Company of Connect Yorkshire EIR Carl Cavers, Sheffield and Nottingham-based video games developer Sumo Group says it is confident in its strategy to handle the coronavirus, despite not knowing how long the disruption will last.
The company has also published an update on its unaudited results for the 2019 financial year, and current trading in the year ending 31 December 2020.
The update states: “Over the last few weeks and in close co-operation with our clients and with their consent, we have moved to working from home across the Group.
“We expect a manageable level of disruption and loss of efficiency to continue, as we re-calibrate our project management controls and internal management systems.
“Paradoxically, the COVID-19 pandemic is expected to increase global video games software revenues, as people staying at home play more games.
“As such, it is reasonable to expect some improvement in royalty income on games already published and which have increased sales or usage with the current restrictions on movement in many countries.
“A number of major industry trade events have been cancelled or postponed across the globe, most notably GDC and E3, and increasingly severe restrictions are being placed on travel to protect people worldwide.
“We are managing to mitigate the loss of face time through increased use of telephone and video conferencing.
“Prior to COVID-19 being classified as a pandemic and with strong visibility on development fees, we were confidently on track to deliver further double-digit growth in 2020.
“While the Group is liquid and our relatively low risk business model provides a good foundation to withstand the challenges presented by the pandemic, it is too early to quantify the likely financial impact with any degree of certainty.”
Carl Cavers, chief executive officer of Sumo Group, said: “Our people are adapting well to home working and we have a strong and resilient business with £23.6m cash and a relatively low risk business model.
“Demand for great video games content is forecast to grow and may even strengthen as a result of the ‘stay at home’ measures taken to protect our health through the COVID-19 pandemic.
“As such, we are confident in our strategy and ability to continue generating strong returns for our stakeholders in the longer term.”
Revenue for the group increased to £49m during the 2019 financial year (FY18: £38.7m) a rise of 26.6%. Adjusted EBITDA was slightly ahead of expectations at £14.1m (FY18: £10.2m) – up 37.5%.