AIM-listed games developer and publisher Frontier Developments (LON:FDEV) posted record adjusted operating profit for FY26. The firm also said it expected FY27 to start positively and was confident in delivering results in line with expectations.
Jurassic-sized profits
For the year to end-May, Frontier registered a 16% increase in revenue to £104.8 million, the second-highest level in its history. CEO Jo Cooke put the firm’s success down to the popularity of its CMS (creative management simulation) games.
Almost 90% of FY26 sales came from CMS games including Jurassic World Evolution 3, alongside continued revenue contributions from the Planet Coaster and Planet Zoo game franchises, and the first two games in the Jurassic World Evolution series.
Adjusted operating profit rose 44% to £19 million, topping the previous record of £15.9 million set in FY19. Underlying adjusted profit, which excludes a £3.9 million gain from the sale of publishing rights in FY25, more than doubled.
Cash generation of £18.8 million was up 46% on FY25 and topped the previous record of £15.8 million in FY19. Cash on the balance sheet at 31 May was £44 million, despite the firm spending £17.5 million on share buybacks.
We’ve championed Frontier since the start of the year when Jo Cooke rejoined the firm as CEO. Since then the business has gone from strength to strength, yet weirdly the shares haven’t reflected that progress.
The CMS strategy is clearly a winner, with Jurassic World 3 seeing strong player engagement, sustained playtime and an active user community. People sharing gameplay experiences and consistent participation suggests it should have a strong ‘retention profile’.
Frontier has a successful post-release strategy too, combining free updates with paid downloads to help sustain engagement. New content is planned this year to further engage the player base and attract new audiences.
There is also the second Warhammer 40,000 release still to come, Chaos Gate – Deathwatch. Building on the success of the first release, Chaos Gate – Daemonhunters, the sequel has already had a positive reception in gaming circles.
We fully expect the firm to deliver on its FY27 forecasts as it continues to roll out new and engaging content. Bear in mind too, the firm bought in 10% of the shares last year which means an automatic 11% lift to EPS for FY27 and beyond.
Read the press release here:
https://www.frontier.co.uk/investors
