TIDMFDEV
RNS Number : 7841N
Frontier Developments PLC
03 February 2021
Frontier Developments plc
Interim Results
Game portfolio, player base and profitability continue to
grow
Frontier Developments plc (AIM: FDEV, "Frontier", the "Company")
, a leading developer and publisher of video games based in
Cambridge, UK has published its interim results for the 6 months to
30 November 2020 ('H1 FY21').
Financial Highlights
H1 FY21 H1 FY20 FY20
(6 months to (6 months (12 months
30 November 2020) to 30 November to 31 May
2019) 2020)
Revenue GBP36.9m GBP32.0m GBP76.1m
------------------- ----------------- ------------
Operating Profit GBP6.9m GBP4.5m GBP16.6m
------------------- ----------------- ------------
Operating Margin % 19% 14% 22%
------------------- ----------------- ------------
EBITDA* GBP15.5m GBP10.9m GBP31.5m
------------------- ----------------- ------------
EPS (basic) 15.0p 9.4p 41.3p
------------------- ----------------- ------------
Operating Cash Flow** GBP3.1m GBP1.9m GBP13.6m
------------------- ----------------- ------------
Net Cash Balance at GBP34.9m GBP28.9m GBP45.8m
period end
------------------- ----------------- ------------
*Earnings before interest, tax, depreciation and
amortisation
** EBITDA excluding non-cash items less investments in game
developments and game technology
-- The ongoing performance of all existing titles, combined with
initial contributions from new platform launches, delivered H1 on
H1 revenue growth of 15%
-- Gross profit margin grew to 71% (H1 FY20: 67%) with operating
profit margin increasing to 19% (H1 FY20: 14%) through lower
average distribution costs, including lower digital store
commission rates on some services, and a greater proportion of
revenue from own-IP titles versus licenced IP titles
-- Net cash balance of GBP34.9m at 30 November 2020 (31 May
2020: GBP45.8m) reflecting GBP10m of share purchases into the
Employee Benefit Trust in September 2020, and ongoing investments
in internal development projects and Frontier Foundry titles
Operational & Strategic Highlights
-- Player numbers for all titles continue to expand strongly,
through active player-community management, additional free and
chargeable content, price promotions and expansions onto new
platforms and channels:
o Planet Zoo , which released in November 2019, has achieved
record performance on PC in its first 15 months, surpassing 1.5
million base game units sold. Paid content packs including the
Arctic, South America, Australia, and Aquatic packs have proved to
be popular, as expected
o Planet Coaster: Console Edition released successfully in
November 2020 on all current and next generation PlayStation and
Xbox consoles following its success on PC for over 4 years, pushing
total sales across all platforms above 3 million base game
units
o Jurassic World Evolution expanded onto the Nintendo Switch in
November 2020, which has helped to move total sales above the 4
million threshold for base game units sold across all platforms
o Elite Dangerous has also passed 4 million base game units sold
having achieved new all-time active player number records several
times this financial year, with total base game owners now at 12
million following the Epic Games Store 'Free Week' in November
2020. The PC release of a major new era, Elite Dangerous: Odyssey,
is scheduled to land before the end of the current financial year
with console releases coming later in calendar 2021
-- Frontier Foundry, our own games label for third-party
publishing, continues to grow with a number of exciting titles in
discussion as well as the titles already signed. Our first partner
title, the experimental and unique Struggling, released in August
2020. Frontier Foundry is set to become a material part of the
business in the future
-- Our amazing people continue to operate positively through the
challenges posed by remote working, supporting and growing our
portfolio of games. Our team continues to grow, with 175 hires made
during 2020, most of whom joined us during the remote working
period. We reached 600 people as at 31 December 2020 to enable our
future product plans
Current Trading and Outlook
All titles continue to perform well, and revenue growth in the
second half of the financial year is expected to build on the
strong performance achieved in the first half through three
factors:
-- The ongoing sales performance of a larger portfolio, with
Jurassic World Evolution: Complete Edition on Nintendo Switch and
Planet Coaster: Console Edition on PlayStation and Xbox having
released in November 2020, as well as chargeable content packs in
H2 FY21 for Planet Zoo such as the Aquatic Pack (December 2020)
-- Revenue in December, which is typically the biggest month of
the year for videogames sales, was stronger than expected, with
base game units and paid downloadable content ('PDLC') selling well
across all four major franchises
-- The anticipated success of Elite Dangerous: Odyssey, a major
new era for Elite Dangerous, planned for release on PC before the
end of this financial year
Covid-19 related remote working provided collaboration
challenges for us during calendar 2020, and these continue into
2021. As announced in our trading statement on 13 January 2021, in
early January we reviewed the project timelines for our next major
release, Elite Dangerous: Odyssey, to take into account the renewed
need to continue with remote working for the near future. We took
the decision to update our launch plans for Odyssey, with the PC
release still planned for FY21 but the PlayStation and Xbox
releases moving out to FY22. We made this decision to ensure that
we are able to deliver an enjoyable experience for all of our
players, on all platforms.
