Video game developer Sumo (SUMO) generated a rise of more than a third in adjusted cash profits last year. For the first time the group broke down revenue generated from Own-IP and Client-IP, which revealed that the former accounted for a third of total revenue last year, compared with just 10 per cent in 2018.
Management noted that there had been some operational disruption caused by coronavirus, with the principal risk lying in possible delays to milestone payments. Yet according to chief financial officer David Wilton, the biggest impact will be on recruitment. “We’ll end the year with slightly less people than we hoped,” he said, adding that it is therefore likely that the group would take on less new work.
The developer grew its headcount by 29 per cent to 766 people in 2019, with a utilisation rate of 97 per cent. That is not to mention the opening of new studios in Leamington Spa and Warrington, giving a total of 10 locations in three countries. Sumo also noted almost three-quarters of fees attached to its core development pipeline for 2020 had been contracted or were near contraction.
The group purchased Red Kite Games in January 2019, extending its capabilities in engineering and code support services.
Peel Hunt expects adjusted pre-tax profits of £11.4m and EPS of 5.7p in 2020, rising to £15.9m and 7.9p the following year.
| SUMO (SUMO) | ||||
| ORD PRICE: | 173p | MARKET VALUE: | £ 263m | |
| TOUCH: | 171-177p | 12-MONTH HIGH: | 205p | LOW: 122p |
| DIVIDEND YIELD: | nil | PE RATIO: | 33 | |
| NET ASSET VALUE: | 36p* | NET CASH: | £12.9m** | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 (pre-IPO) | 21.6 | 2.4 | na | na |
| 2016 (pre-IPO) | 24.1 | -2.1 | 0.9 | na |
| 2017 | 28.6 | -28 | -389 | nil |
| 2018 (restated) | 38.7 | -0.9 | -0.4 | nil |
| 2019 | 49.0 | 7.4 | 5.2 | nil |
| % change | +27 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £24m or 16p a share **Netted against lease liabilities of £6.5m | ||||
