Sumo Group plc (LON:SUMO) is the topic of conversation when Zeus Capital’s Technology Analyst Bob Liao caught up with DirectorsTalk for an exclusive interview.
Q1: Overall, how has Sumo Group traded since its last update in April?
A1: The company is trading comfortable in line with market expectations.
The underlying video market, as many people know, continues to be really strong and that has been further helped by lockdown. More recently, the company’s new game launches are getting very very positive feedback and finally, operationally, staff at Sumo are working very effectively and getting almost the same productivity as they are when they were working in the office.
Q2: Have there been any changes to the company’s growth strategy?
A2: Yes, a minor tweak was indicated in the recent statement, the company plans to make more acquisitions now and that’s because organic recruitment has been quite challenging during lockdown as you might expect and it’s expected to remain so for some time.
We are quite supportive of the company’s acquisition strategy, they’ve proven that they’ve got a disciplined set of acquisition criteria, they’ve got a well-tested innovation process and they try to balance it all out by having a balanced structure.
Finally, they do focus on earning accretive acquisitions as well so it gives us confidence in this mild tweak to their strategy.
Q3: Has the AGM statement led you to make any changes to your outlook for Sumo Group?
A3: No, not a lot. We see obviously, as they said before, an acceleration in the acquisition strategy but that we think is marginal, it’s not expected to require any sort of additional investment in corporate development or acquisition integration capacity
So, we’re still going to reiterate our forecast and we can continue as a result, to believe that Sumo’s shares are undervalued, they’re still trading at a sharp discount to a lot of peers in the market.
