Ansys revenue declined by 29% to ZAR572.6 million with profit for the year totalling ZAR33.4 million.
The decline in financial performance can be attributed mainly to budget revisions by key customers in response to adverse macro-economic factors. The impact of the exceptional exchange gain in 2017 (ZAR17.4 million) as opposed to ZAR7.8 million in the current period also contributed to reduced profitability. Gross profit margin improved to 28.3% on the back of improved product mix and the implementation of various efficiency initiatives, and despite a product defect provision or ZAR4.6 million in one of the group’s rail products.
While declining to ZAR60.7 million in 2018, EBIDTA continues to reflect the encouragingly positive CAGR of 46% over the past three years.
Operational expenses which came in at ZAR125.8 million, were 3.5% lower than they were in the previous year, even though this figure includes expenses of ZAR8.2 million related to strategic investments.
These investments were made to create new group capability to support the growth strategy.
Headline earnings per share (HEPS) halved by 50% to 7.29 cents compared to 14.72 cents per share in the previous period. HEPS continued to show a positive CAGR, trending over 3 years of 18%.
The tangible net asset value per share increased by 22% from 32.6 cents to 39.9 cents per share.
During the period under review, the group continued to invest and leverage off its core competencies in innovation and design to support its growth strategy. Further investments were made in strengthening the leadership capacity of the group.
These investments impacted on profits and cash resources in the short-term but are essential to the objective of creating a more sustainable business that can exploit additional market segments in the medium to long term.
The group also changed its organisational structure during the period, establishing three new business units to house the new solutions offerings.
This enabled it to become more outcome-focused, and to foster better collaboration by introducing group-level shared services and centralising some functions including finance and human resources.
Critical to this process, was for the organisation to become more client focused, with an enhanced ability to respond to customer needs and to have insightful narratives with both existing and potential customers.
To this effect the group insourced the marketing and communication function to facilitate customer care, the organisation’s rebranding initiative and to champion the creation of a single core identity for the group, as well as to streamline the group’s marketing efforts.
The immediate outlook for the South African economy remains cautious, although medium-term prospects have improved since late 2017. This is primarily due to notably less concern about domestic politics and the policy environment, as well as to the recent confirmation of the country’s investment grade rating by Moody’s.
The gross domestic product (GDP) is expected to grow by 1.4% and 1.7% in 2019, this will depend largely on political stability, improved investor and business sentiment, and a less volatile exchange rate.
At group level, Ansys, recently rebranded as Etion, continues to implement the growth strategy it introduced in 2012, which was then focused on creating long-term sustainability and improving competitiveness, and has now evolved to building a digital business.
The group has restructured accordingly, with its new positioning as a diversified digital technology group.