Video games developer and publisher Frontier Developments (FDEV:AIM) raised full-year guidance for the second time this month, saying it now expects operating profit to be ‘materially ahead’ of the top of the prior range, pushing the shares up 11.7% to £18.48. The shares have moved ahead by a third over the last month.
Chief executive David Braben commented, ‘we continue to be delighted by the engagement, passion and feedback from our players, and look forward to a bright future post-lockdown, as we believe many of our new players will stay with us for the long term.’
STAYING STRONG
Strong demand continued into May compelling the board to raise guidance yet again, with full-year revenues now expected above the top end of prior guidance of £73m and operating profits materially ahead of the £13m upper band. Materially ahead is usually code for at least a 10% beat to give profits of £14.6m.
It is only three-weeks since the company upped its guidance to the top end of the range, so business must have been particularly brisk. Analysts have since increased their expectations for revenues by 3.5% to £72.4m and increased profit forecasts by 7.2% to £12.7m.
The implication is that analysts are still behind the curve and will be upgrading their numbers again. Broker Shore Capital currently expects profits of £12.3m and confirmed today that it will upgrade its numbers.
MILESTONES REACHED
Frontier’s most recent release, Planet Zoo has achieved unit sales of 1m in less than six-months making it the most successful PC game release to date and several months ahead of any previous games releases.
Other games have also reached revenue milestones with Elite Dangerous exceeding the 3.5m threshold in April while Jurassic World Evolution passed 3m unit sales in March. Meanwhile Planet Coaster crossed 2.5m unit sales during January.
The company will provide more details at the year-end update for the year ended 31 May 2020 on 8 June.
