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29 Oct 2012 13:00
GEONG International Limited ("Geong" or the "Company") Trading Update
GEONG International Limited (AIM: GNG), a leading internet software solutions provider and operator for large enterprises in China is pleased to provide the following update on its current trading.
Since the announcement of the 2012 full year results economic conditions have remained stagnant due to the uncertainty in European markets and a general slow down in investment activities in China. As a consequence, the Company expects to report revenues for the six months ended 30 September 2012 slightly below the corresponding period of last year. However, margins have remained broadly in line with last year.
The Company has continued to gain new contracts, winning four new customers in the IaaS division and generating two new contracts in the SaaS division since the beginning of the year. This takes the number of SaaS clients to 20 and increases the level of regular revenue. The value of the new business won during the period is in the order of £1.1 million, part of which will contribute to earnings in the second half of the year.
The Company has continued to execute its strategy of (1) working closely with its existing customers to maximise the revenue opportunities,(2) driving more SaaS business in order to achieve a higher average margin and improve cash flow and (3) exploring new growth areas in social business and mobile internet. In the last few months, the Company has entered into discussions with a number of major computer companies to strengthen the co-operation platform and we anticipate further such opportunities in the coming months.
During the period the Company has continued to invest in R&D on its Smart Internet Platform and has been developing a new Enterprises' Social Business Platform, which will be launched in the middle of November, leveraging the flexibility of cloud computing technologies. It has also taken steps to expand the customer and geographical base of the Company, using our partnerships with IBM and Oracle to extend our location coverage across Great China and Southeast Asia and we now have representation in Dalian, Wuhan, Shenzhen, Macau and HK in Great China as well as in Vietnam, Indonesia and Malaysia.
A key objective of the Company has been to improve its working capital position through the quicker collection of receivables and the Board expect to see the benefit of the improvements that have been implemented during the Company's main cash collection period of October to December. Cash on hand at the end of September was £4.0 million. The order book at 30 September 2012 stood at £11.5 million, of which £1.5 million is in the SaaS business and £4.6 million is due for delivery in the second half of the year, which is in line with the Board's expectations.
As a result of the initiatives set out above and the Company's sensible cost controls the Board remains confident that the full year 2013 results will be in line with those of 2012 and that the growing customer base will provide the impetus for steady and sustainable growth thereafter.
For further information, please contact:
GEONG International Limited www.geong.com Tel: +86 10 85869655Henry Tse, ChairmanWeidong Wang, CEODavid Tsui, CFOFinancial Adviser and Joint BrokerEvolution Securities China Ltd Tel: +44 (0)20 3362 8882
Tim WorlledgeNomad and Joint BrokerfinnCap Tel: +44 (0)20 7220 0500Stuart AndrewsBen Thompson
About GEONG International Limited
GEONG is recognised as a leading independent Internet software solutions provider and operator for large enterprises in China.
Registered in Jersey, the Company's operations are headquartered in Beijing, China. GEONG International Ltd. (GEONG or the Company) has been quoted on the London Stock Exchange since June 2006. The Company has since transformed from an ECM (Enterprise Content Management) software and service centric business to an internet business centric company.
GEONG is an internet solutions and service software company managed by a world class management and professional team who collectively own 26% of the business. The Company's mission is to help its clients to improve their business efficiency and customer satisfaction through smarter internet applications.
For more information, please visit www.geong.com
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