- Classifieds business operator Frontier Digital (FDV) spike again today after selling off its 20 per cent stake in Propzy
- Propzy is a Vietnam-based online classifieds business focussing on property sales
- Frontier sold its holding in Propzy for $7 million — marking a 300 per cent return on its $1.8 million investment from 2017
- The company dumped the Propzy shares based on upcoming Propzy dilution
- Frontier shares gained over 10 per cent today to close at a new all-time high of $1.17 each
Classifieds specialist Frontier Digital (FDV) has sold off its 20 per cent stake in Vietnam-based Propzy for $7 million.
Frontier spent US$800,000 (roughly A$1.2 million) to buy its initial stake in Propzy in June 2017, and then spent another US$400,000 (roughly A$600,000) six months later after Propzy smashed some revenue goals.
This means by selling the shares for $7 million, Frontier has made a 300% profit on its Propzy investment.
Frontier told shareholders it dumped the Propzy shares because of upcoming dilution which was likely to reduce Frontier’s holding to less than 10 per cent. Further, Frontier said it prefers to focus on operating companies with a “clear path to profitability”.
Frontier Founder and CEO Shaun Di Gregorio said at a portfolio level, Propzy represented more than 50 per cent of the earnings before interest, tax, depreciation and amortisation (EBITDA) loss in Frontier’s latest financial results from the end of January.
“Despite Propzy’s strong revenue growth, we believe the sale of our shareholding represented an attractive opportunity to fast-track FDV’s pathway to achieving portfolio-wide profitability in 2020,” Shaun said.
“Consistent with FDV’s stated strategy, we continue to assess a range of opportunities to optimise our portfolio mix and increase shareholder value,” he said.
He added that the Propzy sale is the first material monetisation even in company history
January’s annual report showed some strong figures for Frontier, with revenue up 75 per cent to $72.5 million.
Propzy is an online classified platform focussing on property sales. Other businesses in which Frontier holds a stake include MeQasa, AngoCasa, and Hoppler in property classifieds, and AngoCarro, PakWheels, and Autodeal in car sales.
Frontier shares gained 10.38 per cent today, and are now up 24.47 per cent since the release of the company’s annual report last week. Frontier shares closed at an all-time-high $1.17 each. The company has a $300 million market cap.