REG - Frontier Developmnts - Interims Results and Trading Update
12/01/2022 07:00
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RNS Number : 1317Y Frontier Developments PLC 12 January 2022
Frontier Developments plc
Interim Results
H1 revenue up 33%. Well positioned for an exciting 2022.
Frontier Developments plc (AIM: FDEV, "Frontier", the "Company"), a leading
developer and publisher of video games based in Cambridge, UK has published
its unaudited interim results for the 6 months to 30 November 2021 ('H1 FY22')
and provides a trading update following the important Holiday season.
Financial Highlights
H1 FY22 H1 FY21 FY21
(6 months to 30 November 2021) (6 months to 30 November 2020) (12 months to 31 May 2021)
Revenue £49.1m £36.9m £90.7m
EBITDA* £14.1m £15.5m £38.1m
Operating Cash Flow** £0.7m £3.1m £12.2m
Operating (Loss)/Profit (£1.3m) £6.9m £19.9m
Operating Margin % (3%) 19% 22%
EPS (basic) (4.2p) 15.0p 55.4p
Net Cash Balance at period end £33.6m £34.9m £42.4m
*Earnings before interest, tax, depreciation and amortisation
** EBITDA excluding non-cash items less investments in game developments and
Frontier's game technology
· Revenue grew 33% over the comparative period to £49.1 million (H1
FY21: £36.9 million) through the release of Jurassic World Evolution 2 in
November 2021 and the ongoing performance of our existing game portfolio
· Gross profit margin of 63% reduced versus the comparative period (H1
FY21: 71%) through a higher proportion of revenue attracting IP licence
royalties (Jurassic World Evolution 2) and console physical discs sales of
Jurassic World Evolution 2 which achieve lower profit margins compared with
digital sales
· The combination of a lower gross profit margin percentage and game
release related marketing costs resulted in a slightly lower EBITDA compared
with the comparative period (£14.1 million in H1 FY22 versus £15.5 million
in H1 FY21) with an operating cash inflow in the period of £0.7 million (H1
FY21: £3.1 million)
· Exceptional non-cash foreign exchange and amortisation charges
resulted in a small operating loss of £1.3 million in the period (H1 FY21:
profit of £6.9 million)
· Net cash balance of £33.6 million at 30 November 2021 (31 May 2021:
£42.4 million). The net cash outflow of £8.8 million in the period was
mainly due to an increase in working capital, with significant net cash
receipts for November sales receivable from channel partners, including for
the launch of Jurassic World Evolution 2, in December 2021 and January 2022
Operational & Strategic Highlights
· Our launch and nurture strategy continues to deliver, through
sustaining and growing our portfolio of genre-leading titles:
o Jurassic World Evolution 2 is the latest successful addition to our
portfolio, already selling nearly 1 million base game units since release in
November 2021
o Planet Coaster, Planet Zoo and Jurassic World Evolution all continue to
entertain existing players whilst attracting new ones, with each title
delivering material contributions to sales throughout calendar 2021
o Elite Dangerous experienced a difficult calendar 2021 following the
disappointing launch of the major Odyssey expansion in May 2021. We continue
to support the game and our passionate players with development updates, and
we have seen an upturn in player sentiment as a result
· Frontier Foundry, our own games label for third-party publishing,
continues to grow with a number of exciting titles in discussion as well as
those already signed. We have at least four titles coming in calendar 2022
including FAR: Changing Tides and Warhammer 40,000: Chaos Gate -
Daemonhunters.
· Our team continues to grow, with over 250 people joining us during
2021, taking us to a total headcount of 745 as at 31 December 2021. Our
amazing people continue to operate positively through the challenges posed by
Coronavirus and, in particular, in adapting so well to remote and hybrid
working during the last 18 months
· We are very well positioned for the future. This calendar year will
see us enter the incredible world of Formula 1 - a truly global sport - with
the first release for our annual F1 management game franchise. Furthermore, it
will see Foundry continuing to build momentum to become a material contributor
to the business, and we will see the release of Universal Picture's hugely
anticipated Jurassic World Dominion film, and the expected corresponding
benefit to Jurassic World Evolution 2
Current Trading and Outlook
December is always an important month for sales in the games industry, and we
were pleased to achieve our highest ever December revenue in 2021, as
expected. Jurassic World Evolution 2 delivered a strong second month of sales
following its release in November 2021, and our existing portfolio of
established titles all provided solid contributions.
