Frontier Developments Share Discussion Threads

[vworlds_cambridge] 25/7/2018 12:58

Thanks for the link. I think it was a little negative about the next franchise, since we've been told that it's something very well known (similar to Jurassic Park). I guess that's what we all need to know more about now...

[endion] 25/7/2018 12:40

Great write up that forecasts EPS of £1.50. Glad that someone else out there is seeing the potential, I dont feel so crazy now with my £1.09.

[spmc] 25/7/2018 12:13

Good write up over at UK Investor:

hxxps://uk-investor.com/2018/07/25/is-now-the-time-to-buy-frontier-developments-plc-lon-fdev/

We could be looking at £1.50 of earnings if JWE sales are high enough

[bamboo2] 24/7/2018 18:08

Looks like, on this occasion, the potential turn on the last market price based chart, was slightly more accurate than of the mid price based chart.

[endion] 24/7/2018 17:03

This was posted on the "News" section of JWE on steam from Frontier:

Hello everyone!

We hope you’ve been enjoying your time on the Five Deaths, incubating dinosaurs and trying your utmost to avoid any… unfortunate accidents involving your guests. We want to take this opportunity to thank our community for all of the support so far and to talk a little more about our future plans. We also want to inform you all that our next update will be coming for free to all Jurassic World Evolution players.

First of all, thank you to everyone who has been involved in this incredible journey so far; it’s just the beginning. We’ve been truly humbled by the amount of support we’ve received from our incredible community and we are so grateful to have such an amazing, passionate and supportive group of players with us every step of the way.

We understand that some of you are eagerly awaiting more details of what the future of Jurassic World Evolution holds. While we aren’t able to give you all the information at the current time, we want to reassure you that, in true Frontier style, the development team remain hard at work and will be supporting the game with a series of additional content drops (the first of which was the free update that introduced the Jurassic World: Fallen Kingdom dinosaurs).

The dev team have been reviewing feedback and suggestions from all of our official channels. We’ll have more details on which content and features will be making its way into future updates over the coming weeks, so make sure to follow our official channels to stay up-to-date with all the news as it happens.

Whilst we would love to include every piece of content that the community want to see in the game, we have to look at a number of factors before deciding what exactly makes its way into each update. Please do continue to give us your feedback and suggestions, and we’ll aim to address the most common requests through our community responses where possible.

Once again, a huge thank you to everyone who’s helped support us. We have been overwhelmed with the incredible and passionate support from you all and we’re very excited to be bringing in a series of content updates; we can’t wait to share more details with you as we get closer to our next free update.

Thanks!
Bo

[endion] 24/7/2018 14:46

For anyone catching up my estimate was based on JWE sales of 2.8million, plus 30m revenue from back catalogue of games.

[mark4231] 24/7/2018 14:26

I would agree - endion's estimate, which I don't think was too fantastical, was an EPS of £1.09.

[endion] 24/7/2018 14:26

Frontier will generate that EPS of 42.4p if they sold 1.97m units of JWE within the financial year. And on those sales alone, not including back catalogue games sales. Having already sold 1m in 5 weeks I think we can safely say that the £14.05 will be exceeded by a fair amount.

[hastings] 24/7/2018 13:51

That's based on EPS of 42.4p, which given the update last week looks very much as though it will be beaten.

[mark4231] 24/7/2018 13:43

Yes.

Although I don't subscribe to the FT I found and read the article by searching on Google News for Frontier Developments.

[endion] 24/7/2018 13:36

So they are saying that 14.05 is based on a 33 times multiple for 2019 earnings?

[mark4231] 24/7/2018 13:24

A nice mention in the FT -

Jefferies "£14.05 target implies a calendar 2019 price of 33 times earnings"

[endion] 24/7/2018 11:52

Heading back up now! Lets all blow!

[vworlds_cambridge] 24/7/2018 10:32

Hi rivaldo/hpcg. Please can you clarify the comment about Jefferies? Have they started coverage of FDEV? Can't seem to find information about this anywhere.

[endion] 24/7/2018 09:32

Thanks Hastings, all the davids!! Got confused there.

[hpcg] 24/7/2018 08:20

Thanks Kamitora, that is important news. One key element of a small company growth story is that it attracts increasing analyst coverage. It is the virtuous circle where research wings can show their value by spotting early stage winner, and the greater publicity supports the share price, thus backing up the analyst.

[rivaldo] 24/7/2018 08:15

Good start today.

Cheers Kamitora. Looks like a decent opening shot from Jefferies, enabling them to upgrade targets quickly when further JWE sales figures or other news arrives.

[hastings] 24/7/2018 00:40

It wasn't David Braben selling shares on a divorce settlement, it was David Walsh COO.

[endion] 23/7/2018 23:16

Dsct, in answer to some of your questions!

The short position of bennbridge was likely dropped to .29% as this share is now approaching 20 on the RSI, indicating that it is chronically oversold. Their first position was opened at around 17.50, so that's a fair profit for them. They will be keeping the rest open just to hedge their bets. If it rises, then they just buy it out and still make a profit regardless.

