Annual Report and Accounts 2019

A record year. An exciting future.

A record year. An exciting future.

Frontier is a world-class videogame developer and publisher, with a proven track record of launching multiple successful franchises with a strong post-launch nurturing strategy which delivers multi-year revenues.

Each new release provides strong launch sales, while a combination of regular free and chargeable updates, together with active community support, ensures longevity of sales performance. Frontier is currently the UK’s largest independent studio and continues to grow. In the 12 months to 31 May 2019 Frontier recruited more than 120 people, growing headcount to over 460 staff in its Cambridge headquarters.

In financial year 2019 Frontier grew revenue by more than 160% and operating profit by nearly 600% representing record financial performance. This was delivered through the success of Jurassic World Evolution (June 2018) and the ongoing performance of Frontier’s first two self-published titles, Elite Dangerous (2014) and Planet Coaster (2016).

Frontier’s next major release is Planet Zoo, the Company’s fourth title launch since the transition to a self-publishing business model in 2013-2014. Planet Zoo is the ultimate zoo simulation, featuring authentic living animals, rich management and limitless creativity, and is coming exclusively on PC on 5 November 2019.

In addition to Frontier’s core model of developing and publishing its own games, the Company is partnering with other high-quality developers to bring more games to market through the Company’s Frontier Publishing initiative. In June 2019 Frontier announced the first of these deals with Haemimont Games, an experienced and respected developer of quality strategy and management titles.

Highlights & KPIs

Operational & Strategic Highlights

  • Frontier achieved its biggest launch to date with Jurassic World Evolution. Released in June 2018 alongside the launch of the Jurassic World: Fallen Kingdom film, the game achieved 1 million unit sales in five weeks and 2 million in seven months.
  • Frontier’s strategy of supporting and nurturing its titles through active community engagement, free updates, and chargeable content (paid downloadable content or ‘PDLC’) continues to deliver, with Jurassic World Evolution, Planet Coaster and Elite Dangerous all continuing to entertain existing players and attract new ones.
  • Jurassic World Evolution has been supported since launch through a number of free updates and by a growing range of chargeable content, with five separate PDLC packs now available as at 4 September 2019.
  • Planet Coaster, launched in November 2016, continues to lead its genre. 11 separate chargeable themed expansion packs are now available, enabling existing players to access substantial new features and content, and attracting new players into the Planet Coaster world of creativity and sharing. Planet Coaster base game unit sales passed 2 million units in January 2019.
  • Elite Dangerous, launched in December 2014, continues to deliver exciting game experiences to active players whilst welcoming new ones. In December 2018 Frontier delivered the fourth chapter of the Beyond season of free updates, which added a number of gameplay features and further narrative to the Elite Dangerous universe. In January 2019 Elite Dangerous crossed the 3 million base game unit threshold.
  • Planet Zoo will be Frontier’s fourth major game release since the transition to self-publishing. Coming exclusively on PC on 5 November 2019, Planet Zoo will be the ultimate zoo simulation, featuring authentic living animals, rich management and limitless creativity.
  • On 6 March 2019 Frontier announced securing a major global IP licence for a future game release in 2021.
  • On 11 June 2019 Frontier announced its first partnership under the Frontier Publishing initiative, with experienced developer Haemimont Games. The partnership will see Frontier and Haemimont work together on a new project for release in two to three years’ time.

Financial Highlights

  • The launch of Jurassic World Evolution, combined with the ongoing performance of all three titles, Jurassic World Evolution, Planet Coaster and Elite Dangerous, propelled the Company to a record financial performance for the year ended 31 May 2019.
  • Revenue increased by over 160% to £89.7 million in FY19 (FY18: £34.2 million), which was 2.4 times the previous record of £37.4 million in FY17.
  • Operating profit, as reported under IFRS, grew to £19.4 million, nearly 600% higher than the prior year (FY18: £2.8 million) and 2.5 times the previous record of £7.8 million in FY17.
  • Operating profit margin increased to 22% (FY18: 8%, FY17: 21%).
  • Operating cashflow* generated an inflow of £15.4 million (FY18: an outflow of £2.8 million), reflecting the strong trading performance.
  • Cash balances increased by £11.2 million during the year to £35.3 million (FY18: £24.1 million).

* Operating profit excluding non-cash items, less investments in franchises and other game related intangible assets.

Revenue (£m)

£89.7m

Operating profit (£m)

£19.4m

Operating margin (%)

22%

EBITDA* (£m)

£29.0m

EPS (basic) (p)

45.4p

Operating cashflow** (£m)

£15.4m

Net cash balance (£m)

£35.3m

* Earnings before interest, tax, depreciation and amortisation.
** Operating profit excluding non-cash items, less investments in franchises and other game related intangible assets.

Statements

It's thanks to our fantastic people that we are in such a strong position.

The hard work of our amazing team has delivered a set of record financial results; of which we are all extremely proud. This has not happened by accident. Over the last 25 years our talented personnel, led by David Braben and Jonny Watts, have established a culture and …reputation for high quality, as well as for creating enduring and authentic game experiences. It’s this sharp focus on quality that led us to achieve our best year yet in FY19, through the success of… our biggest launch to date, Jurassic World Evolution, and the ongoing popularity of Elite Dangerous and Planet Coaster.

David Gammon
Non-executive Chairman
PDF icon Chairmans-Statement-2019.pdf (1.44 MB) (1.44 MB)
Our strategic objective is to create long-term sustainable growth.

