Fronde chairman Jon Mayson described a NZ$3.35 million before tax loss just reported by the Wellington-based company as "extremely disappointing".
Despite doubling sales in Australia and improving by 61 percent in Auckland, sales in Fronde's core Wellington market fell to 76 percent of the number achieved in 2014. Overall revenue for the year to 31 March 2015 was NZ$59.5 million, down NZ$3.1 million year-on-year.
Adjusting for reduced tax and the foreign currency gains, the overall loss was NZ$2.59 million. Total equity fell from NZ$5.14 million to NZ$2.54 million.
Chief executive Ian Clarke said redundancies in November resulted in improved operational performance by February. Fronde's leadership team was also restructured in February with nine roles disestablished.
"Management has a significant amount of work to do to realise the full potential of the assets we created last year," Clarke said.
"Fronde Cloud Workspace continues to provide exceptional promise, though sales cycles are long to secure the large enterprises that are attracted to this end-user computing solution."
At the end of March, Fronde had a large, listed Australian company progressing through a pilot and two late stage opportunities in New Zealand and Australia.
"We continue to receive heavy support for this solution from partners Google, AWS and Citrix," Clarke said. "As investment funds become available in the next financial year, work will go into making this solution more attractive for the mid-market."
The 2015 accounts also reveal negotiations with the seller of Australian Netsuite specialist Online One, acquired in April 2013. Fronde wants to make changes to the purchase agreement to issue 533,372 additional Fronde shares under a three-year earn-out, scheduled to end on 31 March 2016.
"The discussions envisage an extension to the earn-out period by one year (ending 31 March 2017) and changes to the milestones and targets for the combined Australian business. As at the date of signing, the group is unable to estimate the potential financial impact of the changes due to the number of possible variables for potential issue of the shares."