23 Nov 2011 08:35
GEONG International Limited ("Geong" or the "Company") Termination of agreement to purchase Adbeyond (Group) Limited and Trading update
GEONG International Limited (AIM:GNG), a leading Internet software solutions provider and operator for large enterprises in China, announced on 19 July 2011 that it had entered into an agreement ( the "Acquisition Agreement") for the acquisition of Adbeyond (Group) Limited ("Adbeyond") .
Both parties have, for the last four months, been working towards completion of the acquisition but have now agreed, in the light of the continuing instability in the financial markets, that it would not be in the best interests of either party to conclude the acquisition. The Board is in discussion with the vendors of Adbeyond concerning the terms of the termination and a further announcement will be made shortly.
In consequence of the termination of the Acquisition Agreement, there will be no need for the US$8 million convertible secured loan stock previously being contemplated and there will therefore be no such issue by the Company.
Notwithstanding that it has decided not to proceed with the acquisition of Adbeyond, the Board continues to believe in its strategy of seeking acquisitions in Greater China that will both enhance its presence there and increase the range of services that it can offer to its clients. It will therefore continue to seek suitable targets which will support its organic growth strategy, remaining aware however that the funding of such a strategy will remain difficult whilst the equity and financial markets remain as they are. However the Board is continuing to seek other more viable funding options and remains confident that it will be able to secure appropriate funding for the right deal.
The Directors are pleased to report that although the first half of the year remains the weaker trading period for the Group, trading in the half year just completed has been better than in the same period last year. SaaS business continues to grow as a proportion of total revenue, thereby helping to maintain strong margins. The Company expects its net investment in working capital to reduce in the current financial year, reflecting the increasing proportion of shorter term contracts. The Directors are also pleased to report that despite the tough economic conditions the Company has increased its current order book to £15.6 million. The Board therefore remains confident that the outturn for the full year will be in line with previously held expectations.
The Company expects to announce the interim results for the six months ended 30 September 2011 on 20 December 2011.
For further information, please contact:
GEONG International Limited www.geong.com Tel: +86 10 5222 0999Henry Tse, ChairmanWeidong Wang, CEOAmit Thakar, CFOEvolution Securities Limited Tel: +44 20 7071 4300
(Nominated Adviser and Joint Broker)
Tim Worlledge Esther Lee
Tim Redfern (Corporate broking)
About GEONG International Limited
Operational since 2000, Geong specialises in collaboration and content management software and services. Its products are specifically tailored for the Chinese market, where the Company is recognised by Government agencies and numerous blue chip clients as a leader in its field. Geong was named The Most Successful Enterprise in ECM Software in China 2007 to 2008 by China's Centre for Information Industry Development and CCID Consulting; and one of the fastest growing companies in Asia at the Deloitte Technology Fast 50 China and Deloitte Technology Fast 500 Asia Pacific awards. The Company has recently expanded into North America with operations in Canada.
Registered in Jersey, the Company's operations are headquartered in Beijing. The Company's shares were admitted to AIM in June 2006 and trade under the ticker GNG.L
For more information, please visit www.geong.com
XLON