The five years since we transitioned to a self-publishing model have been really exciting. We continue to successfully execute the strategy we set out at IPO, building a great portfolio of our own games in the process. FY19 has been our best yet and I am very pleased to report a record level of financial performance, which reflects the skill and hard work of our talented people and the support of our players around the world. We continue to nurture and enhance all three of our existing titles (Elite Dangerous, Planet Coaster and Jurassic World Evolution) and I look forward to… the release of our fourth, Planet Zoo, later this year. Our roadmap for future releases both as a developer and publisher is looking particularly strong, including our announcement in March 2019 that one future launch, in 2021, will benefit from a major global IP licence. More IP licences are anticipated.

David Braben
Founder & CEO
The ongoing performance of all three titles reflects Frontier's approach to supporting and nurturing each of its franchises.

The launch of Jurassic World Evolution in June 2018, combined with the ongoing performance of all three titles, Jurassic World Evolution, Planet Coaster and Elite Dangerous, propelled the Company to a record financial performance for the year ended 31 May 2019. Revenue increased by over 160% to £89.7 million (FY18: £34.2 million) and operating profit grew by nearly 600% to £19.4 million (FY18: £2.8 million). Cash balances increased by £11.2 million during the year to £35.3 million (FY18: £24.1 million) reflecting the strong trading performance.

Alex Bevis
CFO & Company Secretary

Our Strategic Priorities

Creating and managing franchises

In order to maximise the return on our core skills and assets we target game genres where we believe we can deliver both high-quality, differentiated offerings using established expertise and intellectual property, and have a strong chance of successful market entry, as we believe that sector is underserved by the existing offerings, based on past experience or knowledge of that sector.

We use this proven, rigorous and repeatable model to invest our resources with the intention of creating world-class games with strong franchise potential and plans for strong post-launch product support to help realise this potential. With Elite Dangerous we knew there had been significant success in the past, not least because of our own games in that area in previous decades, but that there were no games like it at the time. We verified that there was a significant appetite for such a game with Kickstarter crowdfunding at the end of 2012 and early 2013, and the game itself has now vindicated that decision with continued success in its fifth year since full release.

PDF icon Strategic-Report-2019.pdf (6.63 MB)81Spa611d1

Developing our business to achieve repeatable success

INVEST

We invest our development resources in games with strong franchise potential, primarily on PC and console. In order to maximise the return on our core skills and assets we target game genres where we have established expertise and/or intellectual property within our teams. Audiences on the chosen platforms tend to value games that exhibit Frontier’s key development strengths.

DEVELOP

We use online channels to create and engage with player communities during game development, a practice which provides a valuable source of feedback, and these player communities provide excellent advocacy for each franchise prior to launch.

PUBLISH

With each of our franchises, we plan for the long term, and how best to support and sustain the audience for each one. A dedicated team monitors progress based on sentiment towards the games, the success of each of the distribution channels and platforms, and the uptake of additional content both free and paid, allowing us to reach the widest possible audience over time.

PDF icon Strategic-Report-2019.pdf (6.63 MB)81Spa611d1

Blazing a trail in to the beyond

Elite Dangerous is now in its sixth financial year since release in December 2014. Since launch we have continued to release expansions to the original Elite Dangerous game, simultaneously on PC, PlayStation 4 and Xbox One as those platforms have been added. Simultaneous releases on all supported platforms are planned to continue going forward.

PDF icon Strategic-Report-2019.pdf (6.63 MB)81Spa611d1

Evolving coaster park simulation

Planet Coaster was successfully launched in November 2016 after a short beta period, achieving the global #1 position on the Steam distribution channel and continuing to sell strongly through the subsequent holiday period.

PDF icon Strategic-Report-2019.pdf (6.63 MB)81Spa611d1

Build your own Jurassic World

Jurassic World Evolution, our first self-published licensed title, launched on 12 June 2018. It was our first self-published title (although not our first game) to debut simultaneously on PC, PlayStation 4 and Xbox One, and the first to benefit from a major marketing event by launching alongside the latest film in the franchise, Jurassic World: Fallen Kingdom at the start of the biggest games industry show of the year – the Electronic Entertainment Expo (E3) in Los Angeles.

PDF icon Strategic-Report-2019.pdf (6.63 MB)81Spa611d1

Simulation runs wild

In April 2019 Frontier announced its next major release would be Planet Zoo, launching exclusively for PC on 5 November 2019. Frontier aims to make Planet Zoo the ultimate zoo simulation, featuring authentic living animals, rich management and limitless creativity. In Planet Zoo players can build and manage a truly modern zoo where animal welfare and conservation comes first.

PDF icon Strategic-Report-2019.pdf (6.63 MB)81Spa611d1

Future Plans

We will continue to grow the capacity and capability of our organisation in both commercial and development areas in order to further the successful evolution of our franchises.

As part of this process, we will explore additional potential partnerships and licensing opportunities. We will also continue to review potential acquisition targets that could augment our capacity or add new capabilities as well as IP that may help us achieve our goals.

We will endeavour to enhance and expand our franchises and grow their audiences using appropriate additional products, platforms, media, marketing, distribution channels and charging models through investing in the necessary people, organisation, resources and infrastructure. We are building a broad portfolio of franchises, each different to the last and each with the capabilities to expand over time and we are scaling up for the future so we can release games more frequently. All upcoming franchises will be selected using the same approach set out above, and we already have several in different phases of development.

PDF icon Strategic-Report-2019.pdf (6.63 MB)81Spa611d1

Annual report and accounts 2019

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