Share Price Scenarios

Fourth Franchise Update

Now that there is some greater clarity regarding the current and near future outlook for Frontier I thought I would revisit my fundamental analysis.

The Fourth Franchise is going to be revealed towards the end of this year or the beginning of 2019. I emailed the company after the confusion regarding the fourth franchise reveal date and received this reply:

I believe we have been consistent and clear with our communication regarding our multi-franchise strategy and our progress against that strategy.

Regarding your specific questions:

• Our plans for franchise 4 have not changed. It is not, and never has been, a licensed IP and it has not been delayed, nor has it replaced another project. We are on track and excited about this new franchise.

• We have been clear in recent RNS announcements that we will only provide details on our future franchise plans when it makes sense for that particular franchise. Commercially it does not make sense to provide further details on franchise 4 at this point.

I hope that answers your questions. Thanks again for contacting us.

Regards

Alex Bevis

CFO

This should put to rest and rumours that the fourth franchise was changed, or that its reveal date was delayed in anyway.

Share Price Scenarios

I have provided three scenarios, which vary on sales of Jurassic World Evolution. The first scenario provides a full description of deductions from profit, the subsequent two will only show the main figures for the sake of simplicity. I give three results per scenario based on different PE ratios, and provide a current PE ratio based on that profit.

Scenario 1

2 million JWE sales. 1.75m standard (£45), 250k deluxe (£50).

Profit minus VAT, 30% online store charge, 10% license fee. I haven't deducted tax as historically Fdev have been exempt so far.

Total Profit: £47,906,250.

Back catalogue for 2018 is projected to be £34m, down £3m from previous year. So I shall make 2019 £30m. As it happens, company expenditure has historically been circa £30m, so I shall disregard this income in all scenarios.

£47,906,250 / 38,740,000 (shares in issue) = £1.2366

Eps: £1.24

Share price with PER 14: £17.31
With PER 20: £24.7
With PER 35: £43.28

Current PER: 8.57

Scenario 2

JWE sales of 2.5m. 2m standard, 500k deluxe.

Total profit: £60,375,000

EPS: £1.56

Share price with PER 14: £21.81

With PER 20: £32.16
With PER 35: £54.53

Current PER: 6.79

Scenario 3

JWE sales of 3m. 2.4m standard, 600k deluxe.

Total profit: £72,450,000

EPS: £1.87

Share Price with PER 14: £26.17

With PER 20: £37.39
With PER 35: £65.43

Current PER: 5.66

Worth remembering they sold 1million units in 5 weeks, with the deluxe version outselling standard on PS4 and XBOX stores.