We start the calendar year with a great portfolio and an exciting pipeline of
new titles, through both our own internal developments and through Frontier
Foundry, working closely with external partners. We are building valuable
long-term relationships with all of our partners and have some phenomenal
projects in development, which in time will further enrich our portfolio of
great games.
In the remaining five months of the current financial year (to 31 May 2022) we
look forward to delivering two new games from Frontier Foundry, FAR: Changing
Tides (now confirmed for release on 1 March 2022) and Warhammer 40,000: Chaos
Gate - Daemonhunters, whilst supporting our existing portfolio with new
content. Based on current estimates for the remaining period, the Board have
narrowed the revenue guidance range for FY22 to £100 million to £120
million.
Looking a little further ahead, we have exciting plans for FY23 (the 12 months
to 31 May 2023):
· The first of our annual Formula 1® management games will release
during the 2022 F1 season (in FY23), as part of our exclusive licence for
Formula 1® management games
· Jurassic World Evolution 2 is expected to benefit from the release of
the Jurassic World Dominion film in June 2022 (in FY23) and all the
promotional awareness that this film release will bring to the game, with
multiple exciting PDLC packs planned through the year
· Planet Zoo will also benefit from a continuing roadmap of new PDLC
packs
· Frontier Foundry, our games label for 3(rd) party publishing, will
release multiple new titles as it continues to grow
Our Warhammer Age of Sigmar IP real-time strategy game planned for release
during calendar 2023 will now release later in that calendar year, falling in
FY24. This change will further improve the quality and longevity of the game,
and overall make it more successful. As a result of this scheduling
adjustment, the Board have revised the revenue guidance range for FY23 to
£130 million to £160 million, implying 18% to 45% annual growth from the
mid-point of FY22 guidance.
We have excellent prospects for sustainable long-term growth based on the
longevity of our existing portfolio and our future development and publishing
plans, underpinned by our world-class and growing team.
David Braben, Chief Executive, said:
"We have had an unprecedented couple of years because of Coronavirus and the
resulting changes, both positive and negative. We have seen increased sales
and changes to purchasing patterns, the acceleration of the transition towards
interactive entertainment and digital purchasing, and changes to production
that embrace home-working. Although Coronavirus challenges remain, we believe
we now have sound production processes that work in the new hybrid world, as
demonstrated by the on-time and high quality delivery of the excellent
Jurassic World Evolution 2, and this sets us up for future success. Our team
has done a fantastic job adapting to all these challenges and finding new ways
of working. We have the potential for much greater growth in the next few
years as we reap the benefits of all the hard work we have done to adapt to
these changes and capitalise on a great portfolio of existing games together
with the exciting new franchises such as Formula 1® management games and our
Warhammer Age of Sigmar real-time strategy game. We are well set up with a
great portfolio for an exciting future."
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
David Braben, CEO
Alex Bevis,
CFO
Liberum - Nomad and Joint
Broker +44
(0)20 3100 2000
Neil Patel / Cameron Duncan
Jefferies - Joint
Broker +44
(0)20 7029 8000
Max Jones / William Brown
Tulchan
Communications +44
(0)20 7353 4200
Matt Low / Jordan McCulla / Olivia Lucas
About Frontier Developments plc
Frontier is a leading independent developer and publisher of videogames
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. As well as self-publishing internally developed games,
Frontier also publishes games developed by carefully selected partner studios
under its Frontier Foundry games label.
Frontier's LEI number: 213800B9LGPWUAZ9GX18.
www.frontier.co.uk (http://www.frontier.co.uk/)
Interim Results Statement
MAJOR NEW RELEASES
Our biggest new release in the period was our latest multiplatform game,
Jurassic World Evolution 2, which released as planned on 9 November 2021 on PC
via Steam and the Epic Games Store, PlayStation®5, Xbox Series X|S,
PlayStation®4 and Xbox One, with both digital and physical formats available
to PlayStation and Xbox players from day one.