Odyssey is coming together well and, based on the continued
strong performance of our existing titles and the anticipated
success of Odyssey launching on PC before the end of this financial
year, the Board's expectations for FY21 remain in-line with the
previously guided revenue range of GBP90 million to GBP95 million
(FY20: GBP76.1 million).
For FY22 we anticipate significant growth from the continued
strong performance of our existing portfolio alongside
contributions from an exciting line--up of new games, including two
multi--platform releases incorporating major global IP licenses and
a number of Frontier Foundry titles.
David Braben , Chief Executive, said:
"Covid has caused a great deal of hardship for many people, but
we have been fortunate to benefit from a higher level of demand and
engagement for our immersive games during the various lockdowns
around the world. I am delighted with the growth achieved in our
player communities and in our team during 2020. It's pleasing to
see strong engagement across all of our titles during these
challenging times for so many people and I am proud of our great
team for the adaptability they have shown during remote
working.
Our next major event is Elite Dangerous: Odyssey, which is
coming together really well, and represents one part of our
exciting line-up for 2021 and beyond. We're in great shape for the
future."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as amended by The
Market Abuse (Amendment) (EU Exit) Regulations 2019. The person
responsible for making this announcement on behalf of the Company
is Alex Bevis.
Enquiries :
Frontier Developments +44 (0)1223 394 300
David Braben, CEO
Alex Bevis, CFO
Liberum - Nomad and Joint Broker +44 (0)20 3100 2000
Neil Patel / Cameron Duncan
Jefferies - Joint Broker +44 (0)20 7029 8000
Max Jones / William Brown
Tulchan Communications +44 (0)20 7353 4200
Matt Low / William Booth / Tom Blundell / David Allchurch
About Frontier Developments plc
Frontier is a leading independent developer and publisher of
videogames founded in 1994 by David Braben, co-author of the iconic
Elite game. Based in Cambridge, Frontier uses its proprietary COBRA
game development technology to create innovative genre-leading
games, primarily for personal computers and videogame consoles. As
well as self-publishing internally developed games, Frontier also
publishes games developed by carefully selected partner studios
under its Frontier Foundry games label.
Frontier's LEI number: 213800B9LGPWUAZ9GX18.
www.frontier.co.uk
Financial Review
TRADING
Total revenue in H1 FY21 was GBP36.9 million, 15% ahead of the
comparative period despite that period including the launch revenue
of Planet Zoo (H1 FY20: GBP32.0 million). This was driven by the
continued performance of all four titles - Elite Dangerous, Planet
Coaster, Jurassic World Evolution and Planet Zoo - including new
platform releases for Planet Coaster and Jurassic World
Evolution.
Frontier's strategy of launching and then supporting games to
achieve multi-year earnings continues to deliver, with all four
titles materially contributing to revenue in the period through
both base game sales and PDLC (paid-downloadable content)
sales.
Player engagement on Elite Dangerous, which originally launched
in December 2014, achieved record levels during the period, with
base game sales and PDLC sales both performing well. Total sales to
date of Elite Dangerous have now crossed 4 million paid base game
units. On top of this, the player base for Elite Dangerous was
further increased from November 2020 through its release on the
Epic Games Store. The launch on this important new channel for
Frontier included an initial 'Free Week' which allowed Epic
customers to download the Elite Dangerous base game for free,
boosting the total number of owners of the Elite Dangerous base
game across all platforms to 12 million. This substantial increase
in base game owners comes in advance of the release of Elite
Dangerous: Odyssey, a major new chargeable era for Elite Dangerous,
which is due to land on PC in FY21 with releases planned for
consoles later in calendar 2021.
Planet Coaster continues to perform well, now into its fifth
year on PC since launching in November 2016. Following its success
on PC, the talented team at Frontier brought the creative and
stimulating world of Planet Coaster to PlayStation and Xbox players
during the period. Planet Coaster: Console Edition arrived in
November 2020 for the Xbox Series X|S, Xbox One, PlayStation 4 and
PlayStation 5, making it Frontier's first next generation console
title. Sales from launch in November 2020 have been encouraging,
supported by a strong catalogue of PDLC. Four PDLC packs have so
far been released from a total portfolio of 11 packs currently
available for Planet Coaster on PC. The console releases have
helped to push sales of Planet Coaster across all platforms above 3
million base game units.
