Jurassic spark: Frontier eyes exciting next few years despite share price shock
Frontier Developments’ UK share price took a beating despite a solid set of H1 results and an upbeat report from Dave Braben, founder and CEO of the world-class video games developer.
A quarter of the Cambridge company’s share price was chipped away despite first-half revenue to November 30 being 33 per cent ahead and Braben saying Frontier was well positioned for an exciting 2022 having settled on a productive method of hybrid working.
Some observers blamed profit taking by shareholders sick of heavy losses from other companies quoted elsewhere on the stock market.
Frontier H1 revenues were up to £49.1 million year-on-year from £36.9m last time. The company did record a small operating loss of £1.3m against a profit of £6.9m last time and £19.9m in the full year to May 31, 2021.
That doesn’t account for the impact of Covid in 2021 and a switch in working practices which often hampers video games production.
Frontier still has net cash of £33.6m compared to £34.9m in H1 2020 as a result of tight management of costs and working practices.
And the team continues to grow, with over 250 people joining the company during 2021, taking total headcount to 745 at December 31.
Braben said Frontier was very well positioned for the future. This calendar year will see the company enter the incredible world of Formula 1 with the first release for its annual F1 management game franchise.
It will also see Foundry continuing to build momentum to become a material contributor to the business and Frontier will see the release of Universal Picture's hugely anticipated Jurassic World Dominion film and the expected corresponding benefit to Jurassic World Evolution 2.
Braben said: “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 our partners and have some phenomenal projects in development, which in time will further enrich our portfolio of great games.
“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.”
• Image courtesy – Frontier Developments Plc