The critical and audience reception from launch has been very positive, thanks
to the hard work of our talented people across our development, publishing and
support teams. Our player community are enjoying the enhancements we have
made, as well as the new content that we have introduced, building on the
strong foundations of Jurassic World Evolution. Game reviews are very good -
the scores compiled by Opencritic show 67 reviews providing a Top Critic
Average score of 78.
Base game sales have reached almost 1 million units after 9 weeks from
release, with strong sales in both November and December. Sales rates as we
start calendar 2022 are encouraging.
PDLC is an important element of the post-launch strategy for Jurassic World
Evolution 2 as part of Frontier's proven launch and nurture approach to game
development and publication. Two well-received PDLC packs have been released
to date, with the Deluxe Upgrade pack available at release and the Early
Cretaceous Pack launching a month later on 9 December 2021. Multiple exciting
PDLC packs are planned for 2022.
Significant sales of both the base game and PDLC are expected from June 2022
when the Jurassic World Dominion film releases.
REVENUE
Total revenue in H1 FY21 grew to £49.1 million, 33% ahead of the comparative
period (H1 FY21: £36.9 million). Jurassic World Evolution 2 was the main
catalyst for growth, launching in the final month of the period. Planet Zoo
also delivered growth over the comparative period, with revenue growing 14%
through sales of new and existing PDLC as well as sales of the base game.
Planet Coaster and Jurassic World Evolution delivered solid sales performances
during H1 FY22 against a tough comparative period which included major new
platform releases for each title: in November 2020 Planet Coaster expanded
onto Xbox Series X|S, Xbox One, PlayStation 4 and PlayStation 5, and Jurassic
World Evolution released on Nintendo Switch. The overall sales performance of
Elite Dangerous in the period was below expectations following the
disappointing launch of Elite Dangerous: Odyssey in May 2021. Frontier
Foundry, our games label for 3(rd) party publishing, launched innovative
strategic shooter Lemnis Gate during the period, with more material revenues
expected in the second half of the financial year from FAR: Changing Tides,
now confirmed for release on 1 March 2022, and Warhammer 40,000: Chaos Gate -
Daemonhunters.
PROFITABILITY
Gross profit of £30.8 million was recorded in the period (H1 FY21: £26.2
million) with gross profit margin at 63% (H1 FY21: 71%). The lower percentage
margin resulted from a higher proportion of revenue attracting IP licence
royalties (Jurassic World Evolution 2) and console physical discs sales of
Jurassic World Evolution 2 which achieve lower profit margins compared with
digital sales.
Gross research and development expenses in the period increased by 41% to
£22.2 million (H1 FY21: £15.8 million). The growth resulted from a
continued growth in headcount to support Frontier's development plans, an
increase in outsourced activity and investments in Frontier Foundry partner
developments.
Capitalisation of development costs on game developments and game technology
accounted for £15.8 million in the six months to 30 November 2021 (H1 FY21:
£13.1 million). The percentage of gross research and development costs
which were capitalised in the period was 71%, lower than the 83% recorded for
H1 FY21 as more development staff were working on free updates (as opposed to
chargeable content) during the recent period, notably the ongoing post-release
support for Elite Dangerous: Odyssey. Frontier's normal expectations for
capitalisation is 70-90% of gross development spending.
R&D amortisation charges related to previously capitalised development
costs grew 73% to £12.2 million (H1 FY21: £7.0 million). Charges in H1
FY22 included a full six months of amortisation for major expansion Elite
Dangerous: Odyssey and one month for Jurassic World Evolution 2, as well as an
accelerated amortisation charge for Lemnis Gate following its relatively low
sales performance at release.
Net research and development expenses recorded in the income statement in the
period grew 91% to £18.6 million (H1 FY21: £9.7 million), being gross spend
of £22.2 million, less capitalised costs of £15.8 million, plus amortisation
charges of £12.2 million.
