Fronde mulls capital raising for Aust push; FY profit climbs

Article – Businesswire

May 23 (BusinessDesk) – Fronde Systems Group, a Wellington-based software and cloud-based services developer, is considering an equity raising to fund a bigger push into Australia after more than doubling annual profit.

Fronde mulls capital raising for Australian push as FY profit more than doubles

May 23 (BusinessDesk) – Fronde Systems Group, a Wellington-based software and cloud-based services developer, is considering an equity raising to fund a bigger push into Australia after more than doubling annual profit.

Earnings jumped to $2.7 million in the year ended March 31 from $1.1 million a year earlier, the company said in a statement on the Unlisted platform. Sales climbed 26 percent to $59.9 million.

Fronde has kept its shares available for trading on Unlisted since 2006 though it seldom trades on market, with the last recorded transaction being in January 2008 at 50 cents a share. At that price the company would have a market value of about $4 million though Fronde has grown since then, with revenue having expanded almost 90 percent from the 2008 year.

“We’re arguably short of capital for the journey we want to undertake,” chief executive Ian Clarke told BusinessDesk. A decision on capital raising would be made this calendar year and one option would be to bring in an Australian investor who could help drive growth across the Tasman.

Funds would be used to ramp up marketing, building the Fronde brand and increasing sales capability, he said. The company would also need to hire more IT workers.

At the start of this month, Fronde acquired Australia-based OnlineOne, a cloud design and integration business specialising in NetSuite Enterprise Resource Planning (ERP) solutions. No price was disclosed.

Based on the company’s first-half figures, its Wellington head office generated about 78 percent of revenue, Auckland accounted for 9 percent and Australia for 15 percent.

“We have a lot of growing to do in Auckland and the South Island,” Clarke said. “The cloud integration story is very popular for enterprise and the mid-market, as opposed to government which has constraints on using the public cloud.”

Growth is already underway in Australia and the company is in the first year of a new five-year plan, he said.

Fronde will pay a fully-imputed dividend of 4 cents a share.

(BusinessDesk)

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