Frontier Developments cashes in with strong bounceback

Frontier cited a strong back-catalogue performance in H2 and the successful release of Planet Zoo: Console Edition in March and delivered full-year revenue of around £89 million (FY23: £104.6m).

During the second half, annual operating costs were reduced by approximately 20 per cent through an organisational review, which completed as planned in March.

Frontier was therefore 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.

Full year adjusted EBITDA as a whole is also expected to be in the black with a provisional profit of approximately £0.5m (Loss of £4.6m), 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 £12m, to £29.5m.

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 May 9 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 July 23 on PC, PlayStation® 5, Xbox Series X|S, PlayStation® 4 and Xbox One.

The board said it was comfortable with the current consensus of analyst expectations for revenue of £87 million for the next year and confident of being able to achieve profitability in the coming 12 months through a continued focus on driving return on investment and tight cost control.

CEO Jonny Watts 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 refocused 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.”