Sales and marketing expenses in the period were £7.5 million (H1 FY21: £3.4
million) with the largest element of the increase from the launch of Jurassic
World Evolution 2. Administrative expenses were £6.0 million in the period
(H1 FY21: £6.1 million).
Exceptional non-cash foreign exchange and amortisation charges, together with
a lower gross profit margin percentage, higher net R&D expenses (including
some one-off items) and game release related marketing costs resulted in a
small operating loss of £1.3 million in the period (H1 FY21: profit of £6.9
million).
A net zero corporation tax charge was recorded in the income statement for the
period (H1 FY21: £0.6 million), since for the full financial year enhanced
deductions from the Video Game Tax Relief scheme are expected to offset tax
charges on profits. The Group expects to provide additional corporation tax
disclosures in the FY22 financial statements.
A loss after tax of £1.7 million was recorded in the period (H1 FY21: profit
of £5.8 million). Basic earnings per share was a loss of 4.2 pence (H1
FY21: profit of 15.0 pence).
BALANCE SHEET AND CASH FLOW
The Company continues to benefit from a strong balance sheet, with cash
balances of £33.6 million at 30 November 2021 (31 May 2021: £42.4 million;
30 November 2020: £34.9 million). The majority of the £8.8 million
reduction in cash during the period was due to an increase in net working
capital at the end of the period related to the release of Jurassic World
Evolution 2. Trade and other receivables grew by £14.1 to £27.8 million at
30 November 2021 (31 May 2021: £13.7 million), with trade and other payables
increasing by £5.4 million to £20.2 million (31 May 2021: £14.8 million).
This working capital increase is expected to unwind during the second half of
the financial year.
Although cash balances reduced in the period, Frontier recorded an overall
operating cash inflow of £0.7 million in the period (H1 FY21: £3.1 million),
defined as EBITDA excluding non-cash items less investments in game
developments and Frontier's game technology.
CONSOLIDATED INCOME STATEMENT
Notes 6 months to 6 months to 12 months to 31 May 2020
£'000
30 November 2021 30 November 2020
£'000
£'000
Revenue 6 49,116 36,907 90,688
Cost of sales (18,326) (10,747) (27,538)
Gross profit 30,790 26,160 63,150
Research and development expenses (18,593) (9,717) (22,025)
Sales and marketing expenses (7,503) (3,432) (7,269)
Administrative expenses (6,037) (6,133) (13,940)
Operating (loss)/profit (1,343) 6,878 19,916
Finance costs (310) (423) (731)
(Loss)/Profit before tax (1,653) 6,455 19,185
Income tax - (646) 2,373
(Loss)/Profit for the period attributable to shareholders (1,653) 5,809 21,558
Earnings per share
Basic earnings per share 7 (4.2p) 15.0 55.4
Diluted earnings per share 7 (4.2p) 14.4 53.3
All the activities of the Group are classified as continuing
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months to 6 months to 12 months to
30 November 2021 30 November 2020 31 May 2021
£'000 £'000 £'000
(Loss)/Profit for the period (1,653) 5,809 21,558
Other comprehensive income:
Exchange differences on translation of foreign operations (12) 13 23
Total comprehensive (loss)/income for the period attributable to the equity (1,665) 5,822 21,581
holders of the parent
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 NOVEMBER 2021
(REGISTERED COMPANY NO: 02892559)
Notes 30 November 2021 30 November 2020 31 May 2021
£'000
£'000
£'000
Non-current assets
Intangible assets 8 73,508 58,940 71,318
Property, plant and equipment 9 6,967 5,854 6,078
Right-of-use asset 20,296 21,920 21,108
Deferred tax asset 384 6,175 384
101,155 92,889 98,888
Current assets
Trade and other receivables 27,845 14,979 13,741
Current tax asset 2,511 2,377 6,468
Cash and cash equivalents 33,561 34,892 42,423
63,917 52,248 62,632
Total assets 165,072 145,137 161,520
Current liabilities
Trade and other payables (20,167) (11,940) (14,768)
Lease liability (1,440) (1,337) (1,419)
