Video games developer Frontier Developments (FDEV:AIM) is preparing for lift-off after announcing the earlier-than-expected launch of the next major of expansion of space adventure game, Elite Dangerous: Horizons.

The expansion, labelled The Engineers, should have a positive impact on revenue and profitability in the year ending 31 May 2016, news which sends the shares up 1.5% to 201.5p.

It’s a turn-up for the £67 million cap, which issued a profit warning in March when it pushed back the release of the title from April until the first half of its next financial year, which starts on 1 June 2016.

FRONTIER DEVELOPMENTS - Comparison Line Chart (Rebased to first)

The slight delay has enabled additional development time, which Frontier says has greatly improved the quality of the game.

‘We are therefore optimistic that this new version is a catalyst for both for new and existing customers who have delayed their purchase of season two: Horizons,’ says FinnCap analyst Harold Evans.

Frontier plans to launch a version of Elite Dangerous: Horizons for Xbox One on 3 June.

Its second self-published title, Planet Coaster, is on track for a full release in the final calendar quarter of 2016. This will complete the group’s transition to a fully self-publishing video games company.

Frontier has had a lot of success with its original Elite Dangerous game, with unit sales exceeding 1.5 million since its launch in December 2014.

It has a strong balance sheet, with net cash of approximately £8.9 million as of 31 March, which puts it in a good position to support its investment plans going forward.

Despite the positive news, Frontier still has a lot to prove before its year-to-date 17% share price fall starts to reverse.

Issue Date: 27 May 2016