Financial

FY24 Interim Financial Results: For the Period 1 June 2023 to 30 November 2023

30 January 202418 pages2,337 words

Summary

Frontier Developments reported its interim financial results for the first half of fiscal year 2024, covering the six-month period ending November 30, 2023. The findings reveal a period of strategic transition and financial challenge, characterized by a shift back toward the company’s core expertise in Creative Management Simulation (CMS) games following underperformance in other segments. Financial performance during the period saw revenue decline 17% year-over-year to £47.7 million. This downturn was driven by lower-than-expected sales of new releases, specifically F1 Manager 2023 and Warhammer Age of Sigmar: Realms of Ruin. Conversely, the back-catalogue remained resilient, contributing 72% of total revenue, with CMS titles like Jurassic World Evolution 2 and Planet Zoo accounting for over half of all sales. The company reported an adjusted EBITDA loss of £4.9 million and a statutory operating loss of £30.8 million before restructuring, largely due to significant amortisation and impairment charges. In response to these results, an organizational review was initiated to refocus operations on the CMS genre. This strategy includes a planned 20% reduction in annual operating costs and a streamlined development pipeline featuring three new CMS titles scheduled for release between FY25 and FY27. Restructuring efforts, involving a two-phase reduction in headcount, were reported as on-track to return the company to profitability. The outlook for the remainder of FY24 remains cautious but stable, with revenue guidance maintained at £80-95 million. Management confirmed that holiday trading met revised expectations and highlighted upcoming console ports for existing titles. Looking toward FY25, the company expects to release F1 Manager 2024 and a new own-IP CMS game, leveraging its historical success in a genre where its top four titles have collectively generated over £430 million in cumulative revenue.

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