RNS Number : 7168O
Frontier Developments PLC
14 June 2022
14 June 2022
Frontier Developments plc
Strong second half and record annual revenue (26% growth)
Frontier Developments plc (AIM: FDEV, "Frontier" or the
"Company"), a leading developer and publisher of videogames based
in Cambridge, UK , provides an update on trading for financial year
FY22, the 12 months ended 31 May 2022.
-- Record revenue (unaudited ) of GBP114 million in FY22, an
increase of 26% on the previous year
-- Jurassic World Evolution 2 base game unit sales exceeded 1.3 million units
-- Warhammer 40,000: Chaos Gate - Daemonhunters performing ahead of expectations
-- FY22 cash profit (adjusted EBITDA*) in line with expectations (subject to audit)
-- Accounting profit (IFRS operating profit) reduced by a one-off amortisation charge
-- FY23 releases to include Jurassic World Evolution 2: Dominion
Biosyn Expansion and F1(R) Manager 2022 in June and August 2022
respectively, plus three new Foundry titles
* Earnings before interest, tax, depreciation, amortisation
charges related to game developments and Frontier's game
technology, less investments in game developments and Frontier's
game technology, and excluding share based payment charges and
other non-cash items
Building on the growth achieved in the first half of the
financial year and a monthly sales record in December 2021, a
strong trading performance in the period 1 January to 31 May 2022
helped to deliver record annual revenue of approximately GBP114
million in FY22. This unaudited result is 26% above the previous
record of GBP90.7 million, achieved in FY21.
Jurassic World Evolution 2
FY22 benefitted from the release of another successful new
Frontier title, Jurassic World Evolution 2, which has continued to
attract an expanding player base since its launch in November 2021.
By 31 May 2022 Jurassic World Evolution 2 had achieved over 1.3
million base game units sold across all platforms and formats,
excluding base game digital downloads through Microsoft's Game Pass
subscription service, through which the base game became available
on 17 May 2022.
The development and release of paid-downloadable content
('PDLC') and free content has, as usual, been an important element
of our strategy in continuing to engage and entertain existing
Jurassic World Evolution 2 players whilst attracting new ones. We
have seen strong uptake of the three separate PDLC packs available
as at 31 May 2022.
Releasing today, a compelling new PDLC launches, alongside
Universal Pictures and Amblin Entertainment's Jurassic World
Dominion. The Jurassic World Evolution 2: Dominion Biosyn Expansion
launches on all existing platforms, inviting park managers to
immerse themselves in the game's biggest DLC to date, inspired by
the epic events of Jurassic World Dominion.
Watch the Jurassic World Evolution 2: Dominion Biosyn Expansion
announcement trailer here
This major new expansion for Jurassic World Evolution 2 is set
to deliver a strong start for FY23, and additional PDLC will be
released during FY23.
Our existing game portfolio
Our portfolio of internally developed titles which released
before FY22 - Elite Dangerous, Planet Coaster, Jurassic World
Evolution and Planet Zoo - continue to reach new audiences, and
each delivered material revenues in FY22. Most notably, Planet Zoo
performed especially well, supported by 4 new PDLC packs releasing
in FY22, alongside free content.
As previously reported, following the launch of the major
Odyssey expansion over a year ago, in May 2021, Elite Dangerous
revenue in FY22 fell below our original expectations. We are
focussing on supporting and growing our player community, and will
build on the narrative aspects of Elite Dangerous during FY23.
Alongside our internally developed titles, Frontier Foundry, our
games label for publishing carefully selected partner developments,
made good progress in FY22, with three new game releases.
Our most recent Frontier Foundry title, Warhammer 40,000: Chaos
Gate - Daemonhunters, received a very positive reception at its
launch on 5 May 2022. After one month of sales it has already
become our most successful Frontier Foundry title to date, with
performance above expectations.
We have three more Frontier Foundry titles planned for release
in FY23, including Deliver Us Mars which has now been confirmed for
release in September 2022. We continue to expect Frontier Foundry
to become a material part of our business.
Adjusted EBITDA, which we referred to as 'operating cash flow'
in previous years, is a measure of cash operating profit, being
earnings before interest, tax, depreciation, amortisation charges
related to game developments and Frontier's game technology, less
investments in game developments and Frontier's game technology,
and excluding share based payment charges and other non-cash
Subject to audit, adjusted EBITDA in FY22 is anticipated to be
in line with expectations at approximately GBP7-8 million versus
GBP12 million reported for FY21. The year on year reduction
reflects greater investment in significant game developments for
release in future years, including F1(R) Manager 2022 for this
summer (in FY23), and our Warhammer Age of Sigmar real-time
strategy game for FY24.
Due to the lower than expected engagement with Elite Dangerous:
Odyssey on PC, and the decision to cancel the console development
of this major expansion, the Board has prudently decided to fully
amortise the Elite Dangerous: Odyssey capitalised intangible asset
as at 31 May 2022. The resulting additional amortisation charge in
FY22 is expected to be approximately GBP7 million.
