Fronde taps sweet spot to double profit
Wellington technology company Fronde more than doubled its profit to $2.7 million, while increasing revenues by 26 per cent to $59.9 million in the year to March.
The company has tapped into a sweet spot in the information technology services market, helping businesses switch to cloud-based software and hosting services.
Fronde's shares are traded on the Unlisted over-the-counter market, an alternative to the NZX's junior board. It declared a 4 cent dividend.
Chief executive Ian Clarke said Fronde had "rounded out" its cloud computing offerings by forming partnerships with Amazon and NetSuite, alongside its existing partnerships with Google and Salesforce.
"Fronde is now in an ideal position to provide our clients with on-premise, locally-hosted or public cloud solutions for a wide range of enterprise requirements," he said.
Fronde, which employs 330 staff, advised shareholders not to sell their shares in April after directors agreed to a request to provide confidential information about the firm to an unnamed party.
The company downplayed suggestions of a takeover bid at the time but said the information request might result in "a potential transaction" which could affect the value of its shares.
A possible explanation may have been that an existing shareholder wanted to increase their stake in the firm.
Clarke said that now Fronde had released its annual result, all shareholders had the same information and the "don't sell recommendation" no longer applied.
"At the time, because we knew we had a good result coming that was quite out of context with previous results, we wanted to make sure shareholders knew another party had better information than they did."
He was unable to say whether the potential transaction that sparked the original information request might still go ahead.