FinancialFrontier Developments
FY23 Financial Results: Frontier Developments
29 pages~72 min full read
Key insights
7 takeaways · ~3 min read- 01Frontier Developments reported a significant financial downturn in FY23 (ending May 31, 2023), with revenue decreasing to £104.6 million from £114.0 million in FY22, and an operating loss of £26.6 million compared to a £1.5 million profit in FY22.See it on page 1
- 02The company's Adjusted EBITDA shifted from a £6.7 million profit in FY22 to a £4.6 million loss in FY23, primarily due to lower revenues and increased investment in future game titles.See it on page 1
- 03A major factor contributing to the operating loss was £28.7 million in non-cash intangible asset impairment and accelerated amortisation charges, resulting from the closure of the Foundry publishing label and a re-assessment of the F1® Manager franchise's future performance.See it on page 1
- 04Sales of F1® Manager 2022 were below original expectations, and F1® Manager 2023's initial sales in July 2023 also underperformed compared to its predecessor, leading to a £15.0 million impairment charge against the franchise's intangible assets.See it on page 9
- 05Frontier has ceased acquiring new third-party titles for its Foundry label, refocusing all efforts on its internally developed game portfolio.See it on page 9
- 06Despite current challenges, the company expects to meet FY24 market expectations, with consensus revenue at £108 million and an Adjusted EBITDA loss of £9 million, supported by existing portfolio performance and upcoming releases like Warhammer Age of Sigmar: Realms of Ruin in November 2023.See it on page 2
- 07Frontier benefits from UK tax incentive schemes, including Video Games Tax Relief (VGTR), R&D tax credits, and Patent Box, which help reduce taxable profits and provide future cash tax benefits.See it on page 11
Summary
Frontier Developments plc (AIM: FDEV, ‘Frontier’, the ‘Company’, or the ‘Group’), a leading developer and publisher of video games based in Cambridge, UK, publishes its full-year results for the 12 months ended 31 May 2023 (‘FY23’). This announcement contains inside information.
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