Jurassic World Evolution also benefitted from a major new
platform launch in the period, with Jurassic World Evolution:
Complete Edition coming to Nintendo Switch in November 2020. This
edition includes the base game and all eight existing PDLC products
already available on PC, PlayStation and Xbox. Initial sales on
Nintendo Switch, together with continued stronger than expected
performance of Jurassic World Evolution on PC, PlayStation and
Xbox, have driven total base game units sold to date across all
platforms above the 4 million unit threshold.
Nintendo Switch is a relatively new platform for Frontier, with
our first three products having launched for this console during
2020. We're pleased to add this important platform as part of our
distribution strategy. The successful "porting" of our complex,
non-linear games to new platforms, such as achieved with Jurassic
World Evolution to Nintendo Switch and Planet Coaster to
PlayStation and Xbox, is a significant technical challenge. The
strong engagement and positive feedback from those launches stands
testament to the quality and depth of the team we have at
Frontier.
Planet Zoo , which launched in November 2019 exclusively on PC,
has been record-breaking for Frontier in its first 15 months,
selling more base game units on PC and generating more revenue on
PC than any of Frontier's previous titles during an equivalent time
period on that platform. The player community for Planet Zoo
continued to grow during the first half of FY21 and also during the
important festive December trading period, which falls into the
second half of FY21. Base game unit sales have now surpassed 1.5
million units. Our catalogue of PDLC packs for Planet Zoo continues
to evolve with five packs now available - the Australia Pack
launched in August 2020 during H1 FY21 and the Aquatic Pack
released in December 2020, just into H2 FY21.
Frontier Foundry, our own games label for third party
publishing, provided a modest revenue contribution during the
period through sales of the classic Roller Coaster Tycoon 3 on PC
and Nintendo Switch, and through the experimental and unique
Struggling, also on PC and Nintendo Switch. Frontier Foundry is set
to become a material contributor to Frontier's overall business in
the future, with a number of exciting titles already signed and
more in review. Lemnis Gate, the awarding winning FPS game with an
intriguing time-based strategic element, will be just one of the
great titles coming from Frontier Foundry in FY22.
PROFITABILITY
Gross profit of GBP26.2 million was recorded in the period (H1
FY20: GBP21.4 million) with gross margin at 71% (H1 FY20: 67%). The
four percentage point increase in gross margin versus the
comparative period reflected an increased proportion of revenue
from own-IP sales (Planet Zoo, Planet Coaster and Elite Dangerous)
versus licenced-IP sales (Jurassic World Evolution) and lower
overall distribution costs, including the benefit of sales volume
commission tiers on the Steam platform.
Gross research and development expenses in the period increased
to GBP15.8 million, growing from GBP12.4 million in H1 FY20. The
increase resulted from a continued growth in headcount to support
Frontier's development plans, an increase in outsourced activity
and investments in Frontier Foundry partner developments.
Capitalisation of development costs on game developments and
game technology accounted for GBP13.1 million in the six months to
30 November 2020 (H1 FY20: GBP9.8 million). The percentage of gross
research and development costs which were capitalised was 83% in
the period, up from the 79% recorded for H1 FY20. This was because
more internal staff were engaged on the development of chargeable
products, and investments in Frontier Foundry partner developments,
which tend to be capitalised at 100%, started to become more
material. Frontier's normal expectations for capitalisation is
70-90% of gross development spending.
R&D amortisation charges related to previously capitalised
development costs grew to GBP7.0 million (H1 FY20: GBP4.9 million).
A full six months of Planet Zoo base game amortisation was charged
in H1 FY21, versus only one month in H1 FY20, since Planet Zoo
launched in November 2019. H1 FY21 also included one month of
amortisation charges for Planet Coaster: Console Edition and
Jurassic World Evolution: Complete Edition for Nintendo Switch,
since both of those products released in November 2020, the last
month of the period.
Net research and development expenses recorded in the income
statement in the period were GBP9.7 million (H1 FY20: GBP7.5
million), being gross spend of GBP15.8 million, less capitalised
costs of GBP13.1 million, plus amortisation charges of GBP7.0
million.
