REG - Frontier Developmnts - Excellent H1 Results & full year outlook upgraded
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RNS Number : 7795O Frontier Developments PLC 14 January 2026
14 January 2026
Interim Results
Excellent H1 Results and outlook for full year upgraded
Frontier Developments plc (AIM: FDEV, 'Frontier', the 'Group' or the
'Company'), a leading developer and publisher of video games based
in Cambridge, UK, publishes its unaudited interim results for the 6 months to
30 November 2025 ('H1 FY26' or the 'Period').
FINANCIAL SUMMARY & HEADLINES
H1 FY26 H1 FY25 H1 to H1 H1 to H1
(6 months to 30 November 2025) (6 months to 30 November 2024) Increase Increase %
Revenue £59.6m £47.3m £12.3m +26%
Adjusted Operating Profit* £9.7m £5.5m £4.2m +76%
IFRS Operating Profit £7.8m £4.5m £3.3m +73%
Cash balance at period end £40.1m £27.2m £12.9m +47%
· Highly positive player responses to new game Jurassic World Evolution
3 helped deliver H1 revenue growth of 26% and an increase in Adjusted
Operating Profit* of 76%.
· Following the growth achieved in H1 and a strong seasonal sales
performance entering H2, we raise our FY26 financial guidance to revenue of
around £100 million and Adjusted Operating Profit* of around £11 million.
· Planet Zoo has become Frontier's highest grossing individual game by
revenue, providing a solid foundation for release of a sequel, and for
Frontier's overall performance, in FY27.
* Adjusted Operating Profit measures Frontier's financial performance after
eliminating non-cash development cost accounting adjustments (cost
capitalisation, amortisation charges and impairment charges), non-cash share
charges, non-operating items (including restructuring costs), and after
recording the full benefits of tax and R&D expenditure credits against the
expenditure they relate to.
H1 FRANCHISE UPDATES - THE CMS STRATEGY IS DELIVERING
Revenue from Frontier's genre-leading creative management simulation ('CMS')
games increased 52% versus the comparative period, delivering 90% of total
revenue in H1 FY26 (H1 FY25: 75%), driven by October's release of Jurassic
World Evolution 3, which earned nominations at the Game Awards 2025 and the
BAFTA Games Awards 2026.
Inspired by the Universal Pictures and Amblin Entertainment films, Jurassic
World Evolution 3 continues to connect with new players. After the end of the
Period, Jurassic World Evolution 3 achieved an excellent sales performance in
December, including a Frontier Christmas Day sales record for an individual
game, to start the second half of the financial year strongly.
The success of Jurassic World Evolution 3 underscores the enduring strength
and scalability of the CMS model, and Frontier's ability to deliver compelling
games for its player communities. Alongside the success of the new game, the
Jurassic World Evolution game franchise benefitted in H1 from strong sales of
Jurassic World Evolution 2 during summer promotions, and ongoing sales of
Jurassic World Evolution.
H1 sales for the Planet Coaster franchise were slightly ahead of expectations,
building on proactive community engagement and new content for Planet Coaster
2, including the Sorcery Pack and free updates. With the Toybox Pack launching
post-period end in December to positive reception, the franchise is well
positioned for long-term performance.
Planet Zoo delivered an excellent revenue contribution in H1, becoming
Frontier's highest grossing individual game by revenue, as it continues to
lead in its genre and engage with a substantial community of players. This
bodes well for its sequel, coming in FY27.
Development is progressing well on the unannounced CMS title scheduled for
release in FY28, further strengthening the portfolio and support Frontier's
strategy of delivering high-quality, evergreen franchises.
Outside CMS, the ever-evolving Elite Dangerous space simulation game delivered
revenue growth of over 50% versus the comparative period, driven by new
content, ships, and sustained player engagement. Meanwhile, Frontier's team in
Canada, Complex Games, are on track with the development of an unannounced
game, which is scheduled for release in FY27.
CEO APPOINTMENT - A SMOOTH TRANSITION
As first announced on 16 December 2025, Jonny Watts, who served as CEO from
August 2022 and led Frontier's successful turnaround and strategic refocus on
CMS games, formally stepped down as CEO on 1 January 2026. Jo Cooke,
previously Chief Marketing Officer, assumed the CEO position and joined the
Board on the same date, bringing extensive industry experience and having
played a key role in the successful launch of Jurassic World Evolution 3.
Jonny will remain on the Board as an Executive Director until 31 May 2026 to
support a smooth transition.
