GEONG International Limited (AIM:GNG), a leading Internet software solutions provider and operator for large enterprises in China, provides shareholders with clarification regarding the amount of accrued income included within amounts due from customers as shown in the interim results for the six months ended 30 September 2011 and announced on 20 December 2011.

As at 30 September 2011, amounts due from customers were GBP8.5m, comprising GBP5.3m of invoiced trade receivables and GBP13.2m of accrued income, up from respectively GBP4.8m and GBP11.4m at 31 March 2011.

Our top 10 customers accounted for GBP4.4m, approximately 80%, of the trade receivables of GBP5.3m as at 30 September 2011 and, of this amount, GBP2.4m was due from a major customer on agreed deferred payment terms and is due to be paid in full by the end of September 2012. 

In the 3 months to 31 December 2011 we have collected GBP2.2m of the trade receivables, approximately 76% of the balance outstanding as at 30 September 2011, excluding the GBP2.4m which is subject to deferred payment terms. We expect the remainder of GBP0.7m to be collected in the current quarter ending 31 March 2012.

Similarly, our top 10 customers accounted for approximately GBP10.8m, or 80%, of the accrued income of GBP13.2m as at 30 September 2011. In the period from 31 March 2011 to 30 September 2011, accrued income increased by GBP4.0m as a result of services provided which have not yet been invoiced and reduced by GBP2.2m as a result of previously accrued income which has now been invoiced. Furthermore, GBP1.8m of this newly invoiced amount has already been collected with the remaining GBP0.4m due to be collected in the current quarter ending 31 March 2012. The disproportionate net increase in accrued income, when compared with the revenue generated from IaaS business, has arisen largely as a result of one large and long term contract, accounting for some GBP1.8m, which will not be invoiced until late this year. We expect to have invoiced substantially all of the current accrued income balance by 31 December 2012 reflecting when the majority of the milestones on current contracts will have been achieved.

The debtor days are currently skewed by the deferred payment terms on GBP2.4m, 40% of our current trade receivables, referred to above and the Board remains confident that the debtor days will begin to stabilise when we have received the GBP2.4m in full and as the proportion of SaaS sales increases beyond the current 24% of sales. In the meantime, we will continue to work with our customers to improve our cash flows and working capital position.

The Company expects to announce a trading update for the nine months ended 31 December 2011 in mid February 2012.

For further information, please contact:


GEONG International Limited          www.geong.com          Tel: +86 10 5222 0999
Henry Tse, Chairman  
Weidong Wang, CEO
Amit Thakar, CFO


Evolution Securities Limited                                 Tel: +44 20 7071 4300
(Nominated Adviser and Joint Broker)  
Tim Worlledge  
Esther Lee  

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 (LSE AIM: GNG.L) 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 and both revenues and profits have almost trebled over the last six years.

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