Frontier Developments PLC on Thursday reported a swing to interim profit and a rise in revenue, as it eyed annual revenue to be no less than £100 million.

Shares were up 5.3% at 495.50 pence each on Thursday in London.

For the six months that ended on November 30, the video games publisher and developer reported revenue of £57.1 million, up 16% from £49.1 million the year before.

It swung to a pretax profit of £6.7 million from a loss of £1.3 million, as operating profit amounted to £6.9 million, compared to a loss of £1.3 million a year earlier.

Net research and development expenses reduced to £16.1 million from £18.6 million a year earlier, as a result of the ‘full amortisation of Elite Dangerous: Odyssey during financial 2022,’ the company explained.

Chief Executive Officer Jonny Watts said: ‘During the first half of the financial year our game portfolio performed largely in line with expectations. However, the key December trading period was below expectations and we believe this was partly due to increased player price sensitivity.’

Looking ahead, Frontier said it expects financial 2023 revenue to be in the range of £100 million to £114 million. Previous market consensus for revenue stood at £135 million.

For financial 2024, revenue growth is expected to be at 5% above the eventual revenue outcome for financial 2023.

‘The board believes it is still possible to surpass last year’s record revenue performance of £114 million. However, given the number of variables and the more challenging economic outlook, the board have set a minimum expectation of delivering revenue of not less than £100 million in FY23,’ it said.

In September, Frontier had posted a pretax profit of £944,000 for financial 2022, down significantly from £19.2 million the year before, while revenue grew 26% year-on-year to a record £114.0 million from £90.7 million.

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