The COBRA engine is an often over looked asset of the company. An in house developed game engine, it means they they don't have to pay any third party a license fee to use the engine, as many other devs do. As it was developed in house they can also use it to develop games across multiple formats easily, as that was built into its core functionality. They have stated their intention to lease out the engine to third party devs who wish to use it to develop their own games. This would create an additional revenue steam. It is also the main reason that Frontier do not allow modding of their games, despite fan protests. To allow modding you have to allow access to the the game engine code, with it being a closely guarded, in house project they are reluctant to do this.

The tax relief is obviously something they can use to minimise tax losses, the most they have paid in the past four years was 0.1m, an added bonus I being a self publishing dev with their own in house game engine!

Brabens selling of shares was due to a divorce settlement, not entirely of his choosing I would imagine!

2014 was indeed when they began their transition to self development and when they began development for Elite Dangerous, hence the greater expenditure against a smaller revenue.

[mark4231] 23/7/2018 22:17

dsct, I think everything in your post is accurate - yes, 2014 was around when the company began its journey to self publishing with Elite: Dangerous as the first game so the financials at that point aren't really that relevant. Of course financial year 2017/2018 results will have another downturn but that is properly understood and expected by contributors to this thread. Anyway, welcome and please do continue to pester and question things...

[dsct] 23/7/2018 21:37

Sorry all, me back again ! After reading the last (2017) Annual Report, I've noted the following - sorry if this is already common knowledge, but may be useful to newer readers, and show up my errors.

COBRA - this seems to be their own development platform. Does anyone have any links about this (of a not too technical nature! lol). I remember about 'porting' games from one format (Spectrum, Commodore, Atari etc.) many years ago, which was easier on those with the same CPU (Zilog Z80 etc), but harder otherwise. I presume their COBRA platform does similar, in making it easier/quicker to create the same game(s) for the different consoles.

There is mention of Video Games Tax Relief on P14 of the AR - In reply to @nurdin on post #2985
"Corporation tax charges in the period were minimal overall at £0.1 million (FY16: a credit of £0.2 million) despite the growth in profits. This was due to a combination of brought forward tax losses and Video Games Tax Relief."

It appears you need to be called 'David' to be at the top ! lol:
David Braben - Founder and CEO
David Gammon - Non-Executive Chairman
David Walsh - Chief Operations Officer

I noticed David Braben owned 50.1% of FDEV at 31st May 17, then diluted by Tencent's investment, and further reduced from selling 3m shares in Sept 17 to bring his holding to 37.1% - I'm much more comfortable with this figure than the 50.1%

I've only scanned the financials, as I presume they've been disected here, and nothing untoward found. I did check the employee options, and see that the 3.3m outstanding represent <10% of current shares, so not excessive and director salaries seem reasonable.

I see their was a major downturn in 2014, and assume this was to do with the transformation from Work-for-hire to Self-publication, and as it's a few years ago, not too concerned.

I looked at the merchandising section of their store, and have seen an 'original Elite' T-shirt, that's just right for an old fart like me !

I'll try and get back to lurking here instead of pestering - Thanks again for all the replies.

[dsct] 23/7/2018 18:14

Thanks for your reply @endion (and I believe it's your website I've bookmarked for further reading - Would it be possible to use your website as your post's signature - maybe not all, but those going into more detail i.e. the recent one questioned by @michaeljames1 with regards to figures).

I was unable to finish my DYOR this weekend, so no buy from me (yet).

There's an informative Investor Presentation on FDEV website, which I need to look through again, and may get time to read the AR tonight. BTW, I couldn't find an Investors Diary section on their website.

I have checked the shorting on FDEV, just to make sure it wasn't a huge amount, and see BennBridge reduced their 0.65% to 0.29% last week - they must have some thoughts for reducing by over half, or possibly just profit-takign.

@endion, you mentioned the reduced revenue and margin for 2018, which if reported incorrectly, as you say could spook investors - "FDEV revenue and margins plummet" is a better headline for reporters than "FDEV revenue and margins fall, as expected". Poor reporting (about divi 'reducing') also temporarily hit the share price of another of my investments recently - Can't recall without reading back, which one though ! lol.

I think the VR is a minor aspect at present, until the hardware improves. I wonder how much more work is involved in making a game VR-able.

Which brings me to the share price and another drop today. I'm now toying with the idea of making an initial purchase, then another on 5th Sept., either on a rising SP, or taking advantage of a fallback. Although I'm thinking of a medium term (years) holding, I'd still prefer to get in as cheap as possible ! lol

I showed a youngster the graphics from my ZX Spectrum Elite game, and they were amazed, but not in the same way I was, all those many years ago ! lol

Sorry for the epic post !

Yes @enlion, I'm still in BOO. My largest holding (core purchase at <34p), and I had a 7-week trade (April-June) from 154p to 200p recently, which was a bonus.

[endion] 23/7/2018 17:39

Brilliant news about the short drofdavid, lets hope it has a little effect, however small!

Interesting that the day after they lowered their short, the large after hour buy trades thinned out.