Annual Report and Accounts 2019: Frontier Developments

Key insights

6 takeaways

01
Frontier Developments achieved record financial results in fiscal year 2019, with revenue increasing by over 160% to £89.7 million and operating profit reaching £19.4 million.See it on page 24
02
Financial growth was primarily driven by the launch of Jurassic World Evolution and the continued performance of established titles Elite Dangerous and Planet Coaster.See it on page 24
03
The company maintains a strong balance sheet with £35.3 million in net cash and total net assets of £71.7 million.See it on page 65
04
Management is scaling operations to support a consistent release cadence of one major title every 12 months, supported by a £21.2 million investment in research and development.See it on page 10
05
The business model has transitioned to a self-publishing structure while integrating third-party partnerships, such as the collaboration with Haemimont Games.See it on page 8
06
The company utilizes its proprietary COBRA technology and a repeatable development framework to target underserved simulation genres.See it on page 13

Summary

Frontier Developments achieved a period of transformative financial growth during the 2019 fiscal year, characterized by a shift toward a self-publishing model that yielded record-breaking results. Revenue surged by over 160% to £89.7 million, while operating profit climbed to £19.4 million. This performance was primarily driven by the successful launch of Jurassic World Evolution and the sustained commercial viability of established franchises, including Elite Dangerous and Planet Coaster. By leveraging its proprietary COBRA technology and a repeatable development framework, the company successfully targeted underserved simulation genres, securing a robust financial foundation with £35.3 million in net cash and net assets totaling £71.7 million.

To maintain this momentum, the company is scaling its operations with the goal of achieving a consistent cadence of one major release every 12 months. This strategy involves a balanced portfolio approach that integrates owned intellectual property with strategic third-party publishing initiatives, such as the partnership with Haemimont Games. Furthermore, the company continues to invest heavily in research and development, with expenditures rising to £21.2 million, while simultaneously navigating the operational complexities of talent acquisition and the transition to a multi-franchise, self-publishing structure.

The company operates under a rigorous governance framework, adhering to the QCA Corporate Governance Code to ensure strategic alignment and effective risk management. Financial oversight is supported by independent audits, which confirmed the accuracy of the company’s accounting practices regarding the capitalization of development costs and intangible assets. With a focus on long-term shareholder value, the organization remains committed to performance-based incentives and prudent working capital management. As it looks toward future growth, the company is well-positioned to leverage its strong liquidity and internal cash flows to explore further acquisitions and partnerships within the global digital games market.