Videogames publisher Frontier Developments PLC (LON:FDEV) expects to report record revenues for the year to end-May and said it has received an “excellent” reception ahead of the launch of its next game later this year.
Annual revenues are expected to have reached £89mln thanks to the roaring success of Jurassic World Evolution since its launch last June, a 160% increase in sales compared to the previous year and 140% on the previous record of £37.4mln from the year before that.
READ: Frontier Developments surges as it reports “record” performance at interims
After Jurassic World Evolution was simultaneously released on PC, PlayStation and Xbox alongside the release in cinemas of the Jurassic World: Fallen Kingdom film, in March Frontier signed another major global IP licence to develop and publish a future game, which is expected to be released in two years' time.
The Cambridge-based group said that because it self-publishes its games, they benefit from continuing support and nurturing, so that the past year saw sales of the dinosaur park title combined with the ongoing revenues from the first two self-published titles, Elite Dangerous in 2014 and Planet Coaster two years after that.
The company said it expects to report an operating profit margin of approximately 21% for full-year 2019, up from 8% a year earlier.
Frontier Developments' chief executive David Braben said he was “really excited” about delivering the next game, Planet Zoo, later this year, with a launch date of 5 November set for the follow-up to Planet Coaster.
“The reception we have had from the community has been excellent and we are looking forward to introducing them to the most authentic animals in videogame history,” he said.
In a note to clients, analysts at City broker Peel Hunt noted that Frontier Developments' revenue was 8% ahead of its expectations, with underlying earnings (EBIT) 7% ahead, but pointed out that the growth in revenue highlighted the business’s hit-driven model, and said they “don't expect that every year”.
They added that next global launch akin to Jurassic World will be in 2022, so revenue and EBITDA for the next two years are expected to be lower than full-year 2019.
The analysts said they had made no changes to forecasts for the group, but based on its estimates for a return to two fallow years, they cut their target price for the shares back to 1,300p from 1,400p.
Frontier Development shares were 6% higher at 1,172p by mid-morning on Tuesday.