Frontier Developments FY profits slide on softened revenues

Video games developer Frontier Developments said on Wednesday that full-year profits had fallen as a result of a reduction in revenues.

In the twelve months ended 31 May, Frontier recorded revenues of £76.0m, a 15% drop year-on-year, and pre-tax profits of. £16.6m - down from £19.4m a year earlier. Earnings per share fell to 41.3p from 46.9p

However, operating margins remained flat 22% and cash balances improved from £35.3m to £45.8m.

On the operational front, the AIM-listed group said Planet Zoo, its major new release for 2020, had become its biggest-selling game to-date on PC - with over 1.0m base game units sold in less than six months.

Looking forward, Frontier said sales across all its games had been consistent with expectations so far in its 2021 trading year after a strong close to the prior year and stated it was on track to deliver record revenues of £90.0m to £95.0m in the current year.

Chief executive David Braben said: "During the lockdown, we have seen an accelerated move towards digital sales of games and many more people becoming gamers, as games become an ever-more vital component of the entertainment industry.

"Rich, community-focused games like ours that are attractive to play but take years to master, have performed very well during these challenging times, and we have every expectation of them continuing to do so, notwithstanding the macroeconomic uncertainties presented by the Covid-19 pandemic."

As of 1325 BST, Frontier Developments shares were up 0.68% at 2,401.25p.