16th Jan 2008 07:09
Sinosoft Technology plc16 January 2008 SINOSOFT TECHNOLOGY PLC ("SINOSOFT" OR THE "COMPANY") TRADING UPDATE Sinosoft, the China-based developer and provider of software and IT solutions toChinese regional and national government agencies and export enterprises, todayissues a business and trading update for the 12 months ended 31 December 2007,ahead of the close period preceding the publication of the Company's PreliminaryResults, planned for April 2008. Operating results 2007 has been an important year for the Company as we continued to grow thebusiness beyond our home province of Jiangsu, develop new products, attract newcustomers and progress the roll out of the SAT contract. While revenue continuesto grow in all business segments; the previously announced delay in the SATcontract has meant that revenue growth is less than we had anticipated. Netprofits continue to grow and at 31 December 2007 the Group (being Sinosoft andits subsidiaries) had approximately $18 million of cash on deposit. Significant developments During the period Sinosoft opened its new office in Beijing and this has alreadybeen of significant value to the Company with the winning of a substantialoutsourcing contract with United Wise Development Limited, a textile machinerybusiness based in Hong Kong. This work began in November 2007 and will becompleted within Q1 2008 with revenues recognised in both periods. We arehopeful that this is a stepping stone to increasing our business within HongKong. The roll out of our export tax review software pursuant to our contract with theState Authority of Taxation ('SAT') has been progressing, albeit at a slowerpace than we had hoped. Installation took place in Anhui in the first half of2007 and commenced in Zhejiang from October. Following the completion of producttesting, we have been co-operating with these provinces and making changes toour product to meet their new and in some cases unexpected requirements. TheCompany has faced issues with differing interfaces across the provinces and iscurrently working to resolve these. Once these issues are resolved, Sinosoftwill continue the roll-out to other provinces. An agreement was recently signed between China and the US (the "Agreement")settling the trade disputes between the two countries. The background of theAgreement is that on 2 February 2007, the US government filed a complaint withthe WTO against China's domestic trading subsidies and in particular the use ofincome tax refunds. It is our understanding that China has now agreed toeliminate some of these income tax refunds. However, it is also ourunderstanding that the Agreement only relates to 12 specific industries andrelates to income tax rather than the value added tax refunds which Sinosoft'sexport tax software is focussed on. Whilst we will continue to monitor thesituation, at this stage the Company is confident that the Agreement has nodirect effect on our business. It is anticipated that the Preliminary Results for the year ended 31 December2007 will be published in April 2008, following the completion of the statutoryaudit and a maiden dividend distribution will be declared. -ends- For further information, please contact: Sinosoft Technology plcAlfred Ho, Finance DirectorTel:- +(86) 25 8481 6867 Hanson Westhouse Limited Tavistock CommunicationsTim Metcalfe/Richard Baty Simon Compton/John West020 7601 6100 020 7920 3150 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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