TRADING AND OUTLOOK - GUIDANCE UPGRADE
After the end of the Period, strong sales across the portfolio in seasonal
price promotions delivered Frontier's second highest-ever December revenue.
Based on Frontier's financial performance in the first seven months of the
financial year, the Board are now upgrading FY26 financial guidance to revenue
of around £100 million and Adjusted Operating Profit* of around £11 million.
Jonny Watts, Executive Director and outgoing CEO, said:
"I'm incredibly proud of what Frontier has achieved in the first half of FY26
and in recent years. The success of Jurassic World Evolution 3 and the
strength of our CMS portfolio are a testament to the talent and dedication of
our team. I am delighted that we have successfully restored Frontier to a
position of consistent, sustainable growth and profitability. Frontier is well
placed for the future, and I look forward to supporting Jo and the team
through this transition."
Jo Cooke, incoming CEO, said:
"As we look ahead, Frontier is in an excellent shape to build on the strong
foundations established in recent years. I again want to thank Jonny for his
leadership and the pivotal role he played in shaping our strategy and
restoring growth. Jonny's efforts have left the business and our CMS-focused
roadmap in a fantastic place for the future. With a talented team and a robust
pipeline of exciting new games and additional content for existing games, we
remain committed to this strategy, listening to our players and delivering
exceptional experiences to them and long-term value for our shareholders."
There will be a call for analysts and institutional investors at 9:30am today.
To register, please contact frontier@teneo.com (mailto:frontier@teneo.com) .
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit)
Regulations 2019. The person responsible for making this announcement on
behalf of the Company is Alex Bevis.
Enquiries:
Frontier Developments
+44 (0)1223 394 300
Jo Cooke, CEO
Alex Bevis,
CFO
Peel Hunt - Nomad and Joint Corporate Broker +44 (0)20
7418 8900
Neil Patel / Ben Cryer / Kate Bannatyne
Panmure Liberum - Joint Corporate Broker +44
(0)20 3100 2000
Rupert Dearden / Dru Danford / Jamie Anderson
Teneo
+44 (0)20 7353 4200
Matt Low / Arthur Rogers
About Frontier Developments plc
Frontier is a leading independent developer and publisher of video games
founded in 1994 by David Braben, co-author of the iconic Elite game. Based in
Cambridge, Frontier uses its proprietary COBRA game development technology to
create innovative genre-leading games, primarily for personal computers and
videogame consoles.
Frontier's LEI number: 213800B9LGPWUAZ9GX18.
www.frontier.co.uk (http://www.frontier.co.uk)
Interim Results Statement
REVENUE AND GROSS PROFIT
Total revenue grew 26% to £59.6 million (H1 FY25: £47.3 million), led by the
outstanding performance of Jurassic World Evolution 3 and supported by the
continued sales of Frontier's other genre-leading games.
Gross profit, being revenue less distribution costs and IP royalties, grew to
£38.0 million (H1 FY25: £32.9 million), reflecting the growth in revenue.
Gross profit margin reduced to 64% (H1 FY25: 70%), primarily due to the
success of Jurassic World Evolution 3, which increased the proportion of
revenue from royalty-bearing licensed-IP games.
OPERATING COSTS
Adjusted operating costs, under the Adjusted Operating Profit* measure,
increased slightly to £28.6 million (H1 FY25: £27.4 million), through the
accrual of higher all-staff profit-related bonuses, which are due for payment
in September 2026 based on profit for the full financial year. H1 profit grew
by over 70% compared to H1 FY25.
Operating costs under IFRS also increased slightly to £30.5 million (H1 FY25:
£28.4 million), with the all-staff bonus accrual again being a contributory
factor. Another reason for the increase was a fall in the proportion of
development costs capitalised under IAS 38 to 69% (H1 FY25: 76%). This
reflected the investment in free updates and upgrades for Planet Coaster 2
delivered in the Period, the costs of which are not capitalised.
FINANCIAL PERFORMANCE
Adjusted Operating Profit*, which reflects cash profitability with game
development costs expensed as they are incurred, grew by 76% to £9.7 million
(H1 FY25: £5.5 million) through the strong trading performance achieved in
the Period. Operating profit also increased substantially under IFRS, up 73%
to £7.8 million (H1 FY25: £4.5 million).
Included in both Adjusted Operating Profit* and IFRS operating profit is other
operating income of £0.3 million (H1 FY25: nil), which relates to the sublet
from July 2025 of a portion of Frontier's office on the Cambridge Science
Park.
