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Fronde announces full year result

2 July 2010

Fronde Systems Group has today announced an operating profit before tax and impairment of $168k for the 12 months ending March 2010. 

Fronde Systems Group has today announced an operating profit before tax and impairment of $168k for the 12 months ending March 2010.  "This has been a particularly challenging year for business.  Global economic conditions negatively impacted revenue performance by extending sales cycles, particularly in the second half of 2009, as well as substantially increasing provisions for doubtful debts" said Wayne Norrie, Chairman.  

Mr Norrie went on to say "Against a backdrop of uncertain economic times, the business has undergone some significant re-shaping to put Fronde in a better position to deliver its financial goals in the future. Highlights are raising capital in the form of a management buy-in to improve working capital, building an annuity revenue stream with Google's Enterprise solutions in NZ and Australia and winning significant new recurring business".

"Our core business, delivering large scale software applications and integration projects, has had a huge lift in the first quarter of this financial year and we are securing an increasing number of cloud engagements as an extension to our core business."

As part of the re-shaping, the Fronde Board has made the decision to fully impair assets of its subsidiary, Fronde Anywhere, as it had not produced the cash flows adequate to support the book value of the asset.  The impairment value of $1,987k is a conservative assessment and reflects that the asset is viable as opposed to a write off which would imply no viability in the asset.  The financial result, after impairment, was a loss for the year of $1,784k.

Click here for the annual report