Company DescriptionFrontier Developments PLC develops video games for the interactive entertainment sector. It develops games using its Cobra proprietary cross-platform technology along with industry-standard software packages, allowing code and resources developed on PC to be compiled. Its games include RollerCoaster Tycoon 3, LostWinds, Kinectimals, Kinect Disneyland Adventures and Coaster Crazy games. It has only one reportable segment: Self-Published Work. Business operations are based in the UK and its North American subsidiary, Frontier Developments Inc.

How the Company Makes Money

Frontier Developments Financial Statement Overview

Summary

Frontier Developments faces substantial challenges in profitability, with declining revenues and negative net income impacting overall financial health. The balance sheet remains stable with low leverage, but cash flow issues from high capital expenditures raise concerns. A focus on cost management and revenue growth is crucial for future improvement.

Income Statement

Neutral

The company has experienced a negative revenue growth rate of approximately -14.7% from 2023 to 2024, alongside a consistent decline in EBIT and Net Income, leading to negative margins. Despite a reasonable Gross Profit Margin of around 68.7% in 2024, the company struggles with high operating expenses, resulting in negative EBIT and Net Profit Margins, which indicates challenges in cost management and profitability.

Balance Sheet

Neutral

The balance sheet shows a stable equity position with an equity ratio of approximately 65.4% in 2024, although the Return on Equity is negative due to negative net income. The debt-to-equity ratio remains manageable at around 0.28, indicating low leverage. Overall, the balance sheet reflects stability in equity but highlights profitability challenges.

Cash Flow

Neutral

There is a significant decrease in free cash flow from 2023 to 2024, dropping by around 72.3%. The operating cash flow remains positive, with a high operating cash flow to net income ratio, indicating strong cash generation from operations. However, the negative free cash flow growth signifies increased challenges in sustaining capital expenditures.

Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
89.27M	104.58M	114.03M	90.69M	76.09M
	Gross Profit
61.32M	67.34M	73.61M	63.15M	51.56M
	EBIT
-27.01M	-26.58M	1.54M	19.92M	16.62M
	EBITDA
9.88M	14.86M	33.73M	38.08M	31.49M
	Net Income Common Stockholders
-21.47M	-20.91M	9.63M	21.56M	15.89M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
29.52M	28.31M	38.70M	42.42M	45.75M
	Total Assets
117.39M	141.01M	169.58M	161.52M	147.91M
	Total Debt
21.28M	19.28M	20.74M	22.16M	23.54M
	Net Debt
-8.24M	-9.03M	-17.96M	-20.27M	-22.22M
	Total Liabilities
40.56M	45.04M	51.21M	48.37M	51.18M
	Stockholders Equity
76.82M	95.97M	118.37M	113.15M	96.73M
Cash Flow		Free Cash Flow
1.25M	4.49M	2.41M	6.08M	10.71M
	Operating Cash Flow
32.46M	47.88M	41.16M	38.95M	32.41M
	Investing Cash Flow
-28.70M	-52.31M	-38.69M	-32.83M	-21.38M
	Financing Cash Flow
-2.51M	-6.02M	-6.17M	-9.47M	-640.00K

Frontier Developments Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRE	67 Neutral	£651.05M	6.30	11.95%	7.16%	27.08%	-34.38%
Sector *	59 Neutral	$30.54B	0.25	-13.23%	4.04%	2.36%	-49.53%
FDEV	55 Neutral	£71.79M	4.48	-27.95%	―	-6.57%	―

* Communication Services Sector Average

Performance Comparison

GB:FDEV

Frontier Developments

190.00

64.20

51.03%

GB:ITV

ITV plc

69.60

12.65

22.21%

TSVNF

Team17 Group

2.68

-0.24

-8.22%

GB:CRE

Conduit Holdings Ltd

392.00

-100.15

-20.35%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

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