12 June 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Frontier Developments plc
FY24 Trading Update - a strong second half performance
Frontier Developments plc (AIM: FDEV, 'Frontier', the 'Group' or the 'Company'), a leading developer and publisher of videogames based in Cambridge, UK, reports provisional financial results for the financial year ended 31 May 2024 ('FY24') ahead of expectations.
FY24 unaudited financial headlines
· Strong back-catalogue performance in H2 and the successful release of Planet Zoo: Console Edition in March delivered FY24 revenue of approximately £89 million (FY23: £104.6 million).
· During H2, annual operating costs were reduced by approximately 20% through an organisational review, which completed as planned in March.
· Consequently, Frontier was profitable in H2 on an Adjusted EBITDA* basis, even without the gain from the sale of the RollerCoaster Tycoon 3 ('RCT3') publishing rights in March.
· FY24 Adjusted EBITDA* as a whole is also expected to be in profit, with a provisional profit of approximately £0.5 million (FY23: loss of £4.6 million), including the gain from the sale of the RCT3 publishing rights.
· The strong H2 trading performance, cost reductions, sale of the RCT3 publishing rights, and tax cash credits resulted in an increase in cash during H2 of over £12 million, to £29.5 million at 31 May 2024 (30 November 2023: £17.1 million, 31 May 2023: £28.3 million).
*Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation and impairment charges related to game developments and game technology, less investments in game developments and game technology, and excluding restructuring costs, share-based payment charges and other non-cash items.
Outlook
During 2023, Frontier reset its strategy to refocus on creative management simulation ('CMS') games, a genre where it has been most successful and is considered an industry leader. Frontier has previously confirmed three CMS games for release over the next three consecutive financial years: the development of the unannounced own-IP CMS game is on track for release in FY25 and Frontier expects to announce the title in the coming months; the third Jurassic World game confirmed on 9 May 2024 is scheduled for FY26; and a third, unannounced CMS game is planned for FY27.
As well as the unannounced own-IP CMS game coming this financial year, FY25 will also see the launch of Frontier's third F1® Manager game, with F1® Manager 2024 confirmed for release on 23 July 2024 on PC, PlayStation® 5, Xbox Series X|S, PlayStation® 4 and Xbox One.
The Board is comfortable with the current consensus of analyst expectations for FY25 revenue of £87 million, and is confident of being able to achieve profitability in FY25 through a continued focus on driving return on investment and tight cost control.
Jonny Watts, Frontier's CEO, said:
"I am pleased to confirm an improvement in our financial performance for the second half of the financial year. It has enabled us to report an adjusted EBITDA profit for the financial year and an increase in our cash position. I'd like to thank our people for the positive turnaround we have achieved together in the last six months.
We have started the new financial year reset and refocussed, with a clear strategy and sustainable cost base. We have a game portfolio that continues to deliver pleasing results and an exciting CMS-led roadmap ahead. I look forward to the launch of F1® Manager 2024 next month, and to revealing the details of our own-IP CMS game coming later in the financial year".
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019. The person responsible for making this announcement on behalf of the Company is Alex Bevis.
Enquiries:
Frontier Developments +44 (0)1223 394 300
Jonny Watts, CEO
Alex Bevis, CFO
Peel Hunt - Nomad and Corporate Broker +44 (0)20 7418 8900
Neil Patel / Paul Gillam / Kate Bannatyne
Liberum - Joint Corporate Broker +44 (0)20 3100 2000
Max Jones / Matt Hogg / Nikhil Varghese
Teneo +44 (0)20 7353 4200
Matt Low / Arthur Rogers
About Frontier Developments plc
Frontier is a leading independent developer and publisher of videogames founded in 1994 by David Braben, co-author of the iconic Elite game. Frontier uses its proprietary COBRA game development technology to create innovative genre-leading games, primarily for personal computers and videogame consoles.
Frontier's LEI number: 213800B9LGPWUAZ9GX18.
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