Signalling a go
AFTER REPORTING A headline loss in its interims to August 2008, technology signalling company Ansys in on track for a positive outcome in the full year to February. Ansys specialises in the design and integration of monitoring and control systems for the rail transport and defence sectors. Its major client by far is Transnet Freight Rail.
Ansys gave the reason for the loss as delays in the adjudication of some of its major tenders by up to 18 months. The R6,6m loss equates to a headline loss/ share of 4,73c against a 6,26c/share profit previously.
The good news is that orders received for the year to February 2009 already exceed revenue for the full 2008 financial year at R150m (2008: R121m). The company had originally forecast a R138m revenue. Among those are contracts to export Ansys’ locomotive tracking and optical technology to some of the mining and railway companies in Turkey and China and, of course, to Transnet.
In addition to those, Ansys is currently involved in negotiations to buy 100% of AR Process Projects, a 30-year-old company that will enable Ansys to expand into the energy and chemical related industrial sectors through its engineering solutions. That will further reduce the company’s dependence on Transnet and Denel (via Optocon Systems) by around 90% of its contracts.
Gauteng Premier (then finance MEC) Paul Mashatile told Finweek back in 2006 that the provincial government was planning to invest in the upgrade of signalling technology for passenger train service Metrorail, which hadn’t seen any major investments in 30 years. Nothing major has since materialised. Last week’s two train crashes in different parts of Gauteng – in one day – were attributed to signalling problems. That surely signals more urgent business for Ansys?
At its current price of 36c/share, Ansys is rather expensive at 13,14 times its price:earnings. Ansys is on track to deliver positive earnings, in the region of 15c/share.