9th Apr 2019 09:58
LONDON (Alliance News) - Video games services company Sumo Group PLC on Tuesday reported strong annual growth, while it also has "unusually" high earnings visibility going forward.
For 2018, Sumo's revenue climbed 35% to GBP38.7 million, helping it to significantly narrow its annual pretax loss to GBP500,000 after GBP28.0 million in 2017.
On an adjusted basis, Sumo posted pretax profit of GBP9.0 million, 20% higher than a year prior.
Sumo does not currently pay a dividend so it can reinvest cash into the business, but in future, if it can sustain profitability, a dividend will be paid.
Revenue and adjusted profit growth was "slightly" ahead of market forecasts, Sumo said, driven both organically as well as by acquisitions.
Sumo had started 2019 well, the company said, with trading meeting expectations and its outlook on the whole positive.
"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," said Chief Executive Carl Cavers.
"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."
"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," Cavers continued.
Shares were 2.1% lower on Tuesday morning at a price of 140.07 pence each.
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