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Sumo Group Plc

Sumo Group PLC Final Results

Sumo Group plc (LON:SUMO) today announced its Final Results for the financial year ended 31 December 2017, which show material progress across the Group.

These results are the first since Sumo Group’s IPO in December 2017.  They cover the period in which the Group transitioned from the previous ownership structure when it was majority owned by funds under the management of Perwyn for more than 11 months of that financial year to the new status as a listed company 10 days before the financial year end. Accordingly, the financial information reflects the leveraged structure in place for most of that year and also the restructuring of the Group in preparation for the IPO together with the significant costs incurred in that process.

 

Reported results

2017

Audited

2016

Unaudited

pro-forma1

Movement

Revenue

£30.6m

£24.1m

27%

Gross profit

£13.3m

£9.0m

47%

Gross margin

43.3%

37.4%

5.9pps

Loss before tax5

(£28.0m)

(£2.1m)

Cash flow from operations

£3.3m

£3.3m

Net cash / (debt)

£12.4m

(£52.2m)

 

Underlying results

2016

Unaudited

pro-forma1

Movement

Adjusted revenue excluding pass-through2

£28.6m

£20.5m

40%

Gross profit

£13.3m

£9.0m

47%

Adjusted gross margin excluding pass-through2

46.4%

44.0%

2.4pps

Adjusted EBITDA3

£8.4m

£6.0m

38%

Adjusted profit before tax4

£7.5m

£5.3m

42%

 

¹ Unaudited pro forma financial information is set out in note 17 of the Notes to this Final Results statement.

The adjustment to revenue is in respect of pass-through revenue on which Sumo does not charge a margin

3Adjusted EBITDA, which is defined as profit before finance costs, tax, depreciation, amortisation, and exceptional items, is a non-GAAP metric used by management and is not an IFRS disclosure.

4Adjusted profit before tax excludes exceptional items £2.7m (unaudited pro forma 2016: £0.9m), net finance costs relating to pre-IPO financial structure £5.4m (unaudited pro forma 2016: £3.0m) and amortisation of customer contracts and relationships and software £27.6m (unaudited pro forma 2016: £3.7m).

Includes amortisation of £27.6m (unaudited pro forma 2016: £3.7m), a non-cash and non-recurring charge resulting from a more appropriate approach to the useful economic life of historical intangible assets arising on the September 2016 change of ownership being taken in respect of client contracts from that date post IPO; IPO/transaction costs of £2.7m (unaudited pro forma 2016: transaction and other exceptional items £0.9m); and net finance costs of £5.4m (unaudited pro forma 2016: £3.0m)

Highlights:

·      IPO in December 2017, raising £38.45 million for the Company from a total £78.15m fundraise

·      Strong start to the current year with full year expectations now slightly ahead of consensus market forecasts

·      Acquisition of Atomhawk Design Limited (“Atomhawk”) in June 2017, which delivered H2 results well ahead of the Board’s expectations prior to acquisition

·      Sumo Digital successfully launched its first own-IP game, Snake Pass, winning the accolade of Best Arcade Game at the much coveted TIGA Awards

·      Atomhawk opened new studio in Vancouver, creating access to new clients and markets

·      The Board and management team strengthened for the IPO

·      Sumo Digital took on Newcastle Studio of CCP Games post year end

·      Strong balance sheet with net cash position of £12.4m (2016: net debt of £52.2m)

 

Carl Cavers, Chief Executive Officer of Sumo Group, said: “The new financial year ending 31 December 2018 has started strongly. Whilst it is still early in the year, the Board already expects to deliver full year results slightly ahead of market expectations. We are continuing to see strong demand for the Group’s services and are well placed to take advantage of the considerable opportunities. Those of us who were at GDC (Game Developers Conference) in March 2018 saw at first hand the strength of growth in our chosen markets, with the associated opportunities this brings, and the Group’s business development pipeline reflects this.

“We expect to continue our organic growth and are also keen to accelerate this by acquiring suitable, complementary businesses. My Board colleagues and I are confident about the outlook for the Group in the year ahead.”

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.