CORPORATION TAX, TAX CREDITS AND R&D EXPENDITURE CREDITS
In arriving at the calculation of Adjusted Operating Profit*, a tax credit of
£2.9 million has been recognised (H1 FY25: £3.4 million), which aligns the
expected benefits of tax and R&D expenditure credits against the
expenditure they relate to, in the period of the expenditure.
Under IFRS, accounting an income tax credit of £27,000 was recognised in the
Period (H1 FY25: £nil) for tax filings in Canada (Complex Games). As in
previous years, an update will be provided in the full-year financial results
in respect of the anticipated Video Games Tax Relief claim for qualifying
development activities and the tax charge for the Group. Additional
corporation tax disclosures will be provided in the FY26 Financial Statements.
PROFIT AFTER TAX AND EARNINGS PER SHARE
Profit after tax grew to £8.0 million (H1 FY25: £4.4 million) and basic
earnings per share grew to 21.4 pence (H1 FY25: 11.4 pence).
CASH POSITION AND CASHFLOW
Frontier continues to be well capitalised and has no debt, with a cash balance
of £40.1 million at 30 November 2025 (31 May 2025: £42.5 million, 30
November 2024: £27.2 million). During the Period Frontier undertook a £10.0
million share buyback programme to return surplus capital to shareholders,
improve return on equity and increase earnings per share, while maintaining
the financial headroom to invest in Frontier's growth strategy. Excluding the
cash outflow of £10.0 million for the share buyback, underlying cash grew by
£7.6 million through the strong trading performance achieved in the Period.
Cash grew further during December through the receipt of November's net
revenue, ending at £43.4 million on 31 December 2025.
CONSOLIDATED INCOME STATEMENT
FOR THE PERIOD ENDED 30 NOVEMBER 2025
Note 6 months to 6 months to
30 November 2025 30 November 2024 12 months to
£'000
£'000
31 May 2025
£'000
Revenue 59,629 47,291 90,600
Cost of sales (21,633) (14,388) (27,257)
Gross profit 37,996 32,903 63,343
Research and development expenses (17,356) (16,294) (31,971)
Sales and marketing expenses (4,869) (5,036) (7,710)
Administrative expenses (8,290) (7,030) (14,921)
Other operating income 334 - 3,910
Operating profit 7,815 4,543 12,651
Finance income 649 386 800
Finance costs (479) (531) (1,032)
Profit before tax 7,985 4,398 12,419
Income tax credit 27 - 3,968
Profit for the period attributable to shareholders 8,012 4,398 16,387
6 months to 6 months to
30 November 2025 30 November 2024 12 months to
p p 31 May 2025
p
Earnings per share
Basic earnings per share 5 21.4 11.4 42.4
Diluted earnings per share 5 20.2 11.1 40.7
All the activities of the Group are classified as continuing.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 NOVEMBER 2025
6 months to 6 months to
30 November 2025 30 November 2024 12 months to
£'000
£'000
31 May 2025
£'000
Profit for the period 8,012 4,398 16,387
Other comprehensive income
Items that will be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations (3) (199) (534)
Total comprehensive income for the period attributable to the equity holders 8,009 4,199 15,853
of the parent
The accompanying accounting policies and notes form part of this financial
information.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 NOVEMBER 2025
(REGISTERED COMPANY NO: 02892559)
Note 30 November 2025 30 November 2024 31 May
£'000
£'000
2025
£'000
Non-current assets
Goodwill 6,539 6,781 6,539
Other intangible assets 6 43,261 37,370 41,971
Property, plant and equipment 3,492 4,291 3,810
Right-of-use assets 16,542 18,625 17,548
Trade and other receivables 868 - 1,105
Total non-current assets 70,702 67,067 70,973
Current assets
Trade and other receivables 20,906 18,684 12,290
Current tax assets 4,868 7,207 4,928
Cash and cash equivalents 40,113 27,241 42,502
Total current assets 65,887 53,132 59,720
Total assets 136,589 120,199 130,693
Current liabilities
Trade and other payables (17,725) (12,251) (10,418)
Lease liabilities (1,871) (1,801) (1,823)
Deferred revenue (2,696) (3,429) (1,486)
Deferred income from R&D expenditure credits (957) - (955)
Current tax liabilities (20) - (276)
Total current liabilities (23,269) (17,481) (14,958)
Net current assets 42,618 35,651 44,762
Non-current liabilities
Provisions (107) (92) (100)
Lease liabilities (16,693) (18,609) (17,644)
Other payables (197) (671) (635)
Deferred revenue - (591) -
Deferred income from R&D expenditure credits (1,165) - (1,204)
Deferred tax liabilities (990) (381) (990)
Total non-current liabilities (19,152) (20,344) (20,573)
Total liabilities (42,421) (37,825) (35,531)
Net assets 94,168 82,374 95,162
Equity
Share capital 197 197 197
Share premium account 36,547 36,547 36,547
Treasury shares (10,180) - -
Equity reserve (13,486) (13,612) (12,955)
Foreign exchange reserve (1,410) (1,072) (1,407)
Retained earnings 82,500 60,314 72,780
Total equity 94,168 82,374 95,162
The accompanying accounting policies and notes form part of this financial
information.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 NOVEMBER 2025
Share capital £'000 Share premium account £'000 Treasury shares £'000 Equity reserve £'000 Foreign exchange reserve £'000 Retained earnings £'000 Total equity £'000
At 31 May 2024 197 36,547 - (13,283) (873) 54,235 76,823
Profit for the period - - - - - 4,398 4,398
Other comprehensive income:
Exchange differences on translation of foreign operations - - - - (199) - (199)
Total comprehensive income/(loss) for the period - - - - (199) 4,398 4,199
Share-based payment charges - - - 1,248 - - 1,248
Share-based payment transfer relating to option exercises and lapses - - - (1,681) - 1,681 -
Employee Benefit Trust cash inflows from option exercises - - - 104 - - 104
Transactions with owners - - - (329) - 1,681 1,352
At 30 November 2024 197 36,547 - (13,612) (1,072) 60,314 82,374
Profit for the period - - - - - 11,989 11,989
Other comprehensive income:
Exchange differences on translation of foreign operations - - - - (335) - (335)
Total comprehensive income/(loss) for the period - - - - (335) 11,989 11,654
Share-based payment charges - - - 1,120 - 1,120
Share-based payment transfer relating to option exercises and lapses - - - (477) - 477 -
Employee Benefit Trust cash inflows from option exercises - - - 14 - - 14
Transactions with owners - - - 657 - 477 1,134
At 31 May 2025 197 36,547 - (12,955) (1,407) 72,780 95,162
Profit for the period - - - - - 8,012 8,012
Other comprehensive income:
Exchange differences on translation of foreign operations - - - - (3) - (3)
Total comprehensive income/(loss) for the period - - - - (3) 8,012 8,009
Share-based payment charges - - - 1,106 - - 1,106
Share-based payment transfer relating to option exercises and lapses - - - (1,708) - 1,708 -
Employee Benefit Trust cash inflows from option exercises - - - 71 - - 71
Purchase of treasury shares - - (10,180) - - - (10,180)
Transactions with owners - - (10,180) (531) - 1,708 (9,003)
At 30 November 2025 197 36,547 (10,180) (13,486) (1,410) 82,500 94,168
The accompanying accounting policies and notes form part of this financial
information.
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE PERIOD ENDED 30 NOVEMBER 2025
6 months to 6 months to
30 November 2025 30 November 2024 12 months to
£'000
£'000
31 May 2025
£'000
Profit before taxation 7,985 4,398 12,419
Adjustments for:
Depreciation and amortisation 13,652 12,874 23,435
Movement in unrealised exchange gains on forward contracts - 611 -
Share-based payment expenses 1,106 1,248 2,368
Interest received (649) (386) (800)
Payment of interest element of lease liabilities 479 531 1,032
Other operating income - - (3,910)
Working capital changes:
Change in trade and other receivables (8,625) (5,373) 1,466
Change in trade and other payables 7,078 300 635
Change in deferred revenue 1,210 - (3,121)
Change in deferred income from R&D expenditure credits (37) - 2,159
Change in provisions 7 7 15
Cash generated from operations 22,206 14,210 35,698
Taxes (paid)/received (170) - 5,808
Net cashflows from operating activities 22,036 14,210 41,506
Investing activities
Purchase of property, plant and equipment (150) (229) (341)
Expenditure on other intangible assets (13,675) (15,576) (30,370)
Sale of publishing rights 246 195 4,005
Interest received 649 386 800
Net cashflows used in investing activities (12,930) (15,224) (25,906)
Financing activities
Employee Benefit Trust cash inflows from option exercises 71 104 118
Payment of principal element of lease liabilities (903) (854) (1,726)
Payment of interest element of lease liabilities (479) (531) (1,032)
Purchase of treasury shares (10,180) - -
Net cashflows used in financing activities (11,491) (1,281) (2,640)
Net change in cash and cash equivalents from continuing operations (2,385) (2,295) 12,960
Cash and cash equivalents at beginning of period 42,502 29,523 29,523
Exchange differences on cash and cash equivalents (4) 13 19
Cash and cash equivalents at end of period 40,113 27,241 42,502
The accompanying accounting policies and notes form part of this financial
information.
NOTES TO THE FINANCIAL INFORMATION
1. CORPORATE
INFORMATION
Frontier Developments plc (the 'Group' or the 'Company') develops and
publishes video games for the interactive entertainment sector. The Company is
a public limited company and is incorporated and domiciled in the United
Kingdom.
The address of its registered office is 26 Science Park, Milton Road,
Cambridge CB4 0FP.
The Group's operations are based and headquartered in the UK, with
subsidiaries based in Canada and the US.
2. BASIS OF PREPARATION AND STATEMENT OF COMPLIANCE
Basis of preparation
The consolidated interim financial statements have been prepared in accordance
with International Accounting Standard 34 'Interim Financial Reporting' (IAS
34), as issued by the International Accounting Standards Board (IASB) and as
adopted by the UK, and the disclosure requirements of the Listing Rules.
The consolidated interim financial statements do not comprise statutory
accounts within the meaning of section 434 of the Companies Act 2006 and have
not been audited or reviewed by the Company's auditors.
The consolidated interim financial statements should be read in conjunction
with the financial statements for the year ended 31 May 2025.
Statutory accounts for the year ended 31 May 2025 were approved by the Board
of Directors on 9 September 2025 and delivered to the Registrar of Companies.
The Auditor's Report was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under section 498 of the Companies
Act 2006.
The financial information has been prepared under the historical cost
convention except for financial instruments held at fair value. The financial
information is presented in Sterling, the presentation and functional currency
for the Group and Company. All values are rounded to the nearest thousand
pounds (£'000) except when otherwise indicated.
Going concern basis
The Group's and Company's forecasts and projections, taking account of current
cash resources and reasonably possible changes in trading performance, support
the conclusion that there is a reasonable expectation that the Group and
Company has adequate resources to continue in operational existence for a
period of not less than 12 months from the date of the consolidated interim
financial statements. The Group and Company therefore continue to adopt the
going concern basis in preparing their financial statements.
3. ACCOUNTING POLICIES
The consolidated interim financial statements have been prepared in accordance
with the accounting policies adopted in the Group's most recent annual
financial statements for the year ended 31 May 2025.
4. ACCOUNTING ESTIMATES AND KEY JUDGEMENTS
When preparing the consolidated interim financial statements, management
undertakes a number of judgements, estimates and assumptions about recognition
and measurements of assets, liabilities, income and expenses. The actual
results may differ from these estimates.
The judgements, estimates and assumptions applied in the interim financial
statements, including the key sources of estimation uncertainty, were the same
as those applied in the Group's last annual financial statements for the year
ended 31 May 2025.
5. EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the profits
attributable to the shareholders of Frontier Developments plc divided by the
weighted average number of shares in issue during the Period, excluding shares
held in treasury.
During the Period Frontier executed a share buyback programme of £10 million,
acquiring 2,518,527 shares which were placed into treasury. As at 30 November
2025, there were 39,478,535 shares in issue, including the shares held in
treasury. The total number of voting rights in the Company as at 30 November
was therefore 36,960,008.
6 months to 30 November 2025 6 months to 30 November 2024 12 months to 31 May 2025
Profit attributable to shareholders (£'000) 8,012 4,398 16,387
Weighted average number of shares 37,439,862 38,649,551 38,658,275
Basic earnings per share (p) 21.4 11.4 42.4
The calculation of the diluted earnings per share is based on the profits
attributable to the shareholders of Frontier Developments plc divided by the
weighted average number of shares in issue during the Period, excluding shares
held in treasury, and as adjusted for the dilutive effect of share options.
