Frontier have delivered record revenues for FY21 that were slightly ahead of our expectations, thanks to a strong performance across all four franchises and despite the challenges that faced the recent Odyssey launch. We now know that the FY22 upcoming licensed IP game will be Jurassic World Evolution 2, a sequel to Frontier’s biggest-selling game to date that will launch later this year. Simultaneously the Board are providing prudent revenue guidance which assumes that the first F1 management t
Companies: Frontier Developments Plc
Last week saw the PC release of Odyssey, the latest major expansion in the Elite Dangerous franchise. Although players suffered server connectivity issues in the first few days, we understand that many of those problems have now been resolved. Despite the challenges, player numbers have been relatively strong – at record levels for Elite Dangerous, as would be expected. Whilst additional concerns around game optimisation may take longer to fix, Frontier are working hard on resolving these throug
We believe that all of Frontier’s games will continue to make strong revenue contributions through H2 of FY21, but the key sales event will be the release of Elite Dangerous: Odyssey expected before the end of May. Our FY21 revenue forecasts look well underpinned, but in this report we look at the upside sensitivity to our numbers as c.0.5m active Elite players embark on a new Odyssey, and the company seeks to attract 3.5m+ of inactive/lapsed players back into the franchise. Simultaneously, ther
Frontier’s H1 results show revenues up 15%; the statement also confirms a stronger H2, together with a great pipeline of game releases out to FY23. No change in forecasts. FDEV remains a core holding in any UK SMID fund and, in our view, will increasingly stand out as larger cap funds look for scalable UK technology winners.
Looking Ahead At The Next Week
Frontier’s H1 trading update highlights revenues up 16% and stronger than expected holiday season sales at the start of H2. The Board flags that extended home working has created additional development challenges; the release of Elite Dangerous: Odyssey will now be split across a PC launch in FY21, with the PlayStation and Xbox releases coming in FY22. This will ensure the best possible gaming experience for a large, loyal and very important community. While we make some mix shift adjustments to
Frontier has had a busy start to December with the pre-release of Elite Dangerous: Odyssey (#5 on Steam), further sales of the Planet Zoo game and the recently launched Aquatic pack (all in the top 20), as well last week’s release of the first Planet Coaster console bundle. This provides a strong line up of games and PDLC ahead of the Christmas season and ensures a strong start to H2’21 sales.
Last week FDEV launched JWE on Switch to positive player reviews, and this week we expect Planet Coaster to be a showcase game as Microsoft and Sony release next generation consoles. The shares have been very strong reflecting a number of factors, but we retain our view that there is a much larger game franchise and earnings story to play out over the next few years. We will review forecasts and our Target Price when the company provides an H1’21 trading update, expected in December or January.
Frontier Developments has a proven track-record of launching very successful games and nurturing them into multi-year franchises, and over the last few months has unveiled a roadmap of new exciting releases stretching out five years. This has driven a major re-rating of the shares, but in our view there is still plenty of upside as the company emerges as one of the global leaders in the fast-growing gaming sector. We leave our forecasts broadly unchanged, but raise our Target Price to £27.65 fro
A strong finish to FY20
Plus500, Frontier Developments, Speedy Hire, Rio Tinto, Ericsson, Segro, Oxford Biomedica, The Restaurant Group, The Gym Group, Costain, Market Highlights
Companies: PLUS FDEV SDY
Frontier has confirmed a strong finish to FY20, with profits ahead of the updates given through May. Game sales have been strong across the portfolio, and last week the company gave an insight into this financial year with the announcement trailer for Elite Dangerous: Odyssey. Frontier has been the best performing UK gaming stock YTD but looking into FY22 and beyond it is clear a highly visible growth profile is building with own IP, third-party IP and a publishing initiative which can all contr
Guidance beaten for FY20; upping our target price
Guidance upgraded and new IP license; Buy
Frontier has raised guidance given the strong revenue backdrop the whole industry has witnessed over the last few weeks. We upgrade our FY20 profit forecast by 20%. The company has also announced an exclusive IP licence with Games Workshop to develop and publish a Warhammer real-time strategy game. This takes Frontier into an exciting new genre, extends revenue visibility into FY23 and highlights the increasing value and potential of their development and publishing platform.
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Strong trading update with upgraded FY21 revenue growth target (+5% vs. +3-5% previously) and strong confidence in the New Generation Products development.
Companies: British American Tobacco p.l.c.
Today's news & views, plus announcements from ICP, BATS, OXIG, PAG, NCC, OTMP, XPD, PPC
Companies: BATS OTMP XPD
AVO’s goal is to deliver an affordable and novel PT system, called LIGHT, based on state-of-the-art technology developed originally at the world-renowned CERN. Over the past two years, important technical milestones have significantly derisked the project. Now, AVO is working on the verification and validation phase, prior to LIGHT being used on the first patients to support CE marking. In its recent technical update, the company highlighted progress made over the past three months towards a ful
Companies: AVO ARBB ARIX BBGI CLIG DNL FLTA ICGT OCI PCA PIN RECI STX SPO SCE TRX VTA
CAP-XX, the leading designer and manufacturer of supercapacitors and energy management systems, has announce an unaudited pre-close trading update for the year to 30 June 2021 which is in line with the expectations from our 10 May 2021 Initiation note.
