Shares in Geong International Ltd have lost one-third of their value following a trading statement revealing disappointing fourth quarter revenues.
Enterprise content management software provider Geong normally has a strong fourth quarter thanks to performance fees but the faltering Chinese economy meant that these were much lower in the year to March 2012. There was also a large shortfall on the expected revenues from IaaS contracts generated by a partner.
Revenues will be much lower than the £11.3m reported in the year to March 2011. The aborted acquisition of Adbeyond will lead to a charge of £350,000. Because performance fees are higher margin, pre-tax profit will be significantly below the £2.6m reported in 2010-11. There was £5.3m in the bank at the end of March 2012.
Geong is negotiating with five potential new SaaS customers.
At 10.88p a share, down 5.38p, Geong is valued at £4.11m.
The full year figures will be published in July.
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