Frontier Developments plc: Half Yearly Results 2016

Key insights

7 takeaways

01
Frontier Developments' revenue rose 50% to £10.9 million in the six months to 30 November 2015, up from £7.3 million a year earlier.See it on page 1
02
The company swung to a £0.4 million profit from a £1.9 million loss in the prior-year period, while EBITDA rose to £2.1 million from £0.5 million.See it on page 1
03
Elite Dangerous drove the growth, reaching 1.2 million units sold by end-November 2015 and 1.4 million by end-December.See it on page 1
04
Frontier ended the period with a net cash position of £8.6 million.See it on page 1
05
The strategy is to move away from third-party publishing and focus on internal projects built on its proprietary COBRA technology, as it transitions to a self-publishing model.See it on page 1
06
Planet Coaster is the main investment, using half of the company's development staff, and is due for release in Q4 2016. It would give Frontier two major self-published franchises.See it on page 1
07
Frontier has formed new partnerships with Microsoft and Amazon to extend its reach across consoles, computers and mobile platforms.See it on page 1

Summary

Frontier Developments plc achieved a significant financial turnaround during the six-month period ending 30 November 2015, marking a successful progression in its transition toward a self-publishing business model. The company reported a 50 percent increase in recognized revenue, reaching £10.9 million compared to £7.3 million in the same period the previous year. This growth was bolstered by the continued commercial success of the Elite Dangerous franchise, which reached 1.2 million units sold by the end of November 2015 and 1.4 million by the end of December.

The financial results reflect a shift toward profitability, with the company recording a profit of £0.4 million for the half-year, a notable improvement over the £1.9 million loss reported in the prior year. EBITDA rose to £2.1 million from £0.5 million, while the company maintained a solid net cash position of £8.6 million. These figures underscore the effectiveness of the group’s strategic pivot, which involves moving away from third-party publishing to focus exclusively on internal projects supported by proprietary COBRA technology.

Operational focus remains heavily concentrated on the development of the upcoming franchise Planet Coaster, which currently utilizes half of the company’s development staff. This investment phase is expected to conclude with the title's release in the fourth quarter of 2016, at which point the company anticipates generating revenue from two major self-published franchises. To further expand its market reach, the group has established new partnerships with industry leaders including Microsoft and Amazon. These developments position the Cambridge-based developer to leverage its independent status across consoles, computers, and mobile platforms as it completes its transition into a dual-franchise publisher.