Independent developer and publisher of video game franchises Frontier Developments (FDEV:AIM) upped its revenue expectations on increased demand and signed a new license with Games Worksop (GAW), pushing the shares 9% higher to £16.6.

The company acted swiftly to transition its staff to home working during March, prior to the lock-down. This helped the business to release two games on schedule before Easter.

The firm started to experience increased demand from China in February and then from other parts of the world in March as global lock-downs came into force and people began working from home.

As a result the board has upped its revenues guidance for the current financial year to 31 May to the top end of its prior range of £65m to £73m. Operating profits are anticipated to fall within the range of £11m to £13m.

Currently analysts expect revenues of £69.9m and operating profit of £11.8m, meaning that there is scope for further upgrades over the coming weeks.

Original plans to release a major new paid-for update of Elite Dangerous in December 2020 will now be moved to the first-quarter of 2021, due to the pandemic, but this is not expected to materially affect 2021 revenues.

GAMES WORKSHOP LICENSE

In a separate announcement, Frontier said it has signed an exclusive intellectual property (IP) license with war games miniatures manufacturer Games Workshop (GAW) to develop and publish a real-time strategy game based on the hugely popular Warhammer Age of Sigmar.

The license includes the rights for streaming services as well worldwide release on PC and console platforms to be released in the financial year ending 2023.

Chief executive David Braben commented, ‘we are delighted to announce this licence with Games Workshop. I personally think it's great news that two such well-established and world-class creative UK companies with global reach are collaborating on a new project.’

‘Our roadmap is looking stronger than ever, with two games from our internal developments for each of full year 2022 and full year 2023 and an exciting portfolio coming up from our third party publishing initiative, starting in full year 2021.’

Andrew Bryant, analyst at Broker Liberum said, ‘This takes Frontier into an exciting new genre, extends revenue visibility into full year 2023 and highlights the increasing value and potential of their development and publishing platform.’

READ MORE ABOUT FRONTIER DEVELOPMENTS HERE

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Issue Date: 01 May 2020