Sales and marketing expenses in the period were GBP3.4 million
(H1 FY20: GBP3.9 million). The comparative period included the
launch of a major brand new game, Planet Zoo, whereas the current
period covered new platform releases (Planet Coaster on PlayStation
and Xbox, and Jurassic World Evolution on Nintendo Switch) and
smaller game launches (Struggling).
Administrative expenses in H1 FY21 were GBP6.1 million (H1 FY20:
GBP5.4 million). Since the Company's annual bonus scheme is based
on operating profit, a higher level of bonus was accrued in H1 FY21
(operating profit of GBP6.9 million) compared to H1 FY20 (operating
profit of GBP4.5 million).
The growth in operating profit to GBP6.9 million in the period
versus GBP4.5 million in H1 FY20 was achieved through a higher
level of revenue and a higher gross margin percentage, which
outweighed the increase in R&D investment. Operating profit
margin in H1 FY21 was 19% versus 14% in H1 FY20.
Total corporation tax charges in the income statement for the
period totalled GBP0.6 million (H1 FY20: GBP0.6 million). In
accordance with IAS 34, the tax charge recorded in the period is
consistent with a prudent expectation for a full year effective tax
rate of 10%, which has been applied to the GBP6.5 million of
pre-tax profits recorded for H1 FY21. The Group expects to provide
additional details on its tax status in the FY21 financial
statements, including the benefits received from Video Game Tax
Relief.
Profit after tax in the period was GBP5.8 million (H1 FY20:
GBP3.6 million). Basic earnings per share was 15.0 pence (H1 FY20:
9.4 pence).
BALANCE SHEET AND CASH FLOW
The Company continues to benefit from a strong balance sheet,
with cash balances of GBP34.9 million at 30 November 2020 (31 May
2020: GBP45.8 million; 30 November 2019: GBP28.9 million). The
majority of the GBP11m reduction in cash during the period relates
to GBP10m of share purchases in September 2020 by the Employee
Benefit Trust to satisfy future share option exercises. Another
factor in the reduction in cash during the period was the timing of
cash receipts and investments in Frontier Foundry developments. The
majority of net receipts from revenue in November 2020, the biggest
month during the six month period, were remitted by distribution
partners during December 2020 and January 2021, as expected.
Receivables grew to GBP15.0 million at 30 November 2020 (31 May
2020: GBP12.3 million; 30 November 2019: GBP13.9 million),
reflecting the strong sales performance in November 2020, including
the launches of Planet Coaster and Jurassic World Evolution on new
console platforms.
Trade and other payables totalled GBP19.1 million at 30 November
2020 (31 May 2020: GBP21.9 million; 30 November 2019: GBP9.4
million). The reduction versus the year-end balance for FY20 was
mainly due to the payment of the all-staff annual bonus for that
financial year in September 2020.
CONSOLIDATED INCOME STATEMENT
6 months to 6 months to 12 months
30 November 30 November to 31 May
2020 2019 2020
Notes GBP'000 GBP'000 GBP'000
------------------------------------ ------ ------------- -------------- -----------
Revenue 6 36,907 31,967 76,089
Cost of sales (10,747) (10,595) (24,532)
------------------------------------ ------ ------------- -------------- -----------
Gross profit 26,160 21,372 51,557
------------------------------------ ------ ------------- -------------- -----------
Research and development expenses (9,717) (7,528) (16,014)
Sales and marketing expenses (3,432) (3,945) (5,747)
Administrative expenses (6,133) (5,448) (13,172)
------------------------------------ ------ ------------- -------------- -----------
Operating profit 6,878 4,451 16,624
------------------------------------ ------ ------------- -------------- -----------
Net interest (charge)/income (423) (195) (401)
------------------------------------ ------ ------------- -------------- -----------
Profit before tax 6,455 4,256 16,223
------------------------------------ ------ ------------- -------------- -----------
Income tax (646) (639) (329)
------------------------------------ ------ ------------- -------------- -----------
Profit for the period attributable
to shareholders 5,809 3,617 15,894
------------------------------------ ------ ------------- -------------- -----------
Earnings per share
Basic earnings per share 7 15.0 9.4 41.3
Diluted earnings per share 7 14.4 9.0 39.4
All the activities of the Group are classified as continuing
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months to 6 months to 12 months
to
30 November 30 November 31 May 2020
2020 2019
GBP'000 GBP'000 GBP'000
------------------------------------------- ------------ ------------ ------------
Profit for the period 5,809 3,617 15,894
Other comprehensive income:
Exchange differences on translation of
foreign operations 13 (1) (6)
------------------------------------------- ------------ ------------ ------------
Total comprehensive income for the period
