Frontier Dev Share News (FDEV)

(Alliance News) - Shares in Frontier Developments PLC jumped on Tuesday as it reported record annual revenue of GBP114 million.

Shares in the Cambridge, England-based company were up 21% to 1,302.00 pence each in London on Tuesday morning.

The video game maker and publisher, with titles such as Jurassic World Evolution 2, Planet Zoo, and Elite Dangerous, reported record revenue of GBP114 million for the 12 months to May 31, an increase of 26% from GBP90.7 million year-on-year.

Frontier put the revenue increase down to the release of its Jurassic World Evolution 2 title. By May 31, Frontier sold over 1.3 million base game units of Jurassic World Evolution 2 across all platforms and formats, excluding base game digital downloads through Microsoft's Game Pass subscription service. The base game became available on Microsoft's platform on May 17.

On Tuesday, Frontier launched a new paid-downloadable pack, Jurassic World Evolution 2: Dominion Biosyn Expansion. The company said that the "major new expansion" is set to deliver a strong start to financial year 2023.

However, Frontier said that revenue from Elite Dangerous fell below the company's expectations for financial year 2022. It aims to support and grow the game's player community and build on its narrative during the coming year.

Frontier's third-party game distribution business, Frontier Foundry, published Warhammer 40,000: Chaos Gate – Daemonhunters. Following its launch on May 5, Frontier has described it as the platform's "most successful Frontier Foundry title". Three further Foundry titles are planned for release in financial year 2023.

Frontier expects Foundry to become a material part of the business, it added.

Further, financial 2022 earnings before income, tax, depreciation, and amortisation are anticipated to be in line with expectations of GBP7 million to GBP8 million, down from GBP12 million the prior year. The year-on-year fall reflects a greater level of investment into game developments, Frontier explained.

It also plans to fully amortise Elite Dangerous: Odyssey due to lower than expected engagement. The resulting charge is expected to be around GBP7 million.

After the deduction of the one-off GBP7 million amortisation charge, operating profit for financial year 2022 is expected to be between GBP1 million to GBP2 million.

Looking forward, the board said it is "comfortable" with current analyst expectations for financial year 2023. Further, it expects Frontier to continue to grow revenue of around 20% per year.

Founder and Chief Executive David Braben said: "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. "

By Sophie Rose; sophierose@alliancenews.com

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