25th Mar 2020 10:32
(Alliance News) - Sumo Group PLC on Wednesday said it is "too early" to assess the financial damage of the Covid-19 outbreak, but the company said it could see an uptick in royalty income as government enforced lockdowns may lead to a rise in video game playing.
Shares in the company were 15% higher at 157.45 pence each in London on Wednesday morning.
The video game developer added that it has delayed publishing its annual results by at least two weeks, following the advice of the UK Financial Conduct Authority.
For 2019, Sumo expects revenue to rise 27% to GBP49.0 million from GBP38.7 million.
Sumo said: "We have moved to working from home across the group. Whilst there has been some disruption and loss of efficiency, as project teams were migrated away from our ten studios to remote cloud based working from home, early indications are encouraging. 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. The quantum of such improvement is not yet clear."
The 2020 Electronic Entertainment Expo and Game Developers Conference were cancelled due to the pandemic, Sumo noted.
"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," the company added. "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."
By Eric Cunha; [email protected]
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