despite the SaaS contents supposedly imrpoving cash collection, debtors and accrued income has been increasing at every set of results for the last 2 or 3 years and is now at 18 months turnover.
Accruals increasing is an effect of mix of business ie IaaS where one-third of accrued income is past due more than 365 days and 60% more than 180 days. If (say) contract length is 12 months from start to finish, then quarterly entries are made as key milestones achieved - work has been paid for GNG's end, income accrued but no cash received
given this lack of top line growth, earnings have stalled.
This is end of Year 2 of a 3 year strategic plan - to improve SaaS to 40-50% (with its faster cash collection and higher margins). On track to deliver.
I also dont see how they can grow through acquisition
GNG Mgt seem to have understood they need to stick to the knitting for the next year or so. They foresee no need to issue equity in the near future.
the corporate governance also stinks and shows no sign of improving. The farce surrounding the release of the FY11 results is a case in point - they waited until the last day before they would have breached AIM rules before releasing them! I know this was complicated by the failed acquisition however once that deal was binned they should have released the results the next day.
They realise they should have done more to speed up the publication of results, which as you note was complicated by various factors. Next results promised for last week in June, first week in July ie 3 months earlier.
I know the auditors said that there was nothing apparent going wrong at GNG, but maybe they werent getting access to the level of info which they needed to answer their questions?
Mazars have no China presence and farm out China audits. This is messy and cumbersome. GNG decided to change them for a set of auditors with local presence.
We shall see. Just as a sidenote from me: "farming out" - doesn't that mean that the reputation of Mazars means nothing at all? I've heard of other big firms farming out audits in China. What a terrible idea.
Someone found their Chinese website version: http://www.geong.com/Channel/181885 . Seek and ye shall find, and all that; although why it's tough to find it is an open question. Then there's a further mystery. In the GEONG SmartBox Saas Login, it says "Please select your region". "China" is the default selection, but there's HongKong and Canada, too. I can click the "Go" button, but nothing happens. Wanna know what I think? I think their software doesn't work for shit. That's why they're not being paid.