FY24 Trading Update – a strong H2 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).

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.

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".