Frontier Developments Share Discussion Threads

[mortal1ty] 07/5/2024 15:04

Sounds like YankHansen.

Where is that fellow that tried to scare me away at £1.40.

[fisternator] 07/5/2024 14:55

SGT Whipser. Thank you for laying out your investment methodology here. I hope your lack of any research or figure crunching; or as you call it- Homework??? pays off for you!

Apparently, we do not need earnings or any other figures for guidance on investing here at FDEV; you see, its past record from £32 to £1 is so wonderful it needs none. Well, that's all the good for Mr Whipser, he couldn't articulate a toffee apple. Foolish me for posting figures, the figures you totally avoided trying to either refute or acknowledge when forming your reply to me?

Although Yes. I do get the general idea of your post. It's basically the antithesis of what I did in mine . You post absolutely nothing about the company, the sales update or the earnings and then accuse the person posting factual figures of needing to do homework?

Hilarious.

[sgtwhisper] 07/5/2024 14:00

Fisternator, I don't understand what's so hard to understand.
Really don't need any EBITDA figures for guidance on investing here. If you've been following then you'll know, if not, do some homework. This is possibly the easiest stock to gauge, don't overcomplicate it.

[aishah] 07/5/2024 13:53

Frontier Developments shares continue their remarkable recovery

ANALYST VIEWS

Shore Capital analyst Katie Cousins, who raised her recommendation to Buy last month, said the latest sales and earnings guidance was above forecasts and the group’s focus on core titles together with cost savings ‘now indicates a much better exit run rate than originally expected’ with break-even EBITDA possible in the coming financial year.

Liberum analyst Caspar Erskine said today's update again illustrates the underlying value of core CMS games in the company's back catalogue.

[mortal1ty] 07/5/2024 13:45

I am "confusing the matter with market consensus".

... you then literally include a quote from BOD where they refer to "current market expectations".

So you tell me to listen to the BOD and not to confuse matters. But then the board is talking about "current market expectations".

You realise -£9m EBITDA wasn't guidance by management? They only said they would meet that if they hit the top of the revenue range, which they haven't.

[fisternator] 07/5/2024 12:40

That's a great answer to a question I never asked.

As per above, I am quoting the actual Bod, using their words and not pampering or confusing the matter with what you say is 'market consensus'.

Further-
The Bod said on 11/23 RNS

"Despite the reduction in revenue guidance, the Board believes that the current market expectation for an Adjusted EBITDA* loss of around GBP9 million in FY24 "

in between this they have received $4 million from Atrari, Tax relief, a fee from Microsoft and carried out cost-cutting.
adjusted EBITDA would count the Microsoft fee and the Atrai money.

Today RNS has a new Adjusted EBITDA* loss of around GBP5 million in FY24, improving £4 million since the last update.

My point is, take out the $4 million Atrai Fee and the Microdoft payment and that is the £4 million saving between the two figures? Where is any organic sales improvement in EBITDA evident?

As already conceded by me, yes the door is open to improvement by the wording, however, as of now I see no figures that show "strong trading" in April et al is improving the EBITDA for FY24

[mortal1ty] 07/5/2024 10:36

Maybe a better way to think of this is management are moving up the bottom end of their guidance range to some resilient trading.

[mortal1ty] 07/5/2024 10:33

The previous guidance was £9m EBITDA loss, if sales were are the upper end of the £80-£95m range. This was given on the day of that nasty profit warning.

Market consensus went straight to the bottom of the range. So c. £80m sales, and a £13m EBITDA loss.

Management today have come out and said they expect to beat consensus, at £85m sales, and a £5m loss (which would be a c. £9m loss excluding atari).

consensus sales: £80m -> £85m+ today.
consensus EBITDA: -£13m -> -£5m today (or -£9m excluding atari).

So this feels more like management telling the market consensus is too low thanks to somewhat better trading.

[fisternator] 07/5/2024 10:05

Where is this so-called improvement in trading?