This non-cash accounting adjustment has no impact on cash flow,
cash balances, or adjusted EBITDA, but will reduce operating profit
as reported under IFRS for FY22. Subject to audit, operating profit
as reported under IFRS is expected to be approximately GBP1-2
million after deduction of the one-off GBP7 million Elite
Dangerous: Odyssey amortisation charge.
Frontier continues to benefit from a strong balance sheet, with
total cash balances at 31 May 2022 (unaudited) of GBP39 million (31
May 2021: GBP42 million). The small reduction in cash during the
financial year reflected a greater investment in significant game
developments for release in future years, and the GBP5 million
purchase of shares by the Employee Benefit Trust undertaken in
April 2022 to satisfy future share option exercises by employees
F1(R) Manager 2022
On 7 June 2022 we announced, to a very positive response, our
officially licensed Formula 1(R) management simulation, F1(R)
Manager 2022, launching on 30 August 2022 across PC, PlayStation(R)
5, Xbox Series X|S, PlayStation(R) 4 and Xbox One. Pre-order sales
are now live, with early access from 25 August for those who
pre-order. F1(R) Manager 2022 is the first of our annual Formula
1(R) titles as part of our exclusive licence for Formula 1(R)
Stepping into the role of Team Principal, one of the
highest-pressure roles in motorsport, players will lead their
chosen team to glory in the 2022 FIA Formula One World
Championship(TM) and beyond. F1(R) Manager 2022 offers fans an
unrivalled F1(R) experience, capturing in unprecedented detail the
world of F1(R) and the high-octane excitement of running a team.
From the paddock to the podium, players will need to manage
decisions on and off the track to ensure their success, all while
balancing the books and satisfying both the board and the
all-important team sponsors.
Watch the F1(R) Manager 2022 announcement trailer here
Our talented people have delivered record revenue for FY22 and
are working hard on nurturing our existing games whilst developing
new titles. We welcomed a record number of people to Frontier
during FY22, with 272 new starters, helping grow our diverse and
multi-disciplinary team to 790 people as at 31 May 2022.
Frontier has a long track record of creating innovative, high
quality games while recognising that a commitment to productivity
and efficiency underpins our long term success. We are expanding
our team to bring more games and content to new and existing
players through our portfolio of genre-leading titles. We are also
investing in the development of our team, mindful of the stresses
and strains that come with rapid growth.
Over the medium term, the Board expects Frontier to continue to
grow revenue by around 20% on average per annum, with any annual
growth rate variability largely driven by the number and scale of
new releases in each year.
We begin FY23 in excellent shape. Our portfolio continues to
thrive, with Elite Dangerous, Jurassic World Evolution 2 and Planet
Zoo, all set to benefit from new DLC during FY23. Our major new
game release in FY23 is F1 Manager 2022.
This new financial year for Frontier Foundry is also off to a
good start following the successful release of Warhammer 40,000:
Chaos Gate - Daemonhunters in May 2022. We have three new Frontier
Foundry game releases planned for FY23 including Deliver Us
The Board is comfortable with current analyst expectations for
FY23 based on the expected performance of our existing games and
the anticipated success with our planned new releases.
With F1(R) Manager 2022 scheduled for release on 30 August 2022
(25 August for those who pre-order), we expect to provide a trading
update on FY23 in mid-September 2022, alongside the publication of
our full audited FY22 financial results.
David Braben, CEO and Founder, commented:
"We've had another year of solid growth. Following its launch in
November 2021, our player base for Jurassic World Evolution 2 has
continued to expand, as expected. We are now very well set up for
the future, with the Dominion expansion and bundles launching today
for Jurassic World Evolution 2, and F1 Manager 2022 due later this
summer. The team has done a great job this year, overcoming many
challenges and working tirelessly to support our games and our
players. Our games label, Frontier Foundry, has performed well too,
with Warhammer 40,000: Chaos Gate - Daemonhunters launching right
at the end of the financial year and looking good for FY23 too,
with further exciting Foundry releases to come."
Conference call for analysts:
Frontier will host a conference call with analysts at 09 .30am
today. To participate please contact Tulchan Communications via
firstname.lastname@example.org for details.
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.
Frontier Developments +44 (0)1223 394 300
David Braben, CEO
Alex Bevis, CFO
Liberum - Nomad and Joint Broker +44 (0)20 3100 2000
Neil Patel / Cameron Duncan
Jefferies - Joint Broker +44 (0)20 7029 8000
Max Jones / William Brown
Tulchan Communications +44 (0)20 7353 4200
Matt Low / Alex Dart
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. Based in Cambridge, Frontier uses its proprietary COBRA
game development technology to create innovative genre-leading
games, primarily for personal computers and videogame consoles. As
well as self-publishing internally developed games, Frontier also
publishes games developed by carefully selected partner studios
under its Frontier Foundry games label.
Frontier's LEI number: 213800B9LGPWUAZ9GX18.
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(END) Dow Jones Newswires
June 14, 2022 02:00 ET (06:00 GMT)
Frontier Developments (LSE:FDEV)
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