LONDON (Alliance News) - GEONG International Ltd Friday said its group pretax profit halved in its last financial year, as revenue declined and selling and administrative costs rose.
The China-based internet software company posted a pretax profit of GBP47,000 for the year to end-March, down from GBP99,000 in the previous year, as revenue declined to GBP9.5 million from GBP9.6 million.
Still, the company said trading had stabilised in the second half of the year after a weak first half. Its gross margin improved to 50% from 44%, as the company in the first half increased its number of generating software-as-a-service clients, which have better margins than infrastructure-as-a-service clients.
The company said that it added seven new clients in the finance sector during the year. It is currently trading with more than 120 clients in the finance, automotive and manufacturing sector. GEONG has shifted its focus towards building its SaaS business, and is being more selective in taking on new projects.
Its revenue figure of GBP9.5 million was well above the GBP8.0 million it had previously forecast for the year, which it attributed to recognizing further revenue as more certain progress estimates were received on certain projects. Its pretax profit was in line with its previous estimate, as it made a provision against certain receivables, offsetting the revenue rise.
It plans to continue investing in the development of new mobile internet and big data products to capture further clients.
"The overall foundation of the company has been improved significantly and we believe this will provide solid and stable platform for growth in years to come," Chief Executive Officer Weidong Wang said in a statement.
Its order book stood at GBP10.2 million at the end of the year, up from GBP9.5 million a year earlier.
Shares in GEONG were trading down 4.4% at 4.30 pence Friday afternoon.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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