Cloud advisory and IT services provider, Fronde, has posted $1.09 million in profit before tax for the first half of the 2018 financial year, representing a 48 per cent year-on-year increase for the period.
Compared to the same period last year, the company saw a positive growth in the profit before tax. In the first half of 2017, the company posted $736,000, a slight reduction of $42,000 compared to the same period the prior year.
However, Fronde revealed that overall revenue was “in line” with last year.
Fronde said its revenue mix continues to improve, as the business focuses on growing profitable areas and reducing and eliminating areas with low profitability.
“As highlighted in the past few years, revenue and profitability from traditional areas of our business have been under pressure,” Fronde chair, David Bartlett, said.
“Pleasingly we have seen the growth in recurring revenues from licenses and premium consulting services fully compensate for the reduction in revenues from building customised bespoke software.”
The company has been able to increase investment in developing and managing intellectual property to build a differentiated market position, and also to continue growth in Australia.
“As part of our ongoing focus on improving profitability and building our platform for future growth, we are accelerating our investment in the development of intellectual property and sales and marketing capability,” Barlett said.
“We are also leveraging areas of excellence, creating efficiency and improving delivery effectiveness by managing our business as one unit, rather than our previous country specific approach.”
“As previously signaled, we expect the pressure of current market dynamics to continue, particularly in the traditional custom software development areas of our business,” Fronde CEO, Anthony Belsham, said.
“However, our investment in building a differentiated position in both New Zealand and Australia is gaining traction, particularly as we pivot towards more high value consultancy services that sets businesses up for success. We now have an exciting and strong base to build on over the next few years.”
Fronde said it will continue to focus on continuing to build and refine its “differentiated” market position through unique intellectual property, and leveraging this in both the Australian and New Zealand markets.
It will also invest in sales and marketing capacity and capability and in optimising service capacity to match demand, and optimising internal indirect costs.