Tuesday, May 7, 2024 9:25am
Cambridge-based video game publisher Frontier Developments raised its full-year profit outlook after reporting strong sales and lower operating costs across its portfolio as it aims to recover from a difficult 2023.
The AIM-listed company said in a trading update on Tuesday that its portfolio had “performed well” last month “with pleasing contributions from all games”.
This highlighted the strong performance of creative management simulation titles, boosted by the Frontier Publisher Sale held on PC storefront Steam from April 1st to 15th.
The company added that the console version of Planet Zoo continued to sell well after its release in March.
Frontier said it expected revenues of at least £85m for the financial year ending May 31, 2024. It added that it expects adjusted profit before tax (EBITDA) to be better than the previously expected loss of more than £5m.
The company is banking on higher gross margins from a larger share of its own IP revenue, lower operating costs after an “organizational review,” and gains from the $7 million sale of Roller Coaster Tycoon 3 publishing rights to Atari last month. I decided to upgrade for this reason. .
Frontier stock has more than doubled since the beginning of the year, but is still down 55% from its peak in July of last year. Last October, the company announced it would lay off a number of employees as part of a review of its operations aimed at cutting costs by up to 20%.
In November, the company took another hit when its then-new Warhammer Age of Sigmar: Realms of Ruin underperformed expectations during the crucial Black Friday period. Frontier subsequently revised down its full-year sales forecast by up to 20%.
Chief Executive Officer Johnny Watts said on Tuesday: “Following a strategic reset during 2023, we are making strong progress and would like to thank our employees for their support during difficult times in Frontier's 30-year history.” We look to the future with confidence. ”
Frontier stock was up 6% on Tuesday morning.
