Frontier Developments achieves forecast-beating outcomes

Frontier Developments scored better-than-expected annual results following a solid second-half performance.

The Elite Dangerous maker said high demand for its back-catalogue games and Planet Zoo: Console Edition helped its revenue total around £89million for the 12 months ending May.

Although its turnover was down from the £104million it made the previous year, the Cambridge-based group had guided to make at least £85million.

Eating shoots: Frontier said high demand for its back-catalogue games and Planet Zoo: Console Edition helped its revenue total around £89million for the 12 months ending May

It also forecasts an adjusted earnings loss of ‘£5million or better,’ but the business now expects to post a provisional profit of about £500,000.

This figure included the gain from selling the publishing rights for RollerCoaster Tycoon 3 to Atari for $7million in March, which raised some much-needed cash for the AIM-listed firm.

Since last year, Frontier has refocused on ‘creative management simulation’ games, whereby players create or manage fictional communities or projects, after attempts to diversify into ‘adjacent genres’ were unsuccessful.

The company plans to release three CMS games over the coming three financial years, including an unannounced own-IP game and the next Jurassic World game.

Another game due to launch soon is F1 Manager 2024, the third instalment in the official Formula One racing management simulation series.

Jonny Watts, chief executive of Frontier, said: ‘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.’

Following the announcement, Frontier Developments shares soared by 9.4 per cent to 303p by early Wednesday afternoon, meaning they have climbed by around 180 per cent over the past six months.

For the current year, the group said it was ‘comfortable’ with revenue hitting analyst expectations of £87million and ‘confident of being able to achieve profitability.’

Frontier was founded in 1994 by David Braben, who later started the Raspberry Pi Foundation, a UK charity whose business arm creates computers that are popular among amateur coders and hobbyists.

Raspberry Pi shares soared by 42 per cent after going public on the London Stock Exchange on Tuesday, representing a significant victory for the UK markets, which have struggled to attract new listings this year.

Many firms have recently switched their primary listing to Wall Street in the hopes of higher valuations, such as construction materials supplier CRH, plumbing products distributor Indivior, and Paddy Power owner Flutter Entertainment.