Story image

Fronde back in black, despite flat revenue

14 Dec 2015

Fronde is celebrating being back in the black with its interim financial results for the six months ending 30 September.

The cloud computing and IT services company says it recorded profit before tax of $1.2 million, up from a loss of $1.1 million for the same period a year ago.

That improved result came despite flat revenue of $31.6 million with New Zealand revenue contracting. Fronde Australia, which is concentrating on its Google and NetSuite practice areas, grew by 7% for the period, helping offset the Kiwi loss.

The company won NetSuite's Asia Pacific Partner of the Year for 2015.

Jon Mayson, Fronde chairman, says while the action taken by the company to improve its financial performance has paid off, Fronde expects ‘a more challenging second half’.

“Fronde has turned its financial performance around during a period fo challenging trading conditions, improving profit before tax by $2,336,000 compared to the same period last year,” Mayson says.

He says the improved profit before tax was achieved through strong cost control, better matching of capacity to workflow and a 12% improvement in operating margins.

The company made savings in expenditure of $1.5 million during the six months and Mayson says changes have been made internally in terms of staffing and business focus to be able to more effectively meet the changing needs of the market and customers who are increasingly looking for cloud and digital solutions.

Emma Watson, Fronde chief financial officer, says consistency of operating margins is improving as Fronde earns a greater proportion of recurring revenue, with the business positioned to deliver a net profit for the full year.

“In New Zealand many of the company’s business units are performing strongly,” Watson says.

“Fronde is working on increasing recurring revenue in the large and mid-tier enterprise markets, as changing Government procurement practices and investment priorities have impacted the number and profitability of opportunities for custom software development,” she adds.

Watson says the business is looking for growth opportunities in the Auckland and Wellington enterprise markets and has been successful in winning platform development work for large established clients, with a strong pipeline for Salesforce, Google and Amazon sales and implementations.

Last week Anthony Belsham took over as Fronde chief executive, with Ian Clarke departing.

Apple launches revamped iPad Air & iPad mini
Apple loves tinkering with its existing product lines and coming up with new ways to make things more powerful – and both the iPad Air and iPad mini seem to be no exception.
IntegrationWorks continues expansion with new Brisbane office
The company’s new office space at the Riverside Centre overlooks the Brisbane River and Storey Bridge.
DXC subsidiary takes SAP energy industry partner award
Winners of the awards were selected from SAP’s A/NZpartner ecosystem and announced at the recent SAP A/NZ Partner Kick-Off Meeting held in Sydney.
Global server market maintains healthy growth in Q4 2018
New data from Gartner reveals that while there was growth in the market as a whole, some of the big vendors actually declined.
Emerging tech helps savvy SMB’s succeed
A CompTIA report shows SMBs are taking on the challenge of emerging technologies to reach their business goals.
Workflows should benefit people, not devices
It is important that, in digital transformation journeys, managers remember technology should complement, rather than overtake, employee talent and skillsets.
ForgeRock launches Sandbox-as-a-Service to facilitate compliance
The cloud-based testing environment for APIs enables banks to accelerate compliance with Open Banking and PSD2 deadlines.
Huawei picks up accolades for software-defined camera ecosystem
"The company's software defined capabilities enable it to future-proof its camera ecosystem and greatly lower the total cost of ownership (TCO), as its single camera system is applicable to a variety of application use cases."