Deferred income (1,327) (1,972) (2,180)
Current tax liabilities - (684) -
(22,934) (15,933) (18,367)
Net current assets 40,983 36,315 44,265
Non-current liabilities
Provisions (49) (34) (41)
Lease liability (20,008) (21,530) (20,739)
Deferred income - (230) -
Other payables (8,825) (7,184) (9,219)
Deferred tax liabilities - (4,038) -
(28,882) (33,016) (29,999)
Total liabilities (51,816) (48,949) (48,366)
Net assets 113,256 96,188 113,154
Equity
Share capital 10 197 196 197
Share premium account 36,368 35,772 36,079
Equity reserve (8,635) (9,529) (9,351)
Foreign exchange reserve (11) (9) 1
Retained earnings 85,337 69,758 86,228
Total equity 113,256 96,188 113,154
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Capital £'000 Share premium account £'000 Equity reserve £'000 Foreign exchange reserve £'000 Retained earnings £'000 Total equity £'000
At 31 May 2020 195 34,589 (925) (22) 62,897 96,734
Profit for the period - - - - 5,809 5,809
Other comprehensive income:
Exchange differences on translation of foreign operations - - - 13 - 13
Total comprehensive income for the period - - - 13 5,809 5,822
Issue of share capital net of expenses 1 1,183 - - - 1,184
Share-based payment charges - - 1,045 - - 1,045
Share-based payment transfer relating to option exercises and lapses - - (1,052) - 1,052 -
EBT cash outflows from share purchases - - (10,000) - - (10,000)
EBT net cash inflows from option exercises - - 1,403 - - 1,403
At 30 November 2020 196 35,772 (9,529) (9) 69,758 96,188
Profit for the period - - - - 15,749 15,749
Other comprehensive income:
Exchange differences on translation of foreign operations - - - 10 - 10
Total comprehensive income for the period - - - 10 15,749 15,759
Issue of share capital net of expenses 1 307 - - - 308
Share-based payment charges - - 1,110 - - 1,110
Share-based payment transfer relating to option exercises and lapses - - (718) - 718 -
EBT cash outflows from share purchases - - - - - -
EBT net cash inflows from option exercises - - (214) - - (214)
Deferred tax movements posted directly to reserves - - - - 3 3
At 31 May 2021 197 36,079 (9,351) 1 86,228 113,154
(Loss)/Profit for the period - - - - (1,653) (1,653)
Other comprehensive income:
Exchange differences on translation of foreign operations - - - (12) - (12)
Total comprehensive loss for the period - - - (12) (1,653) (1,665)
Issue of share capital net of expenses - 289 - - - 289
Share-based payment charges - - 1,175 - - 1,175
Share-based payment transfer relating to option exercises and lapses - - (762) - 762 -
EBT cash outflows from share purchases - - - - - -
EBT net cash inflows from option exercises - - 303 - - 303
At 30 November 2021 197 36,368 (8,635) (11) 85,337 113,256
CONSOLIDATED STATEMENT OF CASHFLOWS
6 months to 6 months to 12 months to 31 May 2021
£'000
30 November 2021 30 November 2020
£'000
£'000
Cash generated from operations 5,368 11,597 38,916
Taxes received 3,957 38 38
Cashflow from operating activities 9,325 11,635 38,954
Investing activities
Purchase of property, plant and equipment (1,779) (488) (1,375)
Expenditure on intangible assets (15,969) (13,515) (31,502)
Interest received 14 27 48
Cashflow from investing activities (17,734) (13,976) (32,829)
Financing activities
Proceeds from issue of share capital 289 1,184 1,492
Employee Benefit Trust cash outflows from share purchases - (10,000) (10,000)
Employee Benefit Trust cash inflows from option exercises 303 1,403 1,189
Payment of principal element of lease liabilities (709) (669) (1,377)
Payment of interest element of lease liabilities (325) (365) (691)
Interest paid - (88) (88)
Cashflow from financing activities (442) (8,535) (9,475)
Net change in cash and cash equivalents from continuing operations (8,851) (10,876) (3,350)
Cash and cash equivalents at beginning of period 42,423 45,751 45,751
Exchange differences on cash and cash equivalents (11) 17 22
Cash and cash equivalents at end of period 33,561 34,892 42,423
The accompanying notes form part of this financial information.
