Fronde returns to profit on pretax basis
Fronde Systems Group, which provides IT services to businesses, returned to profit on a pretax basis after overhauling the business to cut costs in the face of falling revenue.
The Wellington-based company reported a pretax profit of $1.4 million in the 12 months ended March 31, turning around a pretax loss of $3.4 million a year earlier, it said in a statement. Revenue fell 3.6% to $57.4 million as the IT company changed its mix of services to chase profitability, which it said helped lift sales in Australia by 19 percent. It didn't provide details.
"Fronde has turned its financial performance around following a challenging period," chief executive Anthony Belsham said. "Our continued focus on aligning costs with revenue is now yielding results."
The company experienced a slowdown in Wellington sales in the 2015 financial year, pushing it into the red and triggering a restructure where jobs were cut and Fronde's Christchurch office closed. Former Fisher & Paykel Appliances executive Mr Belsham was hired as the new CEO in December, replacing Ian Clarke and following the departure of former chairman Wayne Norrie.
Fronde intends to retain the earnings from the 2016 financial year and will release its annual report in early July.
Chairman Jon Mayson said the company is focused on lifting profitability and growing revenue in New Zealand and Australia.
The company's shares are listed on the Unlisted platform and last traded at $1 in January 2015, valuing Fronde at $7.1 million.
Fronde had wanted to grow to $200 million annual revenue company by 2017 after generating rapid sales growth over three years before the Wellington slowdown hit trading.