Frontier Dev Share News (FDEV)

(Sharecast News) - Frontier Developments said on Wednesday that its focus on creative management simulation games had delivered record annual profit and cash generation, as revenue rose strongly in the year to 31 May.

The AIM-traded video games developer and publisher said provisional revenue for the 2026 financial year rose 16% to £104.8m from £90.6m a year earlier, its second-highest annual revenue performance.

Adjusted operating profit increased 44% to about £19.0m from £13.2m, surpassing the previous record of £15.9m set in 2019.

Frontier said underlying adjusted profit, excluding a £3.9m gain from the sale of publishing rights in 2025, more than doubled year on year.

Cash generation excluding capital transactions rose 46% to £18.8m from £12.9m, beating the previous record of £15.8m achieved in 2019.

Year-end cash increased to £44.0m from £42.5m, despite £17.5m of investment in Frontier shares.

The company said it spent £15.5m buying back 3,947,854 shares through two buyback programmes, reducing total voting rights by 10% and enhancing expected earnings per share by 11% for 2027 and beyond.

Its employee benefit trust also spent £2.0m buying 532,174 shares to satisfy future employee share option exercises.

Frontier said almost 90% of revenue in 2026 came from creative management simulation games, up from 77% in 2025.

Performance was driven by the successful release of Jurassic World Evolution 3, alongside continued contributions from the Planet Coaster and Planet Zoo franchises and the first two Jurassic World Evolution games.

Gross operating costs rose by only 3% to about £62.4m, while tax credits were higher than expected due to the transition to the new Video Games Expenditure Credits regime.

The company said Jurassic World Evolution 3 had seen strong player engagement since launch, with additional paid downloadable content and free updates supporting retention.

A major expansion linked to the Jurassic World Rebirth film is due on 16 June, with further content planned during the 2027 financial year.

Planet Coaster continued to benefit from updates and new content, while Planet Zoo remained Frontier's most successful game to date.

Planet Zoo 2 is scheduled for release on 13 October 2026 on PC, PlayStation 5 and Xbox Series S and X.

Frontier also said Warhammer 40,000: Chaos Gate - Deathwatch, its second planned 2027 release, had been announced in May, while annual revenue from Elite Dangerous grew following a reset of its content strategy over the last 18 months.

The group is developing a new own-IP creative management simulation game to create a new Planet franchise in the 2028 financial year, reinforcing its strategy of delivering one CMS title a year.

Frontier said the 2027 financial year was expected to start positively, helped by Jurassic World Evolution 3 joining Microsoft's Game Pass subscription service on 2 June, the Jurassic World Rebirth expansion and expected portfolio sales ahead of summer promotions.

The board said it was confident of delivering 2027 in line with expectations.

Chief executive officer Jo Cooke said the results reflected "a stunning turnaround" over the last three years under her predecessor Jonny Watts.

"We are now set for further success, with three new games scheduled for release across FY27 and FY28," she said.

"For FY27 we have two terrific sequels, with Planet Zoo 2 and Warhammer 40,000: Chaos Gate - Deathwatch, and for FY28 we are creating a new Planet game franchise, continuing our commitment to building and sustaining world-class CMS games."

At 0841 BST, shares in Frontier Developments were down 0.26% at 468.27p.

Reporting by Josh White for Sharecast.com.

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