Frontier Developments revenue rises as it rolls out second video game

Video game company Frontier Developments revenue surged in the second half of the year as it rolled out its second franchise and expects to meet its targets for the full year.

Revenue for the six months ended 30 November 2016 surged 66% to about £18.1m, compared to the first half of last year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the period is about £5.7m and at 30 November 2016 the company had net cash of £6.7m.

Although the state of the market after Christmas remains to be seen, the company said that with strong first-half revenues, which exceeded forecasts, means it is confident about meeting its expectations for the full financial year. The has led the company to increase investment in development and other business activities.

While the dollar strengthened against sterling in the second half of the financial year any benefit was offset by realised and fair value losses from historical currency hedges.

In November 2016, the company launched of its second franchise, Planet Coaster and by the end of December over 500,000 units had been sold and paid.

For the Elite Dangerous franchise over 2.1m paid units were sold by the end of December, while Elite Dangerous: Horizons, was released on Xbox One in June. The company also delivered Horizons for PC and Xbox One by launching 'The Guardians' in October.

Chief executive David Braben, said: "I am delighted that, as planned, Frontier is now self-publishing multiple franchises, marking the end of its business model transition and the beginning of a new phase of growth.

“Both our released franchises are doing well, with cumulative Elite Dangerous franchise sales of over 2.1m units and over 0.5m units for Planet Coaster. We are now working to further the success of our existing franchises and create additional ones."

Shares in Frontier Developments were down 4% to 300p at 0900 GMT.