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Frontier Developments shares jump on Atari sale and in-line revenues

11:39, 2nd April 2024
Victor Parker
Vox Newswire
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Frontier Developments (FDEVFollow | FDEV, a Cambridge-based video game developer and publisher, issued a trading update highlighting recent developments in its product portfolio and balance sheet.

Frontier said sales since the interim results have been in line with expectations. Currently, the largest contributors are Frontier's creative management simulation (CMS) games, led by Jurassic World Evolution 2 and Planet Zoo.

Planet Zoo, previously only available on PC, launched on Xbox Series X/S and PS5 on March 26th with positive reviews and strong initial sales. Total sales up to and including the release day exceeded sales achieved by Planet Coaster when Frontier launched that title on consoles in late 2020. The launch of Planet Zoo: Console Edition was supported by 3 product options including a premium "Ultimate Edition".

Frontier also reported the sale of publishing rights for its classic RollerCoaster Tycoon 3 title to Atari. Frontier originally released the title in 2004 - publishing rights subsequently changed hands but returned to Frontier in 2018 under the original development agreement. On March 15, 2024, Frontier sold the rights to Atari to enable the former to be the sole publisher of all Rollercoaster Tycoon titles. Total consideration for the sale was US$7m, including US$4m upfront cash and US$3 deferred cash.

FDEV reported a cash position of £23.4m on March 31, 2024, up from £19.9m on December 31, 2023.

 

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A highly positive update from Frontier, detailing the recent release of Planet Zoo: Console Edition, the sale RollerCoaster Tycoon 3's publishing rights to Atari, and a significantly improved cash position. Sales remained in line with expectations and guidance was maintained. FDEV shares jumped 16% on the update.

Frontier's sales were boosted by the console release of Planet Zoo, seeing strong initial player engagement. Strong sales of the abovementioned Ultimate Edition should bolster cash in FY24, though revenues will be split between FY24 and FY25 since content will continue to be delivered into FY25.

The much improved cash position vs December 31 benefited from the sale of RollerCoaster Tycoon 3's publishing rights to Atari. Cash received during the 3-month period included the US$4m upfront consideration and the first tranche of the Video Games Tax Relief cash credit related to FY23 UK tax returns. Cash receipts from the launch of Planet Zoo: Console Edition should be received in April and May, providing further working capital in FY24.

Frontier maintained previous guidance for FY24, which did not take into account the incremental profit and cash from the sale of the RollerCoaster Tycoon 3 publishing rights. A further update is expected in June 2024.

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