attributable to the equity holders of
the parent 5,822 3,616 15,888
------------------------------------------- ------------ ------------ ------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 NOVEMBER 2020
(REGISTERED COMPANY NO: 02892559)
30 November
30 November 2020 2019 31 May 2020
Notes GBP'000 GBP'000 GBP'000
------------------------------- ------ ----------------- ------------- ------------
Non-current assets
Intangible assets 8 58,940 41,439 52,668
Property, plant and equipment 9 5,854 6,161 5,926
Right-of-use asset 21,920 23,544 22,732
Deferred tax asset 6,175 3,185 6,175
92,889 74,329 87,501
------------------------------- ------ ----------------- ------------- ------------
Current assets
Trade and other receivables 14,979 13,909 12,284
Current tax asset 2,377 153 2,377
Cash and cash equivalents 34,892 28,948 45,751
52,248 43,010 60,412
------------------------------- ------ ----------------- ------------- ------------
Total assets 145,137 117,339 147,913
------------------------------- ------ ----------------- ------------- ------------
Current liabilities
Trade and other payables (11,940) (8,415) (13,669)
Lease liability (1,337) (1,337) (1,337)
Deferred income (1,972) (1,033) (1,439)
Current tax liabilities (684) (1,605) -
(15,933) (12,390) (16,445)
------------------------------- ------ ----------------- ------------- ------------
Net current assets 36,315 30,620 43,967
------------------------------- ------ ----------------- ------------- ------------
Non-current liabilities
Provisions (34) (19) (27)
Lease liability (21,530) (22,867) (22,198)
Deferred income (230) (463) (234)
Other payables (7,184) (939) (8,237)
Deferred tax liabilities (4,038) - (4,038)
(33,016) (24,288) (34,734)
------------------------------- ------ ----------------- ------------- ------------
Total liabilities (48,949) (36,678) (51,179)
------------------------------- ------ ----------------- ------------- ------------
Net assets 96,188 80,661 96,734
------------------------------- ------ ----------------- ------------- ------------
Equity
Share capital 10 196 195 195
Share premium account 35,772 34,589 34,589
Equity reserve (9,529) (2,023) (925)
Foreign exchange reserve (9) (17) (22)
Retained earnings 69,758 47,917 62,897
Total equity 96,188 80,661 96,734
------------------------------- ------ ----------------- ------------- ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Foreign
Share premium Equity exchange Retained Total
Capital account reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 June 2019 194 34,390 (3,073) (16) 44,011 75,506
------------------------------------- --------- --------- --------- ---------- ---------- ---------
Profit for the period - - - - 3,617 3,617
Other comprehensive income:
Exchange differences on translation
of foreign operations - - - (1) - (1)
Total comprehensive income
for the period - - - (1) 3,617 3,616
------------------------------------- --------- --------- --------- ---------- ---------- ---------
Issue of share capital net
of expenses 1 199 - - - 200
Share-based payment charges - - 852 - - 852
Share-based payment transfer
relating to option lapses - - (289) - 289 -
EBT net cash inflows from
option exercises - - 487 - - 487
At 30 November 2019 195 34,589 (2,023) (17) 47,917 80,661
------------------------------------- --------- --------- --------- ---------- ---------- ---------
Profit for the period - - - - 12,277 12,277
Other comprehensive income:
Exchange differences on translation
of foreign operations - - - (5) - (5)
------------------------------------- --------- --------- --------- ---------- ---------- ---------
Total comprehensive income
for the period - - - (5) 12,277 12,272
------------------------------------- --------- --------- --------- ---------- ---------- ---------
Issue of share capital net
of expenses - - - - - -
Share-based payment charges - - 1,095 - - 1,095
Share-based payment transfer
relating to option lapses - - (221) - 221 -
EBT net cash inflows from
option exercises - - 224 - - 224
Deferred tax movements posted
directly to reserves - - - - 2,482 2,482
At 31 May 2020 195 34,589 (925) (22) 62,897 96,734
------------------------------------- --------- --------- --------- ---------- ---------- ---------
Profit for the period - - - - 5,809 5,809
Other comprehensive income:
Exchange differences on translation
of foreign operations - - - 13 - 13
------------------------------------- --------- --------- --------- ---------- ---------- ---------
Total comprehensive income
for the period - - - 13 5,809 5,822
------------------------------------- --------- --------- --------- ---------- ---------- ---------
Issue of share capital net
of expenses 1 1,183 - - - 1,184
Share-based payment charges - - 1,045 - - 1,045
Share-based payment transfer
relating to option lapses - - (1,052) - 1,052 -
EBT cash outflows from share
purchases - - (10,000) - - (10,000)
EBT net cash inflows from
option exercises - - 1,403 - - 1,403
