Richards Bay line.
Led by CE Allan Holloway, Ansys’ largest shareholder is non-executive chairman Teddy Daka with 27%. The company has a large institutional shareholder base accounting for another 20% of its shares.
Although still heavily reliant on Transnet’s infrastructure investment programme, Ansys has been trying – with considerable success – to wean itself off its heavy reliance on the public corporation. Three acquisitions helped reduce rail’s contribution to group turnover from 85% to the current 67% in the reporting period to February.
Holloway expects that reliance to decline further on the back of Ansys’ defence and communications businesses. In the current financial year Optocon, its defence optronics business, has won contracts worth more than R35m from Japan, Turkey and China.
As Transnet’s infrastructure investment and the restructuring of Denel (another major client) have only recently been sufficiently demonstrable it’s not unreasonable for investors to expect earnings growth of at least 30% in the year to February 2009.