11/23 "Despite the reduction in revenue guidance, the Board believes that the current market expectation for an Adjusted EBITDA* loss of around GBP9 million in FY24 "

Today  (after ongoing cost-cutting and receiving $4 million upfront from Atari and a $ Fee from Microsoft in between the two dates)

"the Board anticipates an Adjusted EBITDA* loss for FY24 of £5 million or better."


Sure, the door is left open by the use of the words 'or better'. (But) as it stands today, crunching those above figures, where is the improvement?

aimho

[parob] 07/5/2024 09:52

That's very good news. Thanks for sharing.

[mortal1ty] 07/5/2024 09:52

Side note: Liberum are forecasting £86m sales in 2025, and £93m in 2026. This is the real reason he is upgrading. He knows they are way too conservative for a company that was doing £115m in 2022. All it takes is one well executed own-IP game.

[mortal1ty] 07/5/2024 09:49

They also mention that cash at the FY should be £21m, up 39% from their previous forecasts, and indicates only a modest outflow in 2 months to may.

[mortal1ty] 07/5/2024 09:47

Liberum's note this morning upgrading from BUY from HOLD.

Summary: Broadly speaking 1) sales estimates have bottomed, 2) risk of outperformance on new titles, 3) Liberum have calculated opex is now running at £67m from £74m implied from forecasts (so outperformance here).

--- note ----

FDEV’s update again illustrates the underlying value of core CMS games in its back catalogue. Planet Zoo’s porting to console and a strong publisher sale across Steam in April have led to new revenue guidance of “at least £85m” (cons: £83m). Management have also outperformed on cost efficiencies, with Adj EBITDA loss guidance improving to £5m ‘or better’ from the £9m loss “achievable towards the upper end of revenue guidance” previously issued (LibE: £13m loss). This back catalogue strength and improved cash outlook further reduces uncertainty over future cash flows. We lower our WACC estimate in our DCF to 10% and nudge up long-term back catalogue sustain rates. Our TP rises to 360p/share making us Buyers (from HOLD), and we continue to see further upside risk to numbers.

key points:
Back catalogue outperforming Original CMS IP Planet Zoo beating all expectations on porting to console Organisational Review successful Group now well placed to grow.

Is there value:
Yes – DCF points to 360p TP TP could be much higher (~2x) if new CMS launches land well Franchise refresh potential also creates upside risk to numbers

What market misses:
Underlying IP value much higher than market cap Brand strength and dev capability Launch pipeline de-risked by focus on CMS genre

Value drivers:
Back catalogue sustain rate New CMS launches key, with implied cons forecasts conservative Organisational Review success, with 20%/costs removed

[allstar4eva] 07/5/2024 09:31

Today's guidance of 85 is not full. A further update to come in June but they have said revnue of at least 85m. If they are sensible they have left room to beat in the next update.

[parob] 07/5/2024 08:58

Yep but no posts on the lse bb today so still hasn't attracted the herd yet.With the sell on news gang out first thing hopefully we see a continuing price improvement throughout the day.

[mortal1ty] 07/5/2024 08:34

There was a time when this forum was dead. Now look at the activity. Getting on people's radar.

[fisternator] 07/5/2024 08:30

They did a back door fundraiser via the selling of rct3 and now looks like they have lowered guidance; albeit badly hidden in a salad of words RNS pretending everything is rosy.

Target sub 200p

As always, the fist of reason is happy to stand corrected.


RNS 17/01/24 ---guidance (MID) £87.5 million
RNS Today--------guidance ( FULL ) £85 million

[barnes4] 07/5/2024 08:29

Timberrrrtrrr

[scepticalinvestor] 07/5/2024 08:27

Barnes was saying timber when I was buying in below 100pIgnore the fool, utter bellend.

[barnes4] 07/5/2024 08:18

Timberrrrrrr

Don’t blame Barnes for share price capitulation

[molatovkid] 07/5/2024 08:14

I saw you were the last poster
thought to myself 'bound to be negative'....
Wasn't disappointed.

[barnes4] 07/5/2024 08:10

Inch hi pi’s timberrrrrr

[mr euro] 07/5/2024 08:09

What I like about Frontier is we can see a roadmap that should be highly successful and leading us a 4-5x from here.

I wont sell these until the story starts to change.