Double-digit revenue growth for acquisitive listed games development firm
Revenues have grown 35% at Sheffield-headquartered games development firm Sumo Group in its first full set of annual results while trading on AIM.
Sumo Group, one of the UK’s largest independent developers of video games which has acquired two studios since its IPO in December 2017, has this morning reported revenues of £38.7m in the year-ended 31 December 2018; up from £28.6m in the previous year.
Profitbaility was much improved – with a rise from pre-tax losses of £28m in 2017 to pre-tax losses of £500,000 in the recent results.
Carl Cavers, Chief Executive Officer of Sumo Group, said: “With the video games market forecast by Newzoo, a leader in games analytics, to grow around 30% in the next three years, driven by demand for new cloud-based subscription platform content supported by the world’s biggest publishers, we believe that the outlook for Sumo Group is as good as ever. We are successfully attracting major new global publishers, as well as strengthening our relationships with existing and previous clients, and our business development pipeline remains very healthy.
“The challenge for the business is the acquisition of talent to support and deliver on these significant growth opportunities. Our quest to attract talented people to the business, both organically and through acquisition, is delivering results and we will maintain a keen focus on this aspect of the business in 2019. Having acquired Red Kite Games at the beginning of the new financial year, we are continuing to explore further interesting acquisition opportunities.
“We have had a positive start to the new financial year and have an unusually high degree of earnings visibility with slightly over 88% of Sumo Digital’s forecast 2019 development fees being already contracted or near contracted. Current trading is in line with the management’s expectations and I remain confident that the business will continue to deliver in 2019 and beyond.”
Ken Beaty, non-executive chairman, added: “This strong performance is largely driven by our talented and dedicated people, who continue to provide exceptional creativity, service and high level of expertise. It has been particularly pleasing to see many of our people begin to invest in the Company’s new share incentive plans, which were launched in July 2018 to give colleagues the opportunity to participate in the success of our business. Overall, more than 61% of our colleagues are participating in either the Sumo Group plc Long Term Incentive Plan or the Share Incentive Plan.
The listed firm said its highlights during the year included the acquisition of The Chinese Room in August. It also achieved an Apple new client win in December, which means the firm has two own-concept games now under development for Apple Arcade.
Sumo saw a 14% organic growth in headcount and a 21% increase in total headcount, including M&A, to 592 at the end December 2018 (2017: 489). It has also strengthened its Board further with Andrea Dunstan appointed as NED and Chair of Remuneration Committee.
Post year-end highlights included the acquisition of Red Kite Games in January 2019, bringing 27 people into the business.