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Gamer Frontier Developments interim results claim a record financial performance

Gamer Frontier Developments interim results claim a record financial performance

Wed 6 Feb 2019 08:04 by ukcitymedia.co.uk about : trading updates - 0 Comments - 3916 words


frontier-developments-interims

Frontier Developments plc (AIM: FDEV, "Frontier", the "Company")a leading developer and publisher of video games based in Cambridge, UK has published its interim results for the 6 months to 30 November 2018.

Overview

Frontier, founded in 1994, has a proven track record of world-class video-game development in many different genres on many different platforms, delivered over multiple decades, using its own COBRA engine.  2013 saw Frontier begin the transition to a higher margin self-publishing business model, combined with a strategy of growing a portfolio of game franchises over time and supporting, nurturing and enhancing each game franchise for many years after its launch.

December 2014 marked the release of Elite Dangerous, followed by Planet Coaster in November 2016 and in June 2018, Frontier launched Jurassic World Evolution, inspired by the Jurassic World film franchise. Frontier intends to continue to nurture and grow its portfolio, supporting existing franchises whilst investing in new titles. The development of Frontier's fourth game franchise is on track, with release planned for later in calendar year 2019.

For the six months to 30 November 2018 Frontier delivered a record financial performance, driven by the launch of Jurassic World Evolution in June 2018, Frontier's biggest launch to date, and the ongoing performance of Elite Dangerous and Planet Coaster.Frontier achieved revenue of £64.7 million in the period compared to £19.0 million for the six months to 30 November 2017.

Financial Summary

 

Interim results for Financial Year 2019

(6 months to 30 November 2018)

Interim results for Financial Year 2018

(6 months to 30 November 2017)

 

Full results for Financial Year 2018

(12 months to 31 May 2018)

Revenue

£64.7m

£19.0m

 

£34.2m

Operating Profit

£17.2m

£3.0m

 

£2.8m

Operating Margin %

27%

16%

 

8%

EBITDA*

£21.7m

£6.0m

 

£9.4m

EPS (basic)

40.2p

8.0p

 

9.6p

Operating Cash Flow**

£16.5m

£1.0m

 

(£2.8m)

Net Cash Balance

£39.5m

£29.1m

 

£24.1m

 

*Earnings before interest, tax, depreciation and amortisation

** Operating profit excluding non-cash items, less investments in franchises and other intangible assets

Operational & Strategic Highlights

·     Jurassic World Evolution launched on PC, PlayStation 4 and Xbox One in June 2018 alongside the film release of Jurassic World: Fallen Kingdom.  Jurassic World Evolution is Frontier's biggest launch to date, achieving 1 million base game unit sales in 5 weeks and 2 million base game units in seven months.

·     Planet Coaster, which launched in November 2016, continues to perform well, and has now passed 2 million base game units sold.  Frontier's strategy of providing free updates alongside the creation of a PDLC (paid downloadable content) business has been successful; 9 separate PDLC 'add-on' products are available as of 6 February 2019.

·     Elite Dangerous, which launched in December 2014, continues to expand and develop.  In December 2018 the Beyond series of free updates concluded with the release of Beyond - Chapter Four, introducing even more enhancements and features to further expand the Elite Dangerous gaming experience.  Elite Dangerous has now sold over 3 million base game units*** since launch in December 2014. 

·     The development of Frontier's fourth game franchise, based on the Company's own un-announced IP, is on track, with release planned for later in calendar year 2019.

·     In January 2019 Frontier celebrated 25 years of creativity, quality and innovation with a series of community events, culminating in a staff celebration event on 25 January 2019.

*** Previously the Company has reported "franchise units" for Elite Dangerous whereby the Elite Dangerous: Horizons expansion, sold at the same price as the base game, was also counted as one unit.  The Company has now simplified unit reporting to state gross unit sales of the base game only. 

Financial Highlights

·     Revenue increased by 240% to £64.7 million for H1 FY19 (the 6 months ended 30 November 2018) compared to £19.0 million for H1 FY18.  The significant growth reflects the success of Jurassic World Evolution together with the ongoing performance of Elite Dangerous and Planet Coaster, in line with the Company's strategy.

·     Gross profit margin of 61% (H1 FY18: 69%).  The reduction reflects royalties payable to Universal Games and Digital Platforms on sales of Jurassic World Evolution and physical disc sales of Jurassic World Evolution, which are lower margin than digital sales.

·     Operating profit of £17.2 million at a margin of 27% (H1 FY18: £3.0 million, 16%), with the growth in the percentage margin reflecting the substantial growth in revenue, albeit at lower gross profit margins.

·     Operating cash flow (operating profit excluding non-cash items, less investments in franchises and other intangible assets) increased to £16.5 million (H1 FY18: £1.0 million) due to the strong trading performance.

·     Cash balances increased by £15.4 million during the 6 month period to £39.5 million at 30 November 2018 (31 May 2018: £24.1 million).

Current Trading and Outlook

All three game franchises continue to perform well, following good trading performance during the competitive Holiday period incorporating Black Friday and Christmas price promotions.  The Board is comfortable with analysts' revenue projections of £79 million to £88 million for the current financial year (FY19, the year ending 31 May 2019).

Frontier's strategy of continuing to grow its portfolio whilst supporting existing game franchises is delivering well. The development of Frontier's fourth game franchise, based on the Company's own un-announced IP, is on track, with release planned for later in calendar year 2019.

David Braben, Chief Executive, said:

"In January we celebrated our 25th anniversary, and I am very proud of all of our achievements during our first 25 years. In the last five years we have successfully transitioned from a trusted 'work-for'-hire' developer to an established self-publisher with a portfolio of three released games franchises, a substantial and world-class team, and strong partnerships. It's particularly pleasing that our most recent launch, Jurassic World Evolution, has been our biggest to date.

However, I believe we are still at the start of our journey; we have a lot of exciting opportunities ahead of us driven by our resources, capability and experience, our strong partnerships, and the widening opportunities for games companies within the ever-changing entertainment industry."



These articles are summaries / highlights and dont always include all financial news updates. Check at company website INVESTORS INFORMATION for full published results.


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