- Full-year sales forecast confirmed
- Sale of RollerCoaster rights for $7m
- Trading in line and improved cash position
Shares in beleaguered fantasy video game maker Frontier Developments (FDEV:AIM) jumped 14% to 159.4p after the firm reaffirmed its full-year revenue guidance and reported an ‘improving’ cash position.
The relief rally comes after the company cut its revenue target last November sending the shares to a new 10-year low of 119p. Full-year revenue to the end of May was reset to a range of £80 million to £95 million.
Reassuringly, the Cambridge-based company said trading had been in line with expectations since the half-year results on 17 January with the biggest contributions coming from Frontier’s CMS (creative management simulation) games, led by Jurassic World Evolution 2 and Planet Zoo.
Planet Zoo was successfully released on the Xbox Series X/S and PlayStation 5 on 26 March receiving positive critical reviews amid reports of ‘strong’ player engagement. Providing some context, the company said total sales including on the day of the release were greater than sales achieved by Planet Coaster when it was released on console in November 2020.
Consumers have three product choices on the console version including the Ultimate Edition which provides access to a season pass covering 12 content packs over the next 12-months.
Strong sales of the Ultimate Edition at launch will generate cash in 2024 but revenue will be recorded over the 2024 fiscal year to the end of March and fiscal 2025 as a portion of the revenue will be deferred as content is delivered in the following year.
SALE OF ROLLERCOASTER TYCOON 3 PUBLISHING RIGHTS
Frontier has sold the publishing rights for RollerCoaster Tycoon 3 to French-listed video game firm Atari to enable Atari to become the sole publisher of all major titles within the RollerCoaster franchise.
The cash consideration was agreed at $7 million comprised of $4 million upfront and $3 million deferred. The game was originally developed by Frontier and launched in 2004.
Frontier’s cash position has grown to £23.4 million as of 31 March from £19.9 million at the end of December 2023. The board said it was ‘comfortable’ with the financial guidance provided for 2024.
Analyst Katie Cousins at Shore Capital said she was pleased to see an indication of improved performance and saw scope to nudge up her revenue forecast from £83 million toward the middle of the guidance range if momentum continues.
