Last checked at 2 Apr 2024 07:00
2 April 2024
Frontier Developments plc
Good progress and strengthening cash position
Frontier Developments plc (AIM: FDEV, 'Frontier' or the 'Company'), a leading developer and publisher of videogames based in Cambridge, UK, provides an update on trading including the successful release of Planet Zoo: Console Edition, reports on the sale of the publishing rights for RollerCoaster Tycoon 3 to Atari, and highlights an improving cash position.
Trading
Sales across Frontier's portfolio since publication of its interim results in January 2024 have been in-line with expectations, with the largest contributions being provided by Frontier's creative management simulation ('CMS') games, led by Jurassic World Evolution 2 and Planet Zoo.
On 26th March Planet Zoo, which was previously available on PC only, released successfully on Xbox Series X|S and PlayStation 5 to positive critical reviews and strong player engagement. Total sales up to and including the day of release were greater than the sales achieved by Planet Coaster when it came to consoles on 10th November 2020.
The successful launch performance of Planet Zoo: Console Edition was supported by three product options, including an Ultimate Edition which provides access to a Season Pass covering 14 future content packs over the next 12 months. Strong sales of the Ultimate Edition at launch will generate cash in FY24 but revenue will be split between FY24 and FY25, since a portion of the revenue will be deferred into FY25 as content is delivered in that financial year.
RollerCoaster Tycoon 3 publishing rights
Frontier has a long track-record of success in rollercoaster simulation games, including the development of the 2004 game RollerCoaster Tycoon 3, working in collaboration with Chris Sawyer, the original architect of the RollerCoaster Tycoon franchise. Frontier went on to develop the ultimate coaster park simulation and BAFTA-nominated Planet Coaster, which quickly became one of the top selling PC games of 2016 when it released in that year. Planet Coaster gives players unlimited freedom to build rides and scenery piece by piece, with advanced management gameplay and a connected global village where everyone can share in the creativity of players around the world. Subsequently, many successful PDLC packs and a console edition were launched.
The publishing rights for RollerCoaster Tycoon 3 returned to Frontier in 2018 under the original development agreement, and since then Frontier has been publishing the game on PC, Mac, iOS and Nintendo Switch under the Frontier Foundry games label, generating profit (net sales receipts after deduction of all costs) of approximately US$ 1.5 million per year. On 15th March 2024 Frontier sold the publishing rights for RollerCoaster Tycoon 3 to Atari Inc ('Atari') to enable Atari to become the sole publisher of all major titles within the Rollercoaster Tycoon franchise. Total consideration for the sale of the publishing rights was agreed at US $7m, made up of US $4 million of up-front cash and US $3 million of deferred cash consideration. No value was attributed to the publishing agreement on Frontier's balance sheet prior to the transfer. The proceeds of the disposal will be utilised by the Company for general working capital purposes.
Cash position
Frontier's cash position grew to £23.4 million as of 31st March 2024, up from £19.9 million as at 31st December 2023. Cash received during that three month period included the US $4m of up-front consideration due from the sale of the RollerCoaster Tycoon 3 publishing rights and the first tranche of the Video Games Tax Relief cash credit related to the FY23 UK tax returns. Cash receipts from the March launch of Planet Zoo: Console Edition will be received during April and May.
Outlook
The Board remains comfortable with the financial guidance previously provided for FY24, before taking into account the incremental profit and cash from the sale of the RollerCoaster Tycoon 3 publishing rights. The Board expects to provide an update on the outturn for the financial year in June 2024.
Enquiries:
Frontier Developments +44 (0)1223 394 300
Jonny Watts, CEO
Alex Bevis, CFO
Peel Hunt - Nomad and Corporate Broker +44 (0)20 3100 2000
Neil Patel / Paul Gillam / Kate Bannatyne
Liberum - Joint Corporate Broker +44 (0)20 3100 2000
Max Jones / Nikhil Varghese
Teneo +44 (0)20 7353 4200
Matt Low / Arthur Rogers
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