Formula one video game
Frontier Developments to report full year profit / Image source: Teneo
  • Full year revenue and profit beat
  • Shares have gained 124% this year
  • Board comfortable with 2025 expectations

Video games developer and publisher Frontier Developments (FDEV:AIM) revealed better-than-expected full-year results and gave a confident outlook, sending the shares 10% higher to 306p, taking gains for the year to 124%.

The shares remain 90% below the highs reached in 2021 following a string of profit warnings and a strategy reset to focus on the company’s core CMS (creative management simulation) games.

A strong second-half performance from the fantasy games developer’s back catalogue and the successful release of Planet Zoo: Console Edition resulted in revenue for the year to 31 May coming in at £89 million, comfortably ahead of the ‘beaten-down’ analyst consensus of £85.6 million.


Operating costs were reduced by 20% during the second half, which pushed the business into profit on an adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) basis.

The company said it expects full year adjusted EBITDA to be in profit by around £0.5 million, including proceeds of $7 million from the sale of RollerCoaster Tycoon 3 to Atari, compared with market expectations of a £5 million loss.

Frontier ended the year with net cash of £29.5 million, up slightly on the £28.3 million recorded on 31 May 2023.

Looking ahead, chief executive Jonny Watts commented: ‘We have started the new financial year reset and refocused, with a clear strategy and sustainable cost base. We have a game portfolio that continues to deliver pleasing results and an exciting CMS-led roadmap ahead.

‘I look forward to the launch of F1® Manager 2024 next month, and to revealing the details of our own-IP CMS game coming later in the financial year’.

The company reaffirmed it intended to release three CMS games over the next three consecutive financial years. These include an unnamed own-IP (intellectual property) game, on track for delivery in the current financial year. The title will be revealed in the coming months.


Analysts at Liberum increased their 2024 revenue forecast by 4% and nudged up adjusted EBITDA into positive territory. For 2025 the upgrades are more muted with a minor revenue upgrade to £87 million, in line with management guidance.

Liberum revised its 2025 adjusted EBITDA forecast to a loss of £2.6 million from a loss of £3.7 million.

The broker believes its forecasts are conservatively-based and leave room for upgrades given it believes ‘a clear inflection point’ has been reached.


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Issue Date: 12 Jun 2024