------------------------------------- --------- --------- --------- ---------- ---------- ---------
At 30 November 2020 196 35,772 (9,529) (9) 69,758 96,188
------------------------------------- --------- --------- --------- ---------- ---------- ---------
CONSOLIDATED STATEMENT OF CASHFLOWS
6 months to 6 months to 12 months
30 November 30 November to 31 May
2020 2019 2020
GBP'000 GBP'000 GBP'000
----------------------------------------- ------------- ------------- -----------
Cash generated from operations 11,597 3,107 32,415
Taxes received 38 - -
Cashflow from operating activities 11,635 3,107 32,415
----------------------------------------- ------------- ------------- -----------
Investing activities
Purchase of property, plant and
equipment (488) (346) (666)
Expenditure on intangible assets (13,515) (10,064) (21,044)
Interest received 27 195 330
Cashflow from investing activities (13,976) (10,215) (21,380)
----------------------------------------- ------------- ------------- -----------
Financing activities
Proceeds from issue of share capital 1,184 200 200
Employee Benefit Trust net investment (8,597) 487 711
Payment of lease liabilities and
related interest (1,034) - (1,551)
Interest paid (88) - -
Cashflow from financing activities (8,535) 687 (640)
----------------------------------------- ------------- ------------- -----------
Net change in cash and cash equivalents
from continuing operations (10,876) (6,421) 10,395
Cash and cash equivalents at beginning
of period 45,751 35,332 35,332
Exchange differences on cash and
cash equivalents 17 37 24
Cash and cash equivalents at end
of period 34,892 28,948 45,751
----------------------------------------- ------------- ------------- -----------
The accompanying notes form part of this financial information.
Reconciliation of operating profit to cash
generated from operations
6 months to 6 months to 12 months
30 November 30 November to 31 May
2020 2019 2020
GBP'000 GBP'000 GBP'000
----------------------------------------- ------------- ------------- -----------
Operating profit 6,878 4,451 16,624
Depreciation and amortisation 8,616 6,425 14,870
----------------------------------------- ------------- ------------- -----------
EBITDA 15,494 10,876 31,494
----------------------------------------- ------------- ------------- -----------
Movement in unrealised exchange
(gains)/losses on forward contracts (298) (76) (91)
Share-based payment expenses 1,045 852 1,947
----------------------------------------- ------------- ------------- -----------
Operating cashflow before movements
in working capital 16,241 11,652 33,350
----------------------------------------- ------------- ------------- -----------
Net changes in working capital:
Change in trade and other receivables (2,397) (8,730) (7,046)
Change in trade and other payables (2,254) 178 6,097
Change in provisions 7 7 14
----------------------------------------- ------------- ------------- -----------
Cash generated from operations 11,597 3,107 32,415
----------------------------------------- ------------- ------------- -----------
NOTES TO THE FINANCIAL INFORMATION
1. CORPORATE INFORMATION
Frontier Developments plc 'the Group' develops and publishes
video games for the interactive entertainment sector.
The Company is a public limited company and is incorporated and
domiciled in the United Kingdom.
The address of its registered office is 26 Science Park, Milton
Road, Cambridge CB4 0FP.
The Group's operations are based in the UK and its North
American subsidiary located in the US, Frontier Developments
Inc.
The condensed, consolidated interim financial statements do not
comprise statutory accounts within the meaning of section 434 of
the Companies Act 2006. Statutory accounts for the year ended 31
May 2020 were approved by the Board of Directors on 9 September
2020 and delivered to the Registrar of Companies. The Auditors
Report was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under section 498 of
the Companies Act 2006.
2. BASIS OF PREPARATION AND STATEMENT OF COMPLIANCE
Basis of preparation
The consolidated interim financial statements should be read in
conjunction with the financial statements for the year ended 31 May
2020.
The financial information of Frontier Developments plc has been
prepared in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs as adopted by the
EU) and the Companies Act 2006 applicable to companies reporting
under IFRS. The consolidated interim financial statements have been
prepared in accordance with International Accounting Standard 34
'Interim Financial Reporting' (IAS 34).
The financial information has been prepared under the historical
cost convention except for financial instruments held at fair
value. The financial information is presented in Sterling, the
presentation and functional currency for the Group and Company. All
values are rounded to the nearest thousand pounds (GBP'000) except
when otherwise indicated.
