Video game

Video games developer Sumo needs big second half to meet expectations, 26 Sep 2019 13:36 – Shares magazine


Sheffield based video Games developer Sumo (SUMO:AIM) delivered revenue growth of 6.1% at £20.8m in the first half to 30 June 2019, in-line with management expectations. The shares traded down 3.6% to 159p.

Investors could be forgiven for marking the shares down. To meet analysts’ full year revenue forecasts of £50.8m implies second half growth of 44%.

That said, management seem confident and reckons that nearly all of 2019’s development fees are already secured with three months still to go. It  also said that it has better visibility over 2020 revenues compared to this time last year.

The company is still early in developing its growth credentials and execution will be key to gaining investors confidence.

The company achieved a maiden  profit before tax of £1.4m compared with a loss of £2.1m last year.

Chief executive Carl Cavers said, ‘our market remains buoyant and we are seeing many exciting opportunities.’

The company is currently working on 18 projects, including for two new clients, Apple and Focus Home, both driven by Sumo’s recent acquisitions.

INVESTING FOR GROWTH

Headcount increased by 20% in order to drive the anticipated growth in the second half of the year, rising from and 592 to 711 as of the end of August.

Management has indicated that they have a healthy pipe-line of acquisitions and is on track to see significant revenue growth for the full year.

In a sign of confidence in the prospects for the business the company was able to attract industry veteran Ian Livingstone, as the group’s new chairman.

Livingstone is a pioneer of the global video game industry having co-founded Games Workshop (GAW) in 1975.

READ MORE ABOUT SUMO HERE


Issue Date: 26 Sep 2019    



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