GEONG declines after cautioning on annual income

AIM-listed GEONG International, an internet solutions software provider declined after saying income was lower than last year's. The Chinese company said that although its trading performance for the year ended March 31st was in line with expectations in constant currency, the appreciation of sterling means revenues were actually around £8.0m, delivering a "very small" profit before tax. "Both the increase of the software as a service (SaaS) revenue and the appreciation of sterling have affected the company's year end trade receivables balance, which is expected to be lower than that of the previous year," a statement from the group read. "The board continues to prioritise the reduction in accrued income."During the second half of the year, GEONG won CITIC Bank and Cinda Group as clients, taking the number of SaaS clients to 28 at the year end. The new client wins are expected to generate revenues in the region of £0.3m during the 12 months to March 31st 2015.The cash balance at March 31st 2014 was £3.6m (net cash £2.0m)."The company is currently making the necessary arrangements to enable it to have sufficient resources capable of being transferred out of China. Market conditions remain challenging, but the board remains confident of GEONG's business model and it's potential," it added. The share price dropped 4% to 3.60p by 13:16. NR