Going concern basis
The Group's forecasts and projections, taking account of current
cash resources and reasonably possible changes in trading
performance, support the conclusion that there is a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future, a period of not
less than 12 months from the date of approval of these financial
statements. The Group therefore continues to adopt the going
concern basis in preparing its financial statements.
Impact of COVID-19 on going concern
The Board continuously monitor the performance of the Groups
operational activities and the expected future prospects. As well
as reviewing the current market trends and a number of downside
scenarios, including any mitigations, the Board have assessed the
ability to continue as a going concern during the pandemic. The
results of this assessment is that the Group would be able to
withstand significant changes in trading behaviour and still be
able to continue operationally.
The Group benefits from a strong cash position, continued demand
for products and no negative impacts on debtor recoverability.
Therefore the Board are satisfied that the financial statements are
prepared under the going concern basis.
3. ACCOUNTING POLICIES
The consolidated interim financial statements have been prepared
in accordance with the accounting policies adopted in the Group's
most recent annual financial statements for the year ended 31 May
2020.
4. ACCOUNTING ESTIMATES AND KEY JUDGEMENTS
When preparing the interim financial statements, management
undertakes a number of judgements, estimates and assumptions about
recognition and measurements of assets, liabilities, income and
expenses. The actual results may differ from these estimates.
The judgements, estimates and assumptions applied in the interim
financial statements, including the key sources of estimation
uncertainty, were the same as those applied in the Group's last
annual financial statements for the year ended 31 May 2020.
5. SIGNIFICANT EVENTS AND TRANSACTIONS
There were no significant events or transactions in the interim
period (1 June 2020 to 30 November 2020) which were not included
within the interim financial statements. There have been no
significant events or transactions during the period from the end
of the interim period to the day preceding the date of this report
(1 December 2020 to 2 February 2021).
6. SEGMENT INFORMATION
The Group identifies operating segments based on internal
management reporting that is regularly reviewed by the chief
operating decision maker and reported to the Board. The chief
operating decision maker is the Chief Executive Officer.
Management information is reported as one operating segment,
being revenue from self-published and publishing franchises and
other revenue streams such as royalties and licensing.
The Group does not provide any information on the geographical
location of sales as the majority of revenue is through third-party
distribution platforms which are responsible for the sales data of
consumers. The cost to develop this information internally would be
excessive.
All of the Group's non-current assets are held within the
UK.
All material revenue is categorised as either publishing revenue
or other revenue. Other revenue mainly related to royalty
income.
The Group typically satisfies its performance obligations at the
point that the product becomes available to the customer and
payment has been received up front.
6 months to
6 months to 30 November 12 months to
30 November 2020 2019 31 May 2020
GBP'000 GBP'000 GBP'000
-------------------- ------------------ ------------- -------------
Publishing revenue 36,818 31,826 75,924
Other revenue 89 141 165
-------------------- ------------------ ------------- -------------
36,907 31,967 76,089
-------------------- ------------------ ------------- -------------
7. EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the
profits attributable to the shareholders of Frontier Developments
plc divided by the weighted average number of shares in issue
during the period.
6 months to 6 months to 12 months
to
30 November 30 November 31 May 2020
2020 2019
Profit attributable to shareholders
(GBP'000) 5,809 3,617 15,894
Weighted average number of shares 38,779,241 38,357,558 38,483,762
Basic earnings per share (pence) 15.0 9.4 41.3
------------------------------------- --------------------------- ------------ -------------------
The calculation of the diluted earnings per share is based on
the profits attributable to the shareholders of Frontier
Developments plc divided by the weighted average number of shares
in issue during the period as adjusted for the dilutive effect of
share options.
