Sumo Group cuts losses after revenues level up
Sumo Group on Friday reported a reduction in annual losses after revenue jumped on the back of strong contributions from a number of acquisitions.
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The AIM traded company, which is a provider of creative and development services to the video games and entertainment industries, reported a loss before tax of £0.5m for 2018, compared with a loss of £28.0m the year before, as revenue increased by 35% to £38.7m.
Revenues were bolstered by acquisitions completed throughout the year, which included CCP Games' Newcastle Studio and 34 employees, as well as game developer The Chinese Room, while the post year-end period saw the acquisition of Huddersfield-based developer Red Kite Games.
Revenues also enjoyed a full-year contribution from visual development outfit Atomhawk, which it acquired in 2017 with the business contributing revenue of £2.7m compared to £1.3m in its post-acquisition period the year before.
Development fees for the year increased by 42% to £37.5m as notable videogame releases throughout 2018 and the following months that enjoyed Sumo's input included SEGA's Team Sonic Racing, IO Interactive's Hitman 2 and Microsoft's Crackdown 3.
Meanwhile, cash and cash equivalents stood at £3.7m at the end of the year, down from £12.4m at the same point 12 months beforehand.
Sumo secured a number of new contracts in the final weeks of the year, including two with Apple, a new client for Sumo Group, for the development of games for its Apple Arcade subscription service.
Carl Cavers, chief executive of Sumo, said: "We have had a positive start to the new financial year and have an unusually high degree of earnings visibility with around 88% of Sumo Digital’s forecast 2019 development fees being already contracted or near contracted. Current trading is in line with the management’s expectations and I remain confident that the business will continue to deliver in 2019 and beyond."
Sumo Group's shares were up 2.94% at 141.80p at 1116 BST.