Shares in Frontier Developments (FDEV) have been in steady decline this year, after the video game developer's mini profit warning in March. At first glance, results for the 12 months to May - which showed a 20 per cent decline in cash profits to £4.9m - appear to support the prevailing market sentiment, but there were several sources of encouragement.
Firstly, the Cambridge-based group has coped commendably with its complete transition to self-published revenue from the Elite Dangerous series, from the lower-margin work carried out on behalf of larger game developers. What's more, sales from the franchise have been sufficient to pay for the development and expensive marketing costs of Planet Coaster ahead of its launch in November without impairing the cash position beyond the half-year mark. Pre-sales of the game have so far reached 50,000 - around half of which came in a seasonally quieter period - which is ahead of the board's expectations.
Prior to these results, Numis was guiding for pre-tax profits of £3.3m and adjusted EPS of 7.3p for the March 2017 year-end, rising to £6m and 13.2p in 2018.
FRONTIER DEVELOPMENTS (FDEV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 174p | MARKET VALUE: | £59.3m | |
| TOUCH: | 171-177p | 12-MONTH HIGH: | 246p | LOW: 170p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 41 | |
| NET ASSET VALUE: | 66.8p* | NET CASH: | £8.6m | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 14.2 | 1.40 | 5.7 | nil |
| 2013 | 12.1 | 1.07 | 4.2 | nil |
| 2014 | 9.5 | -1.71 | -5.8 | nil |
| 2015 | 22.8 | 1.62 | 4.9 | nil |
| 2016 | 21.4 | 1.28 | 4.2 | nil |
| % change | -6 | -21 | -14 | - |
Ex-div: na Payment: na *Includes intangible assets of £16.7m, or 49p a share. | ||||