6 months to 6 months to 12 months
to
30 November 30 November 31 May 2020
2020 2019
Profit attributable to shareholders
(GBP'000) 5,809 3,617 15,894
Diluted weighted average number
of shares 40,469,204 40,280,029 40,316,894
Diluted earnings per share (pence) 14.4 9.0 39.4
------------------------------------- --------------------------- ------------ -------------------
The reconciliation of average number of Ordinary Shares used for
basic and diluted earnings per share is as follows:
6 months to 6 months to 12 months
to
30 November 30 November 31 May 2020
2020 2019
Weighted average number of shares 38,779,241 38,357,558 38,483,762
Dilutive effect of share options 1,689,963 1,922,471 1,833,132
Diluted average number of shares 40,469,204 40,280,029 40,316,894
----------------------------------- --------------------------- ------------ -------------
8. INTANGIBLE ASSETS
Game Technology Game Developments Licences Total
and Third-party
Software
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ----------------- ------------------ ----------------- --------
Cost
At 31 May 2019 6,762 54,959 3,309 65,030
Additions 904 8,861 299 10,064
At 30 November 2019 7,666 63,820 3,608 75,094
------------------------------- ----------------- ------------------ ----------------- --------
Additions 1,492 8,508 8,309 18,309
At 31 May 2020 9,158 72,328 11,917 93,403
------------------------------- ----------------- ------------------ ----------------- --------
Additions 1,529 11,602 384 13,515
Transfer - (347) 347 -
At 30 November 2020 10,687 83,583 12,648 106,918
------------------------------- ----------------- ------------------ ----------------- --------
Amortisation
At 31 May 2019 4,793 22,599 1,188 28,580
Amortisation charges 398 4,533 144 5,075
At 30 November 2019 5,191 27,132 1,332 33,655
------------------------------- ----------------- ------------------ ----------------- --------
Amortisation charges 398 5,875 807 7,080
At 31 May 2020 5,589 33,007 2,139 40,735
------------------------------- ----------------- ------------------ ----------------- --------
Amortisation charges 699 6,350 194 7,243
At 30 November 2020 6,288 39,357 2,333 47,978
------------------------------- ----------------- ------------------ ----------------- --------
Net Book Value
Net book value at 30 November
2020 4,399 44,226 10,315 58,940
Net book value at 31 May 2020 3,569 39,321 9,778 52,668
------------------------------- ----------------- ------------------ ----------------- --------
Net book value at 30 November
2019 2,475 36,688 2,276 41,439
------------------------------- ----------------- ------------------ ----------------- --------
Net book value at 31 May 2019 1,969 32,360 2,121 36,450
------------------------------- ----------------- ------------------ ----------------- --------
9. TANGIBLE ASSETS
Fixtures Computer Leasehold Total
and Fittings Equipment Improvements
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ----------------------- ----------- -------------- --------
Cost
At 31 May 2019 850 2,138 5,348 8,336
Additions 6 330 10 346
------------------------------- ----------------------- ----------- -------------- --------
At 30 November 2019 856 2,468 5,358 8,682
------------------------------- ----------------------- ----------- -------------- --------
Additions 7 313 - 320
At 31 May 2020 863 2,781 5,358 9,002
------------------------------- ----------------------- ----------- -------------- --------
Additions - 488 - 488
At 30 November 2020 863 3,269 5,358 9,490
------------------------------- ----------------------- ----------- -------------- --------
Depreciation
At 31 May 2019 246 1,392 346 1,984
Charge for the period 75 295 167 537
At 30 November 2019 321 1,687 513 2,521
------------------------------- ----------------------- ----------- -------------- --------
Charge for the period 75 312 168 555
At 31 May 2020 396 1,999 681 3,076
------------------------------- ----------------------- ----------- -------------- --------
Charge for the period 75 318 167 560
At 30 November 2020 471 2,317 848 3,636
------------------------------- ----------------------- ----------- -------------- --------
Net Book Value
Net book value at 30 November
2020 392 952 4,510 5,854
-------------------------------
Net book value at 31 May 2020 467 782 4,677 5,926
------------------------------- ----------------------- ----------- -------------- --------
Net book value at 30 November
2019 535 781 4,845 6,161
------------------------------- ----------------------- ----------- -------------- --------
Net book value at 31 May 2019 604 746 5,002 6,352
------------------------------- ----------------------- ----------- -------------- --------
10. SHARE CAPITAL
Nominal Value
Number GBP
------------------------------------------------ ----------- --------------
At 1 June 2019 38,741,068 193,705
------------------------------------------------ ----------- --------------
Shares issued on option exercises and warrants 170,742 854
------------------------------------------------ ----------- --------------
At 30 November 2019 38,911,810 194,559
------------------------------------------------ ----------- --------------
Shares issued on option exercises and warrants - -
------------------------------------------------ ----------- --------------
At 31 May 2020 38,911,810 194,559
------------------------------------------------ ----------- --------------
Shares issued on option exercises and warrants 377,047 1,885
------------------------------------------------ ----------- --------------
At 30 November 2020 39,288,857 196,444
------------------------------------------------ ----------- --------------
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END
IR UUAKRAWUURAR
(END) Dow Jones Newswires
February 03, 2021 02:00 ET (07:00 GMT)
Grafico Azioni Frontier Developments (LSE:FDEV)
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Grafico Azioni Frontier Developments (LSE:FDEV)
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