Last checked at 17 Oct 2023 07:00
This announcement contains inside information
17 October 2023
Frontier Developments plc
Organisational Review and Trading Update
Frontier Developments plc (AIM: FDEV, 'Frontier' or the 'Company'), a leading developer and publisher of videogames based in Cambridge, UK, announces an Organisational Review and provides an update on trading.
Organisational Review
During 2023, Frontier refined its strategy to refocus on its core strengths following a period of disappointing financial performance and more challenging industry conditions. The Organisational Review announced today will reshape Frontier to deliver on that updated strategic plan more efficiently, return the Company to profit, and create a sustainable foundation for the future.
The review will deliver enhancements to Frontier's leadership and structure, drive efficiencies across the Company and achieve a reduction in annual operating costs of up to 20%. The cost reductions will be achieved through a recruitment freeze, spending cuts and, unfortunately, redundancies, subject to consultation.
The Organisational Review and resulting actions are expected to conclude by early 2024, placing Frontier in a strong position to deliver efficiently on its strategic plan over the medium term, and capitalise on future opportunities.
Trading Update
Frontier's existing game portfolio continues to perform in line with expectations, and the Company looks forward to the important November and December trading period, which will include the release of Warhammer Age of Sigmar: Realms of Ruin (releasing on 17th November), Black Friday, and Christmas.
The Board remains comfortable with market expectations for FY24, with consensus revenue at £108 million and consensus Adjusted EBITDA* loss of £9 million. The cost reductions from the Organisational Review are expected to be fully effective for FY25.
The Company will provide an update on the Organisational Review in January 2024 alongside interim financial results.
* Adjusted EBITDA is earnings before interest, tax, depreciation, and amortisation charges related to game developments and Frontier's game technology, less investments in game developments and Frontier's game technology, and excluding impairment charges, share-based payment charges and other non-cash items.
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended). This announcement is issued on behalf of the Company by Alex Bevis, CFO.
Enquiries:
Frontier Developments +44 (0)1223 394 300
Jonny Watts, CEO
Alex Bevis, CFO
Peel Hunt - Nomad and Joint Corporate Broker +44 (0)20 3100 2000
Neil Patel / Paul Gillam / James Smith
Liberum - Joint Corporate Broker +44 (0)20 3100 2000
Max Jones / Nikhil Varghese
Teneo +44 (0)20 7353 4200
Matt Low / Alex Dart
About Frontier Developments plc
Frontier is a leading independent developer and publisher of videogames founded in 1994 by David Braben, co-author of the iconic Elite game. Frontier uses its proprietary COBRA game development technology to create innovative genre-leading games, primarily for personal computers and videogame consoles.
Frontier's LEI number: 213800B9LGPWUAZ9GX18.
www.frontier.co.uk