Frontier Developments swings to interim loss and lowers guidance

(Alliance News) - Shares in Frontier Developments PLC on Wednesday tumbled, as the company posted ...

Alliance News 12 January, 2022 | 12:30PM
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(Alliance News) - Shares in Frontier Developments PLC on Wednesday tumbled, as the company posted a swing to an interim loss and lowered its revenue guidance for the current as well as the following financial year.

Shares in the Cambridge, England-based firm were down 27% at 1,300.08 pence each in London on Wednesday midday.

The video game maker and publisher, with titles such as Jurassic World Evolution 2, Planet Zoo, and Elite Dangerous, fell to a pretax loss of GBP1.6 million in the six months to September 30 from a profit of GBP6.9 million a year before.

Frontier blamed this on sales and marketing expenses that more than doubled to GBP7.5 million from GBP3.4 million in the period, largely due to the launch of Jurassic World Evolution 2. Furthermore, net research and development expenses grew 91% to GBP18.6 million from GBP9.7 million.

Nonetheless, the release of Jurassic World Evolution 2 in November and the ongoing performance of its existing game portfolio lead to sales growth.

The video game publisher recorded revenue of GBP49.1 million, up 33% from GBP36.9 million a year before in the half-year period.

"Jurassic World Evolution 2 was the main catalyst for growth, launching in the final month of the period," Frontier explained.

"Planet Coaster and Jurassic World Evolution delivered solid sales performances during the first half against a tough comparative period which included major new platform releases for each title," the company also added.

Revenue guidance for the current financial year was lowered slightly to GBP100 million to GBP120 million from GBP100 million and GBP130 million anticipated in late November.

The guidance for revenue in the following year was also lowered to GBP130 million to GBP160 million from the GBP160 million to GBP180 million originally anticipated for financial 2023.

Nevertheless, Frontier affirmed that it had "excellent prospects" for long-term growth based on the longevity of its existing portfolio and its future development and publishing plans.

He added: "We have the potential for much greater growth in the next few years as we reap the benefits of all the hard work we have done to adapt to these changes and capitalise on a great portfolio of existing games together with the exciting new franchises such as Formula 1 management games and our Warhammer Age of Sigmar real-time strategy game. We are well set up with a great portfolio for an exciting future," Chief Executive David Braben said.

By Abby Amoakuh; abbyamoakuh@alliancenews.com

Copyright 2022 Alliance News Limited. All Rights Reserved.

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Security Name Price Change (%) Morningstar
Rating
Frontier Developments PLC 202.00 GBX -0.25 -

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