Revenue for the year ending 30 June 2021 of A$4.1m to A$4.2m is up 15% YoY and in line with our forecast of A$4.1m. Unadjusted EBITDA loss of approximately A$2.1m to A$2.2m also in line with our forecast of A$2.1m. Importantly the company notes i
Companies: CAP-XX Limited
discoverIE’s FY21 results confirmed that measures taken to manage the business through the pandemic minimised the impact on profitability and reduced gearing significantly. Strong order intake in H221 has returned the business to organic growth and the company continues to make higher-margin acquisitions in the Design & Manufacturing (D&M) business. We lift our underlying EPS forecast by 5.3% for FY22.
Companies: discoverIE Group PLC
Tern has announced the proposed IPO and admission to the NASDAQ First North Growth Market in Stockholm of its portfolio company Wyld Networks (Wyld), with a likely market capitalisation of £8m. The announcement demonstrates the success of the Group’s investment strategy, delivering value from the portfolio even with the backdrop of COVID-19. At the current offering price, there is a small uplift to Tern’s book valuation of Wyld. The IPO allows Wyld to remain a core part of Tern’s portfolio whils
Companies: Tern PLC
The UK market showed a continued recovery in the first quarter albeit the indices are still well short of their all-time peaks, unlike many of their international peers. The FTSE 100 has risen by 1,186 points (21.4%) since the end of October and the FTSE 250 by 4,304 points (25.0%). The comparable performance since the start of the year is less spectacular- the FTSE 100 has risen by 253 points (3.9%) and the FTSE 250 has risen by 1,070 points (5.0%). The factors behind the sustained rally are fa
Companies: AMYT ARBB CEG BAG BVC BEG BONH BLVN BRSD CML CWK CRPR EYE ECHO FDM FAR FA/ GPH GSF HUW INSE JDG KAPE KP2 MACF MPAC MNZS NESF NBI OTMP OBD PREM QFI RUA SCS SEN SOS SUR TON TOU TXP TGL TCN UEM VLS WYN
boohoo Group has announced results for the 12 months ended 28 February 2021, reporting a strong finish to the year, with performance ahead of ZC’s forecasts, driven by strong momentum in both the UK and USA in the final months of the year. Profit generation has been robust, despite significant cost headwinds resulting from COVID and the impact of a number of dilutive acquisitions made over the year. The shares have traded sideways in recent months, despite the Group’s continued strong trading pe
Companies: boohoo group Plc
US & German manufacturing PMI hits lowest readings since 2009, UK manufacturing PMI heads below 50, BorgWarner expects material financial impact from customer production halts
Companies: AVON CGS HAYD HEAD HILS JHD RNO SCPA TWD TRI ZTF SOM GHH
CAP-XX is a world leading developer and retailer of supercapacitors, an important electrical energy storage technology, that delivers high power densities not possible with batteries. The company, its technology and strong IP position are well proven with more than 62 million CAP-XX supercapacitors sold to-date by CAP-XX and its four licensees. As well as reaching EBITDA positive on an underlying basis for its H1/FY21, it has recently concluded a transformational deal which has seen it acquire t
Trading momentum has remained very strong since the group last reported in January, with own Ecomm sales +50% y/y, stores trading ahead of FY19’s levels since re-opening and Friends of Joules and Garden Trading both growing strongly. This drives material PBT upgrades of c.35%-60% over our forecast horizon reflecting the higher sales base and the increasing leverage benefits from the group’s well-invested infrastructure and strong drop through as Friends of Joules and Garden Trading scale. We rai
Companies: Joules Group Plc
Ted Baker has agreed an extension to its RCF out to November 2023 and, among other changes, amendments to its adj. EBITDA covenant tests that provide further financial flexibility. This is a positive signal that the group’s existing lenders remain supportive and, combined with its net cash position of £66.7m as at 30 January 2021, it provides significant liquidity and headroom to support further progress on the transformation plan. This good news follows yesterday’s update that the prelims (now
Companies: Ted Baker PLC
SOS has successfully raised £5.43m (net) at 20p to accelerate growth and profitability. The raise is in response to a significant increase in demand from customers via 3rd Party (3P) platforms. Crucially, 3Ps have approached SOS for more stock depth and access to more of its product range, as styles have sold out quickly. Given the high level of ongoing demand, and end market conditions starting to return to normal (incl. going out), the rationale behind the raise is to ensure the group can fund
Companies: Sosandar Plc
In its May update, Argo has announced that it generated £5.51m of revenue (£6.70m in April) at a mining margin of c82%, successfully reorganised its machine orders for 2021 after a manufacturer encountered production delays, and secured 200MW of power for its transformational Texas facility from Wind Energy Transmission of Texas (WETT) and American Electric Power (AEP). We update our forecasts for the above, Argo’s acquisition of its Canadian data centres, and the decrease in Bitcoin’s price fro
Companies: Argo Blockchain Plc
The FY pre-close update from CAP-XX Ltd (CPX.L), the leading designer and manufacturer of prismatic and cylindrical supercapacitors, indicates FY21 revenue at A$4.1m to A$4.2m, comfortably in line with our forecast, and EBITDA loss of A$2.1m to A$2.2m better than expected (ACLe: A$2.4m). Management reports further growth in the sales order book (+127%) from new and former Murata customers and there have been multiple contract announcements year to date. Meanwhile the capacity and yield of superc