Sumo Group losses widen on amortisation

Despite rising underlying earnings, video games developer Sumo Group saw annual losses widen after writing down the value of several old contracts in its first set of results since its IPO back in December.

Although Sumo's revenues grew 27% to £30.6m, the AIM-quoted firm saw pre-tax losses balloon by more than 1,233% to £28m; however, taking away the amortisation of £27.6m as a non-cash and non-recurring charge, adjusted pre-tax profit actually expanded 42% to £7.5m.

Adjusted EBITDA grew 38% to £8.4m.

Sumo, which was founded in 2003 and count names such as the BBC, Sega, Sony and Microsoft Entertainment among its client list, acquired Atomhawk Design back in June, an investment that has already performed "well ahead of the board's expectations".

As of 31 December, Sumo had turned around its net cash/debt situation, swinging a £52.2m debt around to a cash balance of £12.4m.

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."

"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," he added.

As of 1200 BST, shares had collected 0.91% to 111.00p.