Reconciliation of operating profit to cash generated from operations
6 months to 6 months to 12 months to 31 May 2021
£'000
30 November 2021 30 November 2020
£'000
£'000
Operating (loss)/profit (1,343) 6,878 19,916
Depreciation and amortisation 15,481 8,616 18,167
EBITDA 14,138 15,494 38,083
Movement in unrealised exchange (gains)/losses on forward contracts 1,224 (298) (223)
Share-based payment expenses 1,175 1,045 2,155
Operating cashflow before movements in working capital 16,537 16,241 40,015
Net changes in working capital:
Change in trade and other receivables (14,105) (2,397) (1,233)
Change in trade and other payables 2,929 (2,254) 119
Change in provisions 7 7 15
Cash generated from operations 5,368 11,597 38,916
NOTES TO THE FINANCIAL INFORMATION
1. CORPORATE INFORMATION
Frontier Developments plc (the 'Company') along with its subsidiaries
(together the 'Group') 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, registered number 02892559. The address of its registered
office is 26 Science Park, Milton Road, Cambridge CB4 0FP. The Group's
operations are based in the UK 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 2021.
Statutory accounts for the year ended 31 May 2021 were approved by the Board
of Directors on 8 September 2021 and delivered to the Registrar of Companies.
The Auditors 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 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 has adequate
resources to continue in operational existence for the foreseeable future, a
period of not less than 12 months from the date of approval of these financial
statements. The Group therefore continues to adopt the going concern basis in
preparing its financial statements.
Impact of COVID-19 on going concern
The Board continuously monitor the performance of the Groups operational
activities and the expected future prospects. As well as reviewing the current
market trends and a number of downside scenarios, including any mitigations,
the Board have assessed the ability to continue as a going concern during the
pandemic. The results of this assessment is that the Group would be able to
withstand significant changes in trading behaviour and still be able to
continue operationally.
The Group benefits from a strong cash position, continued demand for products
and no negative impacts on debtor recoverability. Therefore the Board are
satisfied that the financial statements are prepared under the going concern
basis.
3. ACCOUNTING POLICIES
Except for the application for UK-adopted international accounting standards,
for which there are no material differences from International Financial
Reporting Standards as issued by the IASB and adopted by the EU when applied
to the Group, 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 2021.
4. ACCOUNTING ESTIMATES AND KEY JUDGEMENTS
When preparing the 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 2021.
5. SIGNIFICANT EVENTS AND TRANSACTIONS
There were no significant events or transactions in the interim period (1 June
2021 to 30 November 2021) which were not included within the interim financial
statements. There have been no significant events or transactions during the
period from the end of the interim period to the day preceding the date of
this report (1 December 2021 to 11 January 2022).
6. SEGMENT INFORMATION
The Group identifies operating segments based on internal management reporting
that is regularly reviewed by the chief operating decision maker and reported
to the Board. The chief operating decision maker is the Chief Executive
Officer.
Management information is reported as one operating segment, being revenue
from self-published and publishing franchises and other revenue streams such
as royalties and licensing.
The Group does not provide any information on the geographical location of
sales as the majority of revenue is through third-party distribution platforms
which are responsible for the sales data of consumers. The cost to develop
this information internally would be excessive.
All of the Group's non-current assets are held within the UK.
All material revenue is categorised as either publishing revenue or other
revenue. Other revenue mainly related to royalty income.
The Group typically satisfies its performance obligations at the point that
the product becomes available to the customer and payment has been received up
front.
6 months to 6 months to 12 months to
30 November 2021 30 November 2020 31 May 2021
£'000
£'000
£'000
Publishing revenue 49,016 36,818 90,471
Other revenue 100 89 217
49,116 36,907 90,688
7. 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.
