Sumo Group higher-than-expected results reflect strong performance

Sumo Group plc (LON:SUMO), the award-winning provider of creative and development services to the video games and entertainment industries, has announced that its revenue and Adjusted EBITDA for the full year ended 31 December 2020 are expected to be ahead of consensus market expectations* with Adjusted EBITDA for the year of at least £16.0m. The higher-than-expected results reflect strong performances from Sumo Digital and our latest acquisition, Pipeworks, and higher than expected royalty income, during the year.

Net cash at 31 December 2020 was ahead of management expectations at £6.8m due to a number of timing effects, which are expected to reverse during 2021. Headcount increased to 1,043 at the year-end, including 139 people at Pipeworks and 40 at Lab42, an increase of 277 on the prior year (31 December 2019: 766).

The Group expects to announce its FY 20 results on Wednesday, 31 March 2021.

* Consensus market expectation for Adjusted EBITDA in FY 20 is currently £14.8m. Adjusted EBITDA is as defined in the Group’s unaudited half year results 2020, announced on 30 September 2020, and is stated after deducting operating lease costs capitalised under IFRS 16.

Carl Cavers, Chief Executive Officer of Sumo Group, said:

“The year has been extraordinary in many respects. Sumo Group performed very strongly in an already fast-growing market that was further boosted by the effects of the pandemic. We are a people business and I’d particularly like to thank all of our people for making our collective response to the pandemic a truly inspirational story which unfortunately isn’t over yet. We’re keen to return to some level of normality in our studios in the various countries as the vaccine roll-out progresses. In the meantime, we continue to work well from home and have the ongoing support from our partners to do so. We are focused on making great games and continue to operate at good levels of efficiency with no significant delays to production schedules.

We announced or launched a relatively large number of Client-IP and Own-IP games in 2020, including Spyder, Little Orpheus, Sackboy A Big Adventure and Hood. We also completed two great acquisitions, Lab42 and Pipeworks. I was delighted to welcome both of these teams to Sumo Group and am pleased to report that both businesses are fitting in very well and have performed ahead of our expectations. Pipeworks and Genvid announced Rival Peak, a massive interactive live event styled game for Facebook livestream in December.

Our royalty performance in FY 20 is also ahead of our expectations. We recognised royalties on eight games, including two Own-IP.

While our teams across our 12 studios in four countries are nearly all working remotely, in accordance with the relevant local regulations, we continue to manage our studio estate. Both our studios in the North East of England and The Chinese Room in Brighton have moved to new larger premises to accommodate our expected growth.

We are also pursuing a number of acquisition opportunities and new studio locations, as well as working hard to recruit more talented people to join our teams globally. 

The Board looks forward to announcing the Final Results in March and providing shareholders with a full update on the Group’s progress. We are proud of our achievements in what has been a challenging year and remain very positive about our prospects for 2021 and beyond.”

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