21st Apr 2020 14:30
(Alliance News) - Sumo Group PLC on Tuesday reported improved results for 2019 as it expressed confidence in its business amid the Covid-19 pandemic.
Shares in the video game developer were trading 4.2% lower at 172.50 pence each on Tuesday afternoon in London.
For 2019, Sumo posted pretax profit of GBP7.4 million, swinging from a loss of GBP900,000 in 2018. Revenue was up by 27% at GBP49.0 million from GBP38.7 million reported for 2018. Operating expenses were GBP16.4 million, down from GBP19.5 million.
The company attributed the rise in revenue to "strong" growth of its businesses Sumo Digital and Atomhawk, as well as the acquisition of Red Kite Games in January 2019.
Video game developer Sumo Digital contributed around 94% of the annual revenue with visual design business Atomhawk accounting for 6.4%.
Sumo said its own intellectual property, accounted for GBP16.4 million - or 33% - of the total revenue realised in 2019.
No dividend was proposed for the period.
Looking ahead, the Sheffield-based company said that while it expects the Covid-19 outbreak to present challenges, it remains confident due to its low-risk business model and "robust" liquidity position. Sumo noted that the global demand for its services has remained strong, and it has seen demand increase during the lockdown period.
As at Monday, Sumo had net cash of 14.0 million.
"The video games market is forecast to grow at 9% CAGR over the next three years and early indications show this increasing as Covid-19 "lockdown" measures affect our leisure activities. Whilst there will inevitably be some impact from the pandemic on the group's performance in 2020, the directors remain confident in the group's strategy and its ability to continue delivering strong returns for stakeholders in the longer-term," said Chef Executive Carl Cavers.
By Ife Taiwo; [email protected]
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