Sumo Group plc (LON:SUMO), the provider of turnkey and co-development services to the world’s largest video game publishers, announced today its unaudited half year results for the six months ended 30 June 2018, which show significant progress across the Group.
These half year results are the first since Sumo Group’s IPO in December 2017 to cover a period throughout which the Company was listed. For the purpose of providing comparative information for the six months ended 30 June 2017 and to help users of this information to assess the underlying financial performance of the Group, this announcement contains unaudited information derived from Part Three: Historical Financial Information of the Admission Document dated 15 December 2017. As a consequence of the significant non-cash charges included in the Group’s results which relate to the amortisation of goodwill and to share based payments, the Board believes that it is helpful to include alternative performance measures which exclude these items and present the underlying results of the Group. These measures are reconciled to the income statement in note 15. One of the adjustments is in respect of the financing of one contract following the introduction of IFRS 15. It is worth noting that the analysts who publish research on the Company have done so on a pre IFRS 15 basis. All figures in this announcement are unaudited and comparative figures are for the half year to 30 June 2017 unless stated otherwise.
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H1 2018 |
H1 2017 |
% change (where relevant) |
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Reported results |
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Revenue |
£22.9m |
£14.3m |
60.1% |
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Gross profit |
£8.0m |
£5.3m |
51.3% |
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Gross margin |
34.8% |
36.8% |
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Loss before tax |
(£1.8m) |
(£2.0m) |
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Cash flow from operations |
(£4.4m) |
£2.1m |
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Net cash / (debt) |
£6.5m |
(£54.5m) |
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Underlying results |
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Adjusted revenue excluding pass-through1 |
£19.6m |
£13.2m |
48.0% |
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Adjusted revenue excluding pass-through and royalties |
£19.5m |
£13.0m |
50.1% |
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Adjusted Gross profit |
£8.2m |
£5.3m |
56.3% |
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Adjusted gross margin excluding pass-through1 |
42.1% |
39.8% |
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Adjusted gross margin excluding pass-through and royalties |
41.8% |
38.7% |
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Adjusted EBITDA2 |
£5.0m |
£3.4m |
45.9% |
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Adjusted profit before tax3 |
£4.3m |
£3.0m |
42.9% |
1 The adjustment to revenue is in respect of pass-through revenue on which Sumo does not charge a margin
2Adjusted EBITDA, which is defined as profit before finance costs, tax, depreciation, amortisation, share based payments charge, the impact of IFRS 15 financing recognition and exceptional items, is a non-GAAP metric used by management and is not an IFRS disclosure.
3Adjusted profit before tax excludes exceptional operating expenses, share based payment charges, net finance costs relating to pre-IPO financial structure and amortisation of customer contracts and relationships. The reconciliation to the income statement is set out in note 15.
H1 2018 highlights:
· Strong performance driven fundamentally by organic growth
· Adjusted gross profit margin excluding pass-through and royalties of 41.8%
· Sumo Digital took on the Newcastle studio of CCP Games on 1 January 2018, further strengthening the relationship with CCP Games and bringing a new location to Sumo Digital and 34 talented people
· Maintained strong balance sheet with net cash position of £6.5m (31 December 2017: £12.4m)
Current trading and outlook:
· Acquisition of The Chinese Room in August 2018 accelerates the Group’s own-IP pipeline and provides new intellectual property, creative talent and the opportunity to develop a new studio in the south of England, extending the reach and accelerating the growth of our core business
· Strong business development pipeline and the Board expects to have good visibility of 2019 revenue by the end of 2018
· Andrea Dunstan has today joined the Group, as a non-executive director and chair of the Remuneration Committee, bringing extensive experience of organisational development and HR strategy
· Current trading since the half year end has been in line with the Board’s expectations
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The Board is positive about the outlook for the Group and expects results for the full year to be in line with consensus market forecasts
Carl Cavers, Chief Executive Officer of Sumo Group, said:
“These results cover our first half year period as an AIM quoted company. The business is flourishing under this new, independent capital structure and I am delighted to report an excellent performance in H1, driven by continued strong organic growth in our core services. We are seeing exciting business development opportunities, as the video gaming market continues to grow globally. This, combined with our low risk business model, gives us a great deal of confidence in the ongoing success of the business.
“Our investment in people and locations continues, as demonstrated by our recent acquisition of The Chinese Room in Brighton, an industry hot spot. We have strengthened the Board to support growth. We are a people business and the appointment of Andrea Dunstan, with her people expertise, shows our absolute commitment to ensuring that Sumo Group is in the best possible shape to attract and retain exceptional talent.”