6 months to 6 months to 12 months to
30 November 2021 30 November 2020 31 May 2021
Profit attributable to shareholders (£'000) (1,653) 5,809 21,558
Weighted average number of shares 39,162,921 38,779,241 38,909,932
Basic earnings per share (pence) (4.2) 15.0 55.4
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 as adjusted for
the dilutive effect of share options.
6 months to 6 months to 12 months to
30 November 2021 30 November 2020 31 May 2021
Profit attributable to shareholders (£'000) (1,653) 5,809 21,558
Diluted weighted average number of shares 39,162,921 40,469,204 40,471,633
Diluted earnings per share (pence) (4.2) 14.4 53.3
The reconciliation of average number of Ordinary Shares used for basic and
diluted earnings per share is as follows:
6 months to 6 months to 12 months to
30 November 2021 30 November 2020 31 May 2021
Weighted average number of shares 39,162,921 38,779,241 38,909,932
Dilutive effect of share options - 1,689,963 1,561,701
Diluted average number of shares 39,162,921 40,469,204 40,471,633
The dilutive effect of share options is nil for the 6 months to 30 November
2021 because a loss was recorded for that period.
8. INTANGIBLE ASSETS
Game technology Game developments Third-party software IP licences Total
£'000 £'000 £'000 £'000 £'000
Cost
At 31 May 2020 9,158 72,328 1,093 10,824 93,403
Additions 1,529 11,602 384 - 13,515
Transfers - (347) 347 - -
At 30 November 2020 10,687 83,583 1,824 10,824 106,918
Additions 6,322 13,536 236 361 20,455
At 31 May 2021 17,009 97,119 2,060 11,185 127,373
Additions 1,254 14,557 158 - 15,969
At 30 November 2021 18,263 111,676 2,218 11,185 143,342
Amortisation
At 31 May 2020 5,589 33,007 803 1,336 40,735
Amortisation charges 699 6,350 194 - 7,243
At 30 November 2020 6,288 39,357 997 1,336 47,978
Amortisation charges 770 7,077 230 - 8,077
At 31 May 2021 7,058 46,434 1,227 1,336 56,055
Amortisation charges 1,058 11,115 229 1,377 13,779
At 30 November 2021 8,116 57,549 1,456 2,713 69,834
Net Book Value
Net book value at 30 November 2021 10,147 54,127 762 8,472 73,508
Net book value at 31 May 2021 9,951 50,685 833 9,849 71,318
Net book value at 30 November 2020 4,399 44,226 827 9,488 58,940
Net book value at 31 May 2020 3,569 39,321 290 9,488 52,668
9. TANGIBLE ASSETS
Fixtures and Fittings Computer Equipment Leasehold Improvements Total
£'000 £'000 £'000 £'000
Cost
At 31 May 2020 863 2,781 5,358 9,002
Additions - 488 - 488
At 30 November 2020 863 3,269 5,358 9,490
Additions - 887 - 887
At 31 May 2021 863 4,156 5,358 10,377
Additions - 1,779 - 1,779
At 30 November 2021 863 5,935 5,358 12,156
Depreciation
At 31 May 2020 396 1,999 681 3,076
Charge for the period 75 318 167 560
At 30 November 2020 471 2,317 848 3,636
Charge for the period 75 420 168 663
At 31 May 2021 546 2,737 1,016 4,299
Charge for the period 75 648 167 890
At 30 November 2021 621 3,385 1,183 5,189
Net Book Value
Net book value at 30 November 2021 242 2,550 4,175 6,967
Net book value at 31 May 2021 317 1,419 4,342 6,078
Net book value at 30 November 2020 392 952 4,510 5,854
Net book value at 31 May 2020 467 782 4,677 5,926
10. SHARE CAPITAL
Number Nominal Value £
At 1 June 2020 38,911,810 194,559
Shares issued on option exercises and warrants 377,047 1,885
At 30 November 2020 39,288,857 196,444
Shares issued on option exercises and warrants 54,747 274
At 31 May 2021 39,343,604 196,718
Shares issued on option exercises and warrants 49,651 248
At 30 November 2021 39,393,255 196,966
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