REG - Frontier Developmnts - FY24 Trading Update – a strong H2 performance

Frontier DevelopmentsAnnouncement

12/06/2024 07:15

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RNS Number : 0457S  Frontier Developments PLC  12 June 2024

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.

 

www.frontier.co.uk (http://www.frontier.co.uk/)

 

 

 

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