REG - Frontier Developmnts - FY25 Update – Strong Results & Increased Momentum

Frontier DevelopmentsAnnouncement

11/06/2025 07:00

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RNS Number : 2860M  Frontier Developments PLC  11 June 2025

11 June 2025

Frontier Developments plc

 FY25 Trading Update - Strong Results and Increased Momentum

Frontier Developments plc (AIM: FDEV, 'Frontier', the 'Company' or the
'Group'), a leading developer and publisher of video games based
in Cambridge, UK, provides an update on trading for the financial year ended
31 May 2025 ('FY25'), including provisional unaudited financial results.

FY25 Financial Headlines

·    Revenue increased to £90.6 million (FY24: £89.3 million), with
revenue from Frontier's genre-leading Creative Management Simulation (CMS)
games growing 25% year-on-year.

·    The three CMS game franchises - Planet Coaster, Planet Zoo and
Jurassic World Evolution - together generated 77% of total revenue in FY25
(FY24: 62%).

·    Profitability grew significantly, with Adjusted EBITDA* expected to
be in the range of £8 million to £9 million (FY24: £0.9 million) through
higher revenue, a higher gross margin percentage, a lower operating cost base,
and a £3.5 million gain on the sale of the publishing rights for a Foundry
game (Stranded: Alien Dawn).

·    Cash grew by £13.0 million to £42.5 million at 31 May 2025 (31 May
2024: £29.5 million), reflecting trading performance, tax credits and the
sale of publishing rights.

·    A share buyback programme of up to £10 million will be initiated,
subject to shareholder approval, to enhance shareholder value.

FY25 Franchise Headlines

·    Planet Coaster franchise revenue grew by almost 200% year-on-year
through the release of Planet Coaster 2 in November 2024 on PC, PlayStation 5
and Xbox Series X|S.

·    Planet Zoo franchise revenue grew by 2%, building on the release of
Planet Zoo: Console Edition in March 2024, with new content in the year for
both console and PC players.

·    Jurassic World Evolution franchise revenue sustained at 96% of the
prior year level, as we prepare the franchise for its next big step with the
development of Jurassic World Evolution 3.

·    Elite Dangerous revenue grew by 76% year-on-year through new content
and player engagement.

Outlook

·    The third exciting instalment in the Jurassic World Evolution game
franchise, Jurassic World Evolution 3, will be released on 21 October 2025.

·    Having achieved growth in revenue, profit and cash in FY25, the Board
is confident in Frontier's ability to deliver further annual growth in FY26
through nurturing and expanding our genre-leading game franchises.

* Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation
and impairment charges related to game developments and game technology, less
investments in game developments and game technology, and excluding
restructuring costs, share-based payment charges and other non-cash items.

 

Capital allocation and share buyback

Frontier has a strong balance sheet and continues to generate cash, having
ended FY25 with cash of £42.5 million. The Board is confident in the future
cash position of the Group, and that this can adequately fund future growth
plans, which remains the Group's core capital allocation priority. The Board
continuously reviews shareholder return opportunities and its capital
allocation policy.

After considering the Company's balance sheet position and prevailing share
price, the Board believes that it would be beneficial to return capital to
shareholders through a share buyback. Accordingly, the Company intends to
execute a share buyback of up to £10 million, the initiation of which is
subject to shareholder approval of a Waiver under Rule 9 of the City Code on
Takeovers and Mergers at a general meeting to be held on 27 June 2025, details
of which are contained in the circular and notice of general meeting to be
sent to shareholders today and available at
https://www.frontier.co.uk/company/share-buyback
(https://www.frontier.co.uk/company/share-buyback) . Further details on the
proposed buyback will be announced in due course.

Executive Board

To build on the momentum in the business and to support Frontier's next phase
of development, an Executive Board has been established with effect from this
month to further drive operational efficiency and streamline effective
decision-making. Reporting directly to the Company's Board of Directors, the
Executive Board includes the senior leaders from Development, Publishing,
People, Operations, Finance and Legal, as well as the Chief Executive Officer,
Jonny Watts. The Chief Operating Officer, James Dixon, will chair and
supervise the new Executive Board. As a result of this, and his increased
focus on Frontier's operating performance, James has stepped down from the
Company's Board of Directors effective today.

Change of Financial KPI

From FY26, Frontier intends to switch from reporting Adjusted EBITDA* to a new
measure of financial performance, Adjusted Operating Profit**. This change
will provide a more accurate representation of the business' performance and
more closely reflect cash generation, including the recognition of regular
video game tax credits and reliefs. Adjusted Operating Profit** in FY25,
including the £3.5 million gain on the sale of publishing rights, is expected
to be in the range of £11 million to £12 million (FY24: £4.1 million).

* Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation
and impairment charges related to game developments and game technology, less
investments in game developments and game technology, and excluding
restructuring costs, share-based payment charges and other non-cash items.

** 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 credits and reliefs against the expenditure
they relate to.

 

Jonny Watts, Frontier's CEO, said:

"Our strategy to refocus on Creative Management Simulation (CMS) games is
delivering, with almost 80% of revenue coming from our three genre-leading CMS
game franchises: Planet Coaster, Planet Zoo and Jurassic World Evolution.
These results have been achieved through the hard work of our teams.

We begin the new financial year with renewed confidence, a portfolio of games
that continues to deliver, and an exciting roadmap of future games and
content. Our next big release will be Jurassic World Evolution 3, where we
intend to delight players with brand new creative tools and highly
sought-after breeding and juvenile dinosaurs."

 

Enquiries:

Frontier
Developments
+44 (0)1223 394 300

Jonny Watts, 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

Max Jones / Nikhil Varghese

 

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
video game consoles.

Frontier's LEI number: 213800B9LGPWUAZ9GX18.

www.frontier.co.uk (http://www.frontier.co.uk/)

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