6 months to 30 November 2025 6 months to 30 November 2024 12 months to 31 May 2025
Profit attributable to shareholders (£'000) 8,012 4,398 16,387
Diluted weighted average number of shares 39,640,870 39,759,771 40,265,330
Diluted earnings per share (p) 20.2 11.1 40.7
The reconciliation of the average number of Ordinary Shares used for basic and
diluted earnings per share is as follows:
6 months to 30 November 2025 6 months to 30 November 2024 12 months to 31 May 2025
Weighted average number of shares 37,439,862 38,649,551 38,658,275
Dilutive effect of share options 2,201,008 1,110,220 1,607,055
Diluted average number of shares 39,640,870 39,759,771 40,265,330
6. OTHER INTANGIBLE ASSETS
Game technology £'000 Game developments £'000 Third-party software £'000
IP licences Total
£'000 £'000
Cost
At 31 May 2024 27,740 188,508 3,312 13,024 232,584
Additions 2,498 12,103 204 - 14,805
Disposals - - - (1,915) (1,915)
Exchange rate movement - (143) (1) - (144)
At 30 November 2024 30,238 200,468 3,515 11,109 245,330
Additions 2,526 11,152 72 - 13,750
Disposals - (5,841) - (1) (5,842)
Exchange rate movement - (263) (2) - (265)
At 31 May 2025 32,764 205,516 3,585 11,108 252,973
Additions 2,176 11,119 171 - 13,466
Exchange rate movement - 5 - - 5
At 30 November 2025 34,940 216,640 3,756 11,108 266,444
Amortisation and impairment
At 31 May 2024 19,975 165,066 2,572 9,269 196,882
Amortisation charges 1,788 9,156 237 - 11,181
Exchange rate movement - (102) (1) - (103)
At 30 November 2024 21,763 174,120 2,808 9,269 207,960
Amortisation charges 1,789 6,944 235 - 8,968
Disposals - (5,769) - - (5,769)
Exchange rate movement - (155) (2) - (157)
At 31 May 2025 23,552 175,140 3,041 9,269 211,002
Amortisation charges 2,172 9,001 216 792 12,181
At 30 November 2025 25,724 184,141 3,257 10,061 223,183
Net book value
Net book value at 30 November 2025 9,216 32,499 499 1,047 43,261
Net book value at 31 May 2025 9,212 30,376 544 1,839 41,971
Net book value at 30 November 2024 8,475 26,348 707 1,840 37,370
Net book value at 31 May 2024 7,765 23,442 740 3,755 35,702
7. KEY PERFORMANCE INDICATORS - NON-STATUTORY MEASURES
In addition to measures of financial performance derived from IFRS-reported
results - revenue, operating profit, operating profit margin percentage,
earnings per share, and cash balance - we have published and provided
commentary on financial performance measurements derived from non-statutory
calculations. We believe these supplementary measures, when read in
conjunction with the measures derived directly from statutory financial
reporting, provide a better understanding of our overall financial
performance.
Adjusted Operating Profit
Adjusted Operating Profit measures Frontier's financial performance after
eliminating non-cash development cost accounting adjustments (cost
capitalisation, amortisation charges and impairment charges), non-cash share
charges, non-operating items (including restructuring costs), and after
recording the full benefits of development-related tax and R&D expenditure
credits against the expenditure they relate to. This effectively provides the
cash profit figure that would have been achieved if we expensed all game
development investment as it was incurred, net of those tax and R&D
expenditure credits, rather than capitalising those costs and amortising them
over several years.
6 months to 6 months to 12 months to 31 May 2025
£'000
30 November 2025 30 November 2024
£'000
£'000
Operating profit 7,815 4,543 12,651
Add back non-cash intangible asset amortisation charges for game developments 11,173 10,944 19,677
and game technology
Deduct capitalised investment costs in game developments and game technology (13,296) (14,601) (28,279)
Add back non-cash share-based payment expenses 1,106 1,248 2,368
Adjustment to record the full benefits of tax and R&D expenditure credits 2,916 3,384 6,767
against the expenditure they relate to
Adjustments to tax and R&D expenditure credits of prior periods - - 62
Adjusted Operating Profit 9,714 5,518 13,246
EBITDA
EBITDA, being earnings before interest, tax, depreciation and amortisation, is
commonly used by investors when assessing the financial performance of
companies. It attempts to arrive at a 'cash profit' figure by adjusting
operating profit for non-cash depreciation and amortisation charges. In our
case, EBITDA does not provide a clear picture of our cash profitability, as it
adds back amortisation charges relating to game developments, but without
deducting the investment costs for those developments, resulting in a profit
measure which does not take into account any of the costs associated with
developing games. Since EBITDA is a commonly used financial performance
measure, it has been included below for the benefit of readers of the accounts
who may value that measure of performance.
6 months to 6 months to 12 months to
30 November 2025 30 November 2024 31 May 2025
£'000
£'000
£'000
Operating profit 7,815 4,543 12,651
Depreciation and amortisation 13,652 12,874 23,435
EBITDA 21,467 17,417 36,086
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Copyright 2019 Regulatory News Service, all rights